Econ 1 questions
shows that in 1970, people 19 and under made up 77.2 million or 37.6% of the population; people between ages 20 and 64 made up 107.7 million or 52.5% of the population; and people 65 or older made up 20.1 million or 9.8% of the population. Image (b) shows that in 2000, people 19 and under made up 78.4 million or 28.5% of the population; people between ages 20 and 64 made up 162.2 million or 58.9% of the population; and people 65 or older made up 34.8 million or 12.6% of the population. Image (c) projects that in 2030, people 19 and under will make up 92.6 million or 26.4% of the population; people between ages 20 and 64 made up 188.2 million or 53.6% of the population; and people 65 or older made up 70.3 million or 20% of the population.) According to this pie chart, which age group population has been continually shrinking since 1970?
19 and under
Given X = 22+10-((5/25)*100), X is ________.
12
If Sam currently studies 3 hours per week and attends class 4 out of 4 possible hours per week and had a GPA of 2.75 last semester. Using the equation Grade = (0.50 x hours spent studying) + (0.25 x class attendance) + (0.25 x prior GPA) figure out, if Sam wishes to get a 4.0, how many additional hours per week does he need to study?
2.5
Suppose that the equation given above applies to you and that you currently study 2 hours per week and attend class on average 3 out of 3 possible hours per week. Your previous semester's GPA is 2.0. If you are intent on getting a 4.0, how many more hours per week do you need to study?
3.5 hours.
Land, or natural resources, include(s) the fertility of the land, minerals below it, and
Climate
The one going down constantly From the graph above, one could conclude that, all else remaining constant
Direct
Economic capital is productive, so it does NOT include
Money
What can be assumed if a model can accurately predict outcomes?
The assumptions of the model are generally accurate.
Which of the following can be classified as a free good in the production process?
calculus
Natural resources, or land, can include the fertility of the land, minerals below it, and what other aspects?
climate
In economics, functions often describe cause and effect. In an economic function, the variable being described on the left-hand side represents a(n) ________?
effect
Sydney is an economist putting together an economic model to predict the outcome from particular causes and effects in the economy. What tool is best for testing out her model?
mathematical functions
The best way to determine the direction and magnitude of the relationship between the price of some good and the demand for it is ________.
mathematically
If Kendrick decides to watch t.v. instead of go to the gym, the ________ is a missed workout.
opportunity cost
slope
the change in the vertical axis divided by the change in the horizontal axis
labor market
the market in which households sell their labor as workers to businesses or other employers
When decisions need to be made, economists assume a decision will be influenced by its
trade-offs.
Bar Graph According to this graph, which age group will experience the greatest decline in population growth between 2000 and 2030?
20-64
Consider the equation x=3. How would this be represented in an XY graph and what does it say about the relationship between X and Y?
A single point (X=3) on the X axis and a vertical line upwards from that point that says X is not dependent upon Y.
How would the equation x=0 and y=5 be represented in a XY graph, and what does it say about the relationship between X and Y?
A single point y=5 on the Y-axis has a horizontal line to the right from that point. This graph indicates that y is not dependent upon x.
When tasks involved with producing a good or service are divided, workers and businesses
Can produce a greater quantity of those goods and services
Functions are often described as cause and effect in economics. In an economics function, if the variable is on the right-hand side and is doing the explaining, it represents a(n) ________?
Cause
Charlie searched for a model and discovered one on which to base his theory. For his model he used the circular flow diagram, applied math functions to predict economic actions, and identified the economic aspects and associations used in the model. All of his actions are in line, but what has Charlie forgotten to do with his model?
Charlie forgot to explain assumptions he used to simplify the model.
A key feature of some economic models is linearity, or whether the variable of interest changes in constant proportion with another associated variable (meaning they exhibit a linear or constant straight line relationship) or whether the change in the variable is not a constant proportion but varies more or less depending on the level of the associated variable (meaning they have a non-linear or curved line relationship). Which of the following is the most effective way for an economist to support such a relationship?
Conduct behavioral experiments and make quantitative observations that indicate the form of the relationship.
In order to calculate an economic equation to understand its economic implications, what must one remember to do?
Follow the correct order of operations.
Suppose two countries A and B possess the exact same amount and quality of land, labor, capital and entrepreneurship. Can we say that each country therefore produces the exact same level of output?
It cannot be determined with the information given.
Graph that goes up and down In this time series graph, the unemployment rate fluctuates from around 4% to 10%. Given this information, if 2017 had an unemployment rate of around 4-5%, was 2017 a year where it was easier or harder to find employment than 1986 and why?
It was more difficult to find work in 1986 because the unemployment rate was close to 6% and thus an economy worse off than the economy of 2017
What are the factors of production?
Land, economic, capital, entrepreneurship
Macroeconomic policies that focus on banking and interest rates or controlling the money supply are called
Monetary policies
If trade between nations is prohibited,
Nations will be unable to specialize in what they are good at and therefore end up consuming less
One important use of algebraic modeling of economic behavior is to determine the direction of the relationship between two economic variables—say the quantity of X that is purchased and the price paid for X. If, as the price of X rises, the quantity of purchases fall, the relationship can be said to be ________.
