Econ multiple choice
in year 2004, in Candamica, consumption expenditure was $13 billion, interest, rent, and profit were $1.5 billion, gov exp. on goods and services were $3 billion, net exports of goods and services amounted to $2 billion, and investment was $8 billion. Hence total exp was
$26 billion
during 2005, net domestic product at factor cost equals $3,300 billion. Indirect taxes minus subsidies equals $200 billion, depreciation= $800 billion, statistical discrepancy= 0, and net operating= $150 billion. The country's GDP using the income approach=
$4,300 billion
if the CPI is 172.4 in one year and is 176.2 in the next year, then the inflation rate =
(176.2-172.4) / 172.4 x100
the formula for the CPI is 100 x
(cost of CPI market basket at current period prices/ cost of CPI market basket at base period prices)
the unemployment rate =
(number of people unemployed/ labor force) x100
in the reference base period the CPI =
100
if your nominal income is $65,000 and your real income in base year prices is $50,000, what is the CPI
130
Hershey's chocolate factory pays a money wage rate= $22.50 per hour and sells its candy bars for $1.25 each. Hershey Chocolate Factory should hire labor until an additional unit of labor produces BLANK candy bars an hour
18
Scott and Cindy both produce only pizza and tacos. In one hour, Scott can produce 20 pizzas or 40 tacos. In one hour, Cindy can produce 30 pizzas or 40 tacos. Cindy's opportunity cost of producing one taco is
3/4 of a pizza
Hank requires one hour to cut the grass and 3 hours to clean the house. His sister Holly requires one hour to cut the grass and four hours to clean the house. Which of the following statements is true?
Holly has a comparative advantage in cutting the grass
which of the following statements are correct about potential gdp
I, and ii
economic growth depends upon which of the following
I, ii, and iii
the question of "how are goods and services produced?" most likely addresses which of the following issues?
Should Ford use expensive industrial robots or inexpensive Mexican autoworkers to produce SUV's?
a reduction in unemployment compensation will
decrease the amount of frictional unemployment
to maximize profits, firms hire labor as long as
each additional hour hired produces more additional output than the real wage rate
In the stock market, a price of a share of stock might fall one day and rise the next. This fluctuation indicates that
either demand or supply changed from one day to the next
to increase the economic growth, a nation should
encourage education because that increases the quality of labor
which of the following best describes comparative advantage
forgoing the fewest units of one product to produce a unit of another product
The US possesses a large amount of human capital. As a result of this fact, in the US there is a
highly skilled and educated labor force
economists try to isolate the effect of one variable at a time. They do so by
holding all other relevant factors the same
a common political statement in the US is that we must strengthen social security. This statement is an example of
a normative statement
GDP is measured by
adding the market value of total final production
which of the following is an example of a sunk cost?
after you start watching a movie, the $8 you paid for the ticket
which of the following could lead the production possibilities frontier to shift inward
an earthquake that destroys several major factories
by donating $1,000 to the Salv Army, Caroline reduces her taxable income. To caroline, the reduction in her taxable income is
an incentive
to help unscramble cause and effects, economists
answer the "how" question
because the CPI overstates inflation
as time passes, gov outlays are increased by more than necessary to compensate for inflation
choose which statement is most correct
at times, real gdp can exceed potential GDP
the CPI is a measure of the
average prices paid by consumers for a fixed basket of goods and services
real gdp is all final goods and services produced in a year within a country valued at
base year prices
the exp approach to measuring gdp is done by using data on only
consumption exp, investment, gov exp on goods and services, and net exports of goods and services
the largest share of total production in the US is
consumption goods and services
which of the following contributes people's standard of living?
consumption goods and services
the decisions of firms and households are
coordinated by markets
mike has just been laid off following sex months of slow sales at his firm associated with a recession in the economy. mike is
cyclically unemployed
based on the consumer expenditure survey, the largest fraction of an average urban household budget is spent on
housing
scarcity exists because
human wants exceed the resources available to satisfy them
as measured, gdp omits which of the following
illegal sales of goods and services, changes in the amount of leisure time and household production of goods and services
capital (not human capital) is the productive resource that
includes machinery and tools
"During 2005, the higher price of gasoline led to a decrease in demand for gasoline." holding other things constant, this statement is
incorrect, because as the price increases, the quantity demanded increases, not the demand
the idea of "diminishing returns" means that real GDP BLANK as the quantity of labor increases
increases at a slower rate
the CPI overstates inflation because the average consumer buys
less of those goods whose relative price has risen
the benefit someone gets from consuming one more glass of lemonade is known as the
marginal benefit
what typically happens to benefits as the amount of an activity is increased
marginal benefit decreases
the cost of a one-unit increase in an activity is called the
marginal cost
Teenagers drink more soda than other age groups. If the number of teenagers increases, everything else remaining the same,
market demand for soda increases
the production possibilities frontier illustrates the
maximum combinations of goods and services that can be produced
having an absolute advantage
means being able to produce more of each product than the trading partner
which of the following is true
most people live in country's that have average income levels below the world average
investment is defined as the purchase of
new capital goods and additions to inventories
to be considered unemployed, a worker must have had
no employment during the week before the survey and be actively looking for a job
which of the following statements is correct?
