Econ final exam

(Table: Furniture Production Schedule) Use Table: Furniture Production Schedule. What is the total value added of all stages of production of furniture in this production schedule?

$1,200

In 2019, consumer spending was $7,000, government purchases of goods and services was $2,500, and investment spending was $1,500. If GDP for 2019 was $10,300, exports were_____ and imports were _____.

$100; $800

Table: Measuring GDP. Use Table: Measuring GDP. Total expenditures on GDP by the household sector are:

$1095 billion.

(Table: Competitive Market for Hats) Use Table: Competitive Market for Hats. A surplus of the good will occur at a price of:

$20.

(Table: Peanut Butter and Jelly Economy) Use Table: Peanut Butter and Jelly Economy. Nominal GDP in 2018 was:

$400.

(Table: Peanut Butter and Jelly Economy) Use Table: Peanut Butter and Jelly Economy. 2018 is the base year. Real GDP in 2019 was:

$450

(Table: The Consumer Price Index (CPI)) The inflation rate between 2011 and 2012 was _____%.

1.4

In your country, there are 24 million people in the labor force. A total of 21.5 million people are employed. What is the unemployment rate in your country?

10.4%

The consumer price index is normalized so that it equals ____ in a selected base year.

100

If the cost of the market basket in the base year is $1,000, and the cost of the market basket in 2013 is $1,080, the consumer price index for 2013 is ____.

108

Consider the table below. Assuming the law of demand holds, the cell labeled "?" could be which of the following quantities?

147

If a country has a working-age population of 200 million, 135 million people with jobs, and 15 million people unemployed and seeking employment, then its labor force is:

150 million.

If the consumer price index increases from 125 to 130 in one year, the rate of inflation is____%.

4

Table: Supply of Matcha Tea) Use Table: Supply of Matcha Tea. When the price of matcha tea is $1.25 per cup, the quantity of matcha tea supplied by Issa will be _____ cups per day.

40

If good A is considered to be an inferior good, when incomes rise:

The demand for good A will decrease and the demand curve will shift to the left.

If two goods are complements, an increase in the price of one good will cause a decrease in the demand for the other.

True

Which statement is TRUE regarding a normal good?

When income increases, the demand for the good increases.

A movement along the demand curve for a good generally results from:

a change in the price of the good.

Suppose that the demand curve for thneeds is downward sloping. If the price of thneeds decreases because of a change in supply, there will be:

a movement along the demand curve for thneeds.

In terms of the GDP composition, which of the following illustrates consumption?

a new car purchased for personal use

The BEST available measure of a country's standard of living is:

real GDP per capita

In an economy whose aggregate real output is growing faster than the total population:

real GDP per capita is rising

The inflation-adjusted measure of aggregate output typically used by economists is called:

real gross domestic product.

If deflation occurs, and your income is fixed, your real income will:

rise

Whenever a good is purchased

the cost of the good is its opportunity cost

An example of investment spending is:

the purchase of a freezer by an ice-cream parlor

A central and fundamental theme in economics is that

there are not enough resources available to satisfy all the ways a society wants to use them.

There are many freshwater lakes in the United States. However, freshwater is scarce because

there is not enough of it to meet all needs

Which example illustrates an intermediate good?

tires General Motors purchased from Goodyear for new electric cars

Comparing the benefits and costs of engaging in an activity

trade-off

For a student who owns his or her own apartment near the university campus and so does not need to live in a dorm, the cost of going to university is:

tuition, the cost of school supplies, and forgone income.

Scarcity occurs in economics because

we often do not have sufficient resources to achieve our objectives.

The opportunity cost of a good is:

what is given up to acquire the good.

For an economist, the cost of a good is

what you gave up to get it

Emma spends $40,000 for one year's tuition at university. The opportunity cost of one year at university for Emma is:

whatever she would have purchased with the $40,000 plus whatever she would have earned had she not attended university.

_____ spending is the LARGEST component of U.S. GDP, at approximately 68% of aggregate spending.

Consumer

If the population of the United States is 260 million, the labor force is 130 million, and 120 million workers are employed, the rate of unemployment is _____%.