Negative
if Mikael decides to go out with his friends instead of study for his biology test, what is the opportunity cost?
Preparation for his biology test
What will we never do in a world of scarcity?
Satisfy all basic human wants
According to the order of operations in solving equations, which step should come first?
Simplify inside parentheses and brackets
Which topic below best applies to microeconomics?
The price that a farmer asks for her watermelons
Which assumption below best reflects a basic understanding economists have about the world?
The world has limted prodcuive resources
Economists would say that the decisions we make are influenced by
Trade-offs
circular flow diagram
a diagram indicating that the economy consists of households and firms interacting in a goods-and-services market and a labor market
An equation where X=5 could be represented on a graph where Y is on the vertical axis and X is on the horizontal axis as
a horizontal line from the origin with slope equal to 5.
goods and services market
a market in which firms are sellers of what they produce and households are buyers
Variable
a quantity that can assume a range of values
function
a relationship or expression involving one or more variables
An equation where Y=6 could be represented on a graph where Y is on the vertical axis and X is on the horizontal axis as
a single point (Y=6) and a horizontal line rightwards from that point.
Because of our limited money, time, and effort, we are best off when we allocate things
by constantly assessing the opportunity costs of our choices
fiscal policy
economic policies that involve government spending and taxes
Government expenditures on public schools is classified as ________ policy.
fiscal
Consider again the total cost curve shown above. Its shape indicates that total costs rise as quantity produced rises at an ________ rate.
increasing.
slope of zero
indicates that there is no relationship between two variables; when one variable changes, the other does not change
negative slope
indicates that two variables are negatively related; when one variable increases, the other decreases, and when one variable decreases, the other increases
positive slope
indicates that two variables are positively related; when one variable increases, so does the other, and when one variable decreases, the other also decrease
economic model
is a simplified version of reality that allows us to observe, understand, and make predictions about economic behavior
The distinguishing feature of economic capital (as opposed to financial capital, like money) is that it
is productive.
If an economist is trying to predict the outcome from particular causes and effects, what is the best tool(s) for her to use in order to test out her economic model?
mathematical functions
What is NOT included in economic capital?
money
monetary policy:
policy that involves altering the level of interest rates, the availability of credit in the economy, and the extent of borrowing
If all else remains constant and the values of two variables move in the same direction it indicates a
positive slope relationship.
If Mikael decides to go out with his friends instead of study for his biology test, what is the opportunity cost?
preparation for his biology test
Financial capital, like money, is simply a tool. Once financial capital is converted to economic capital (invested), it produces a resource that is
productive.
Raising public transportation fares ________.
reduces the opportunity cost of driving one's car.
bar graph
shows data as vertical bars; the height of different bars are used to compare quantities
The ability of a model to predict outcomes (accurately) is an indicator that
the assumptions of the model are generally accurate.
In the case of an negative relationship between two variables, all else remaining constant
the value of the two variables will move in opposite directions from each other.
division of labor
the way in which the work required to produce a good or service is divided into tasks performed by different workers
What combination of model characteristics are frequently used in the most effective models?
useful and simple
economies of scale
when the average cost of producing each individual unit declines as total output increases
specialization
when workers or firms focus on particular tasks for which they are well suited within the overall production process
A graph in the xy plane with a single point at 3 on the x (horizontal) axis and a vertical line upwards from that point to infinity would be represented by the equation
x=3
A graph in the xy plane with a single point at 4 on the x (horizontal) axis and a vertical line upwards from that point to infinity would be represented by the equation
x=4
Given that total spending for a certain household will always include a base amount of $1000/month, and that additional spending is equal to half of any income earned, we can predict total household spending with a model y=b+mx, where
y represents total spending.
An economy is composed entirely of two equally sized farms A and B producing both eggs and milk. Farm A is better at producing eggs than Farm B which is better at producing milk. Then in order to maximize output, Farm A should
Abandon the production of milk to fully specialize in the production of eggs and then trade with Farm B for milk
Candice is using the circular flow diagram to identify a particular aspect of her economic theory for her Macroeconomics class. The actions she took was to use the circular flow diagram, apply math functions to predict economic actions, and identified the economic aspects and associations used in the model. What action has Candice forgotten to take with her model?
Candice forgot to explain the assumptions she used to simplify the model
Some highways have commuter or express pass lanes. During rush hour lanes on the highway move slowly or often are stop and go, but the express lanes continue to move at a faster pace. Express pass users pay for a transponder and monthly fees to have express lane access even with no other people in their cars. In this example, the drivers who purchase these express passes are probably
Drivers who value speed and convenice more than hose in the stop and go lanes and are willing to pay additional express pass fees for the option of avoiding traffic jams
Identify which of the following microeconomic topics can have an impact on macroeconomic topics?
How do people decide how much to save for the future, or whether they should borrow to spend beyond their current means?
Economic policy decisions taken by individual states within the U.S. are classified as ________ decisions.