nominal and real gdp can change either in the same direction or opposite direction
if you make dinner for yourself
only the market value of the ingredients you purchased this year is added to the GDP
in economics, there are 2 types of statements. One describes what is; the other describes what ought to be. These statements are
positive and normative
a country reports that for the year 2006, real GDP was $3,500 billion and nominal GDP was $4,200 billion. If the country's potential GDP is $3,900 billion, the country is
producing at a level less than its full-employment level of output
allocative efficiency refers to
producing the goods and services most highly valued
potential gdp is the level of
real gdp that the economy could produce at full employment
the change in the purchasing power of an hour of work is measured by the
real wage
payments to the factors of production are
rent, wages, interest, and profit, or loss
the phrase "a change in demand" most directly implies a
shift of the demand curve
if the number of sellers decreases, then the supply curve BLANK and the supply BLANK
shifts leftward, decreases
the largest expenditure category of the federal gov is
social security
to achieve gains from trade, a country
specializes in the producing a good in which it has a lower opportunity cost
the law of demand refers to how
the quantity demanded changes when the price of the good changes
the United Auto Workers bargained for higher wages and more benefits for autoworkers. as a result of the higher wages and increased benefits,
the supply of new automobiles decreases
when cyclical unemployment is zero,
the unemp. rate = the natural unemployment rate
correlation means
the values of two variables move in a predictable and related way
if the price is shown in the equilibrium price,
there is a shortage
which of the following is true
to be classified as employed, you must work at least one hour per week at a paid job or 15 or more hours as unpaid workers in your family business
the fact of increasing opportunity cost when moving on the PPF means that
to increase the production of one product requires larger and larger sacrifices of the other good
suppose the CPI in 1983 is 100 and the CPI this year is 172. These values for the CPI mean that
typically,a good whose price was $100 in 1983 had a price of $172 this year
the length of time an unemployed person searches for a job is likely to increase as
unemployment benefits become more generous
you've chosen to take a trip during SB. If you hadn't gone, you would've worked at a temp. job or studied for exams. the opp cost of your trip is
we can't determine without knowing which alternative, working or studying, you would have preferred
when Ford decides to produce more hybrid cars that run on both gas and electricity, it directly answers the BLANK question
what
the united states produces large amounts of software. Based on this observation, it is possible to state that the US has decided that "software" is part of the answer to which economic question?
what goods and services are produced
positive statements are statements about
what is
the economic choices made by individuals, businesses, and governments and the interactions of those choices answer which three major economic questions?
what? how? for whom?
which of the following is a macroeconomic topic
why did production and jobs expand rapidly in 2004
which of the following is a final good or service?
a new replacement muffler installed by Midas Mufflers
Gross Domestic Product=
Y=C+I+G+NX
the Colorado ski shop sold 60 jackets to a Belgium company's headquarters located in Paris, France. The ski jackets are
a US export
suppose the price of leather used to produce shoes increases. As a result, there is BLANK in the supply of shoes and the supply curve of shoes BLANK
a decrease, shifts leftward
which of the following results in a rightward shift of the supply curve of rutabagas
a fall in the price of fertilizer used to grow rutabagas
making choices on the margin means
comparing all relevant alternatives systematically and incrementally
the gdp deflator measures
the price level
if the demand for used cars decreases after the price of a new car falls, used cars and new cars are
substitute goods
structural unemployment is the result of
technological change or foreign competition
which of the following is NOT a normative economic statement
teenagers are responsible for most driving fatalities
in 1983, Pablo earned $100 per week at his job. in 1994, Pablo earned $130 per week. If the CPI in 1983 was 100 and CPI in 1994 was 142 then
the 1994 wage measured in 1983 dollars is $91.55
suppose that last year the price of strawberries was $2 and the price of milk was $1. This year, the price of milk is $2 and the price of strawberries is $1. which of the following statements is true?
the CPI might increase or decrease depending on the quantities in the CPI market basket
potential gdp is
the amount of real gdp that the economy would produce if it were at full employment
an opportunity cost is
the benefits of the highest-valued alternative forgone
the functional distribution of income measures which of the following
the distribution of earnings by the factors of production
for rock concerts, the admission price is set by the promoter. If scalpers are able to sell their tickets for more than the admission price, then
the equilibrium price to the concert must be more than the set admission price
when measuring GDP,
the expenditure on goods and services by all levels of gov are included
the consumer price index market basket contains
the goods and services purchased by an average urban household
in the circular flow model,
the government buys goods and services from firms
in stores, it is common to find products marked as "on sale" at a lower than usual price. what explains this behavior?
the law of demand is being used to increase the quantity demanded
The opportunity cost of a decision is measured in terms of
the next best thing given up
the labor force consists of
the number of people in the working-age pop. who are employed or unemployed
