Macro All Quizzes

The exhibit shows how supply and demand might shift in response to specific events. Suppose the technology for producing handheld calculators improves. Which panel best describes how this will affect the market for handheld calculators?

Supply rises (moves to the right on demand curve)

Better insurance benefits increase the incentive of some individuals to work. This statement is best described as B. an example of the ceteris paribus assumption. C. a normative statement. D. a comparative economics statement. A. a positive statement.

A. a positive statement.

A formal statement of a theory is known as a(n. A. model. D. causal statement. B. positive statement. C. empirical measure.

A. model.

Opportunity cost is B. a cost that cannot be avoided, regardless of what is done in the future. D. the additional cost of buying an additional unit of a product. A. that which we forgo, or give up, when we make a choice or a decision. C. the additional cost of producing an additional unit of output.

A. that which we forgo, or give up, when we make a choice or a decision.

Health insurance should be provided to every citizen in a wealthy nation such as the United States. This statement is best described as A. a positive statement. B. a normative statement. D. an implication of an efficient market. C. a marginal statement.

B. a normative statement.

Scarce resources give rise to the concept of A. efficient markets. B. opportunity costs. D. positive economics. C. laissez-faire.

B. opportunity costs.

If your tuition is $5,000 this semester, your books cost $600, you can only work 20 rather than 40 hours per week during the 15 weeks you are taking classes at a job in which you make $15 per hour, and your room and board is $3,000 this semester (same as if not attending college). then your opportunity cost of attending college this semester is B. $5,900. C. $10,100. D. $11,600. A. $5,600.

C. $10,100.

If the price of chocolate-covered peanuts is 70 cents, the quantity demanded by George is ________ bags per month. EXHIBIT 1 Quantity Demanded (bags per month) Price (per bag) George Barbara Dan 90c 10 0 60 80c 15 10 80 70c 20 20 100 60c 25 30 120 50c 30 40 140 40c 35 50 160 30c 40 60 180 B. 15 A. 10 D. 25 C. 20

C. 20

If Barbara is only able to purchase 20 bags of chocolate-covered peanuts, the maximum price she is willing and able to pay for each bag is ________ cents. EXHIBIT 1 Quantity Demanded (bags per month) Price (per bag) George Barbara Dan 90c 10 0 60 80c 15 10 80 70c 20 20 100 60c 25 30 120 50c 30 40 140 40c 35 50 160 30c 40 60 180 C. 70 A. 90 B. 80 D. 60

C. 70

Without rent controls, the equilibrium rent is _______ and the equilibrium quantity is _______. B. Rent1; Q1 A. Rent2; Q1 C. Rent2; Q2 D. Rent3; Q3

C. Rent2; Q2

Economics is best defined as the study of B. how consumers make purchasing decisions. D. inflation, unemployment, and economic growth. C. choices made by people faced with scarcity. A. financial decision making.

C. choices made by people faced with scarcity.

Positive economics is an approach to economics that A. seeks to understand behavior and the operation of systems while making judgments about their usefulness to society. D. examines the role of government in the economy. C. seeks to understand behavior and the operation of systems without making value judgments. B. analyzes outcomes of economic behavior, evaluates them as good or bad, and may prescribe preferred courses of action

C. seeks to understand behavior and the operation of systems without making value judgments.

A student observed that every time the temperature rises above 90 degrees, he forgets to take out the trash. Based on this observation he concluded that temperatures above 90 degrees result in temporary memory loss. In actuality, the student C. was confusing causality. B. committed the ceteris paribus error. A. committed the fallacy of logic. D. showed good reasoning relating to the relationship between temperatures and memory.

C. was confusing causality.

Inflation and unemployment A. are the focus of normative economics. D. are a focus of macroeconomics. B. are a focus of microeconomics. C. are a focus of positive economics.

D. are a focus of macroeconomics.

The exhibit shows how supply and demand might shift in response to specific events. Suppose the Surgeon General announces that eating chocolate prevents heart disease. Which panel best describes how this will affect the market for chocolate?

Demand rises on the supply curve.