Macroeconomic
Darryl is starting a company helping people put up and take down holiday lights on their homes. He determines that the larger the house, the more likely people are to use his company to put up their lights. If Darryl were to plot the relationship between home size and willingness to pay for holiday light installation services, the line on the graph would show a
Positive slope
Every day, 500 airplanes in San Francisco incur an additional 30 minutes of airport delays when flying into or out of the airport. In Chicago, the delays amount to 15 minutes for 1,200 airplanes. If the price of time is $30/hour in San Francisco and $20/hour in Chicago, which airport incurs the largest opportunity cost?
San Francisco
Use the graph to find the slope of the line. Figure 5
Start from a point on the line, such as (2,1)(2,1) and move vertically until in line with another point on the line, such as (6,3)(6,3). The rise is 2 units. It is positive as you moved up. Next, move horizontally to the point (6,3)(6,3). Count the number of units. The run is 4 units. It is positive as you moved to the right. Then solve using the formula: Slope =riserunSlope =riserun so Slope=2/4=1/2
How would the equation where x=3 and y=4 be represented in a XY graph, and what does it say about the relationship between X and Y?
The beginning point y=4 on the Y axis has a horizontal line straight to the right, X-axis has a vertical line straight up from x=3. With the two points on the graph, there is an intersection point where the x and y will cross each other. 6
According to this graph, which age group will make up most of the population in the United States in 2030?
between 20-64
Due to limits on our time, money, and effort, we are best off when we allocate things
by constantly assessing the opportunity costs of our choices.
Once a model of reality is constructed around certain assumptions, it can be tested to determine its value in
predicting outcomes.
microeconomics
the branch of economics that focuses on actions of particular agents within the economy, like households, workers, and businesses
macroeconomics
the branch of economics that focuses on broad issues such as growth, unemployment, inflation, and trade balance
From the graph above, one could conclude that, all else remaining constant
the relationship between X and Y is direct
If a data line on a graph slopes upward as it goes to the right, it is depicting that
the relationship between the variables on the axes is direct.
The town of Franklin has an economy composed entirely of two equally sized specialized tire manufacturers. Both company X and company Z produce race car tires and airplane tires. Company X is better at producing race car tires than Company Z which is better at producing airplane tires. In order to maximize output, Company X should
Abandon the production of airplane tires to fully specialize in the production of race car tires and then trade with Company Z for airplane tires
A bill was introduced into Congress last year suggesting changes to the income tax code. Congress now passed this new tax reform act in the last session and over the next few years the new laws will begin to impact the nation. This is an example of what type of policy?
Macroeconomic fiscal policy
Take a stab at this question (you'll need to do some multiplication). Every day, 500,000 drivers in Los Angeles incur an additional 30 minutes of traffic delays when commuting by car to their jobs. In Boston, the delays amount to 45 minutes for 200,000 drivers. If the price of time is $15/hour in Los Angeles and $25/hour in Boston, which city incurs the largest opportunity cost?
Neither
When creating a graph for your economics course, which axis is most commonly used to represent price (p)?
Price is most commonly represented on the y-axis.
Suppose that a family decides to spend all of their available money on a fancy vacation instead of purchasing a much needed new automobile. From an economist's perspective, which of the following statements about this decision is likely to be true?
The decision is rational in the sense that it reflects the family's preference for vacations over new automobiles.
Imagine that a high school junior sold her old car at the end of the summer and now has the funds from the sale in her bank. She decides to purchase a much needed new automobile instead of saving that money to pay for her senior trip coming up next year. From an economist's perspective, which of the following statements about this decision is likely to be true?
The decision is rational in the sense that it reflects the junior's preference for a new automobile over a senior trip.
Suppose you have determined that the quantity demanded of eggs depends on their price and the income of consumers. Prior to quantifying these relationships using a mathematical model you want to be sure of their directional relationships. Which statement is likely to be true?
The sale of eggs falls when prices rise but increase when consumer income rises.
Use the information you just read in the text to think about the following scenario. The computer software industry is more likely to achieve economies of scale if it is located
in or close to large cities with large numbers of technology workers.
Congress must vote whether to increase the government budget so as not to shut down the government this year. The vote passed and the budget ceiling has been increased to keep the government running. This is an example of what type of policy?
macroeconomic fiscal policy
A company is trying to accurately predict how many more units of a product will be purchased by their customers if the product is discounted by 15%. What tool will assist the company to most accurately run this assessment?
mathematical equations
A manufacturer is trying to accurately predict how many more units of a product will be purchased by their business customers if a product is discounted by 5%. What tool will assist the manufacturer to most accurately predict the purchase behavior?
mathematical equations
Society gains advantages through trade because of its ability to
specialize resources to the uses where opportunity cost is minimized.
If a data line on a graph slopes down as it goes to the right, it is depicting that
the relationship between the variables on the axes is inverse.
Smith's theory of the division and specialization of labor implies that a worker skilled in engineering will
yield economic output that is sub-optimal if she were employed in something other than engineering-type functions.
