macro exam chapters 1 2 3 7 8
Why is money not considered to be a capital resource in economics?
Money is not considered a capital resource because money is not productive
Change in market price:
Movement along the supply curve
Which of the following statements is true?
Real GDP is nominal GDP divided by the price index.
Suppose a city block was going to be used for a parking lot in both New York City and a small town. The opportunity cost would be
greater in New York City because the alternative uses of the block are more valuable.
The benefits of economic growth, particularly as measured by real GDP per capita, include
higher living standards for the vast majority of people.
Economists include only final goods and services when measuring GDP for a particular year because
if intermediate goods were counted, then multiple counting would occur.
Which of the following characteristics leads to an upward-sloping supply curve?
increase marginal cost increase in resource prices
Nondurable goods
products with less than three years of expected life. Examples are peanut butter, clothes, etc.
in a market system, the allocation of scarce goods involves the consideration of
what must be sacrificed in using a resource for its next-best use.
Positive economic statements describe
"what is."
Normative economic statements describe
"what should be."
the law of demand
A reduction in market price will lead to an increase in quantity demanded.
Change in factor productivity:
A shift in the supply curve
Change in producer expectations:
A shift in the supply curve
Change in resource prices
A shift in the supply curve
Change in taxes:
A shift in the supply curve
Change in technology:
A shift in the supply curve
Change in the price of other goods
A shift in the supply curve
why is entrepreneurial ability distinct from labor even though both are considered as a category of economic resource?
Because entrepreneurial ability is not directly engaged in production
Which of the following best describes the costs of economic growth, particularly those measured by real GDP per capital?
Economic growth has not solved sociological problems such as poverty, homelessness, and discrimination.
Which of the following represents a normative economic statement?
The government ought to lower taxes so people have more money.
What is the efficiency factor?
The level of economic efficiency and full employment needed to reach full production potential.
What is the demand factor?
The level of purchases needed to maintain full employment.
The phrase "invisible hand" means that
The tendency of competition to cause individuals and firms to unintentionally promote the interests of society.
Which of the following represents a positive economic statement?
The unemployment rate is 4.8 percent.
Which of the following characteristics lead to a downward-sloping demand curve?
a decline in the price of a related good increasing marginal cost an increase of purchasing power as market price decline diminishing marginal utility increasing opportunity cost
The GDP price index is
a measure of the price of a specified collection of goods and services compared to the price of a highly similar collection of goods and services in a reference year.
Self-interest helps achieve society's economic goals because
as consumers and producers exercise their freedom to act in their own self-interest, markets will produce the desired goods at the lowest possible cost.
What is produced is ultimately determined by
consumers, because if the goods offered are not what consumers want, consumers will not buy them.
Comparing market values over time has the
disadvantage that prices change over time.
Gross domestic product does not include the value of the stocks and bonds bought and sold because these sales and purchases are not
economic investment and should not be counted as production of final goods and services.
Because economic resources are used to produce goods and services, they are called
factors of production or inputs
There is such a close relationship between changes in a nation's rate of productivity growth and changes in its average real hourly wage because if the average real hourly wage and output per worker is
increasing, then the amount of output available per capita for workers to buy will be growing so more can be purchased.
There is a wide variety of desired goods and services in a market system because
individual wants are diverse.
National income accountants compare the market value of the total outputs in various years rather than actual physical volumes of production because
it is impossible to add two different goods, say, oranges and computers.
When measuring GDP for a particular year, economists exclude the value of the used furniture bought and sold because
it was counted in GDP in some previous year.
Economists classify resources as
labor, land, real capital, and entrepreneurs.
What are the major functions of the entrepreneur?
make routine pricing decision innovate take risk make decisions
Economic resources are the
natural, human, and manufactured inputs used to produce goods and services.
What are the determinants of supply?
prices of other goods resource price numbers of producers
Durable goods
products that have expected lives of three years or more. Examples are refrigerators, new cars, etc.
In order to compare changes in the standard of living over a series of years, we would use
real GDP.
Creative destruction
refers to the process by which the creation of new products and production techniques destroys the market positions of firms committed to producing only existing products or using outdated methods.
Nominal GDP is
the market or money value of all final goods and services produced by the economy in a given year, whereas real GDP is adjusted for inflation.
What are the four supply factors of economic growth?
the quality and quantity of human resources the stock of capital goods the number of trading partners the quality and quantity of natural resources the level of technology
Services
the work done by lawyers, accountants, etc.