7.7

Which statement is CORRECT?

A change in quantity demanded is a movement along the demand curve, and a change in demand is a shift of the demand curve.

For the following scenario in the milk market, identify the type and cause of change. Note that these scenarios are asking about producer behavior—supply and quantity supplied.

A change in the price of milk.

Which statement best illustrates the law of demand?

Consumers buy more iPhones because prices have fallen.

Which of the following is an example of structural unemployment?

Alfred the welder is unemployed because the plant where he once worked now uses robots.

The consumer price index is calculated by the ____.

Bureau of Labor Statistics

Which of the following will cause an increase in the demand for autos?

Gasoline prices drop by 50% when OPEC nations increase production.

When the price of good A rises, people start to drink good B. In this case:

Good B is a substitute good.

Who is considered unemployed?

Josh, a recent college graduate who sent out job applications but has yet to hear back from the businesses

Which of the following is an example of frictional unemployment?

Lucy the restaurant chef is unemployed because she and her wife recently moved to a new city.

According to the law of supply, if the price of a good or service increases:

Quantity supplied will increase.

Which transaction will be included in the official measure of GDP this year?

Sean bought a new truck this year.

In most fast-food chains there is one person to take the order, another to make each item of food, and another to bag the items up. This is referred to as:

Specialization

Phil is currently unemployed because the tire factory where he used to work installed robots, which replaced 500 laborers, including Phil.

Structually unemployed

Economics is the study of how individuals and societies

allocate scarce resources to satisfy virtually unlimited wants and needs.

A transfer payment is a payment:

for which no services are rendered by the government.

Over the past several years, sushi has become increasingly popular among consumers. This means that the _____ sushi has _____.

demand for; increased

There are no costs to some decisions.

false

Roommates Samara and Zendaya are hosting a Christmas party and have to make snacks for their guests and ornaments for themselves. Samara and Zendaya know that to finish both tasks as quickly as possible, each should focus on just one task, but they don't know who should do what. Samara and Zendaya should determine which roommate:

has the comparative advantage in preparing snacks.

Spending on ____ is the largest portion of the consumer price index.

housing

An increase in the price level that is extremely rapid (say, 400% per year) is called:

hyperinflation.

GDP counts the dollar value of only final goods and services because:

if we counted the value of all goods, we would count inputs, such as the value of steel in a new automobile, more than once.

Purchases of foreign-produced goods and services are:

imports

When the gas price goes up, the demand for solar power ______, and the demand for cars ______.

increases, decreases

A laptop computer purchased by an accounting firm is considered:

investment spending.

A market basket _____.

is a hypothetical set of consumer purchases of goods and services

If a country specializes according to its own comparative advantage and then trades with other nations:

it can consume at a higher level

The market for wheat in Alabama is considered to be competitive. This means there are _____ buyers and _____ sellers of corn in Alabama.

many, many

(Table: Matcha Tea and Coho Salmon Production Possibilities II) Use Table: Matcha Tea and Coho Salmon Production Possibilities II. This table shows the maximum amounts of matcha tea and Coho salmon, both measured in pounds, that Colombia and Washington can produce if each produces just one good. Colombia has an comparative advantage in the production of:

matcha tea only.

(Table: Matcha Tea and Coho Salmon Production Possibilities II) Use Table: Matcha Tea and Coho Salmon Production Possibilities II. This table shows the maximum amounts of matcha tea and Coho salmon, both measured in pounds, that Colombia and Washington can produce if each produces just one good. Washington has an absolute advantage in the production of:

neither matcha tea nor Coho salmon.

If real GDP falls when nominal GDP increases, then ____.

nominal GDP increases by less than prices

Don is a builder and in his free time he has built an addition to his own house. This transaction will:

not be included in GDP because it is not produced for the marketplace

A person who is NOT working or looking for work is:

not counted in the unemployment rate.

The unemployment rate is the:

percent of the labor force that is unemployed.