ECON TEST 1
George and John, stranded on an island, use clamshells for money. Last year George caught 300 fish and 5 wild boars. John grew 100bunches of bananas. In the two-person economy that George and John set up, fish sell for 3 clamshells each, boars sell for 10 clamshells each, and bananas go for 10 clamshells per bunch. George paid John a total of 30 clamshells for helping him to dig bait for fishing, and he also purchased five of John's mature banana trees for 30 clamshells each. What is the GDP of George's and John's island in terms of clamshells?
1,950 1,950 Correct clamshells.
The fictitious country Alpha has a population of 20 million people, of which 10 million are counted as workers. The value of Alpha's output in the year 2017 was $184 billion. b. The value for Alpha's average labor productivity in 2017 is
b. The value for Alpha's average labor productivity in 2017 is $ 18,400 b. The value for average labor productivity is computed by dividing total output with the number of workers, so Alpha's average labor productivity is 184,000/10 = $18,400
Over the next 50 years the Japanese population is expected to decline, while the fraction of the population that is retired is expected to increase sharply. What are the implications of these population changes for total output and average living standards in Japan, assuming that average labor productivity continues to grow?
increased productivity may keep total output from diminishing due to fewer workers, which might lead to an improvement in average living standards.
Factors affecting average wages in the U.S. economy.
A macroeconomist
Inflation in developing countries
A macroeconomist
The effects of tax cuts on consumer spending.
A macroeconomist
. The effect of government subsidies on sugar prices.
A microeconomist
The worldwide operations of General Motors
A microeconomist
In 2017, the fictitious country, "Alpha" had an unemployment rate of 12.9% and an inflation rate of 6.1%. Which of the following statements correctly describes how the economic situation of Alpha compare with the economic situation in the United States in 2017:
Both the inflation rate and the unemployment rate were lower in the United States in 2017.
What are the implications of these population changes for total output and average living standards in Japan, assuming that average labor productivity stagnates?
Fewer workers and constant labor productivity must diminish total output, but average living standards could still increase or stay constant if there is a smaller population sharing that ouput.
Congress should not reduce capital gains taxes without also providing tax breaks for lower-income people.
Normative statement
Deregulation of the airline industry has failed.
Normative statement
Government policies to control inflation has no place in a free market economy such as ours.
Normative statement
Limitations on the number of terms a President may serve are a good idea
Normative statement
The Federal Reserve should raise interest rates to keep inflation at an acceptably low level
Normative statement
A reduction in the capital gains tax (the tax on profits made in the stock market) would lead to a 10 to 20 percent increase in stock prices.
Positive statement
If the Federal Reserve raises interest rates, demand for housing is likely to fall.
Positive statement
Stock prices are likely to fall over the next year as the economy slows
Positive statement
a. Personal income fell in November to a seasonally adjusted rate of $1,879 trillion
Positive statement
Which of the following statements correctly describes how the economic situation of Alpha in 2017 compare with the economic situation in the United States over the past 50 years
The U.S. unemployment rate has consistently been lower than 12.9%, but the U.S. inflation rate has been both higher and lower than 6.1%
The fictitious country Alpha has a population of 20 million people, of which 10 million are counted as workers. The value of Alpha's output in the year 2017 was $184 billion a. The value for Alpha's output per capita in 2017 is
The value for Alpha's output per capita in 2017 is $ 9,200 a. The value for output per capita is obtained by dividing total output with the total population. Note that $184 billion is the same as $184,000 million, so Alpha's output per capita is 184,000/20 = $9,200.
The fictitious country Alpha has a population of 20 million people, of which 12 million are counted as workers. The value of Alpha's output in the year 2017 was $180 billion. a. The value for Alpha's output per capita in 2017 is
a. The value for Alpha's output per capita in 2017 is $ 9,000 a. The value for output per capita is obtained by dividing total output with the total population. Note that $180 billion is the same as $180,000 million, so Alpha's output per capita is 180,000/20 = $9,000.
The fictitious country Alpha has a population of 20 million people, of which 12 million are counted as workers. The value of Alpha's output in the year 2017 was $180 billion. b. The value for Alpha's average labor productivity in 2017 is
b. The value for Alpha's average labor productivity in 2017 is $ 15,000 b. The value for average labor productivity is computed by dividing total output with the number of workers, so Alpha's average labor productivity is 180,000/12 = $15,000.