Macro final

Profits, rents, interest, and royalties are examples of: a. consumption. b. labor income. c. capital income. d. investment.

c. capital income.

A firm's revenue from selling its product minus the cost of inputs purchased from other firms is called: a. profits. b. investment. c. value added. d. production costs

c. value added.

Small differences in annual growth rates of real GDP generate large differences in real GDP over time because of the: A. importance of average labor productivity. B. power of compound interest. C. diminishing returns to capital. D. limits of economic growth.

B. power of compound interest.

An economy produces only 1,000,000 computers valued at $2,000 each. Of these, 200,000 are sold to consumers, 300,000 are sold to businesses, 300,000 are sold to the government, and 100,000 are sold abroad. No computers are imported. The unsold computers at the end of the year are held in inventory by the computer manufacturers. What is the value of GDP? A. $1.0 billion B. $0.9 billion C. $2.0 billion D. $1.8 billion

C. $2.0 billion

Which of the following would be classified as a final good? A. The services provided by lawyers to a computer manufacturer. B. New computer software sold to a computer manufacturer for installation in new computers. C. A new computer sold to a business firm. D. Computer chips sold to a computer manufacturer for installation in new computers.

C. A new computer sold to a business firm.

An economy produces only 500,000 tables valued at $100 each. Of these, 100,000 are sold to consumers, 200,000 are sold to businesses, 100,000 are sold to the government, and 50,000 are sold abroad. No tables are imported. The unsold tables at the end of the year are held in inventory by the table manufacturers. What is the value of GDP? A. $50 million B. $5 million C. $40 million D. $45 million

A. $50 million

Suppose Sally is offered two jobs: one of a public relations person and the other as a vice-president in a bank. The public relations job that Sally chooses pays $83,000, but the bank job Sally gave up pays $75,000 per year with $10,000 in benefits. According to an economist, what is the opportunity cost of choosing the public relations job? A. $85,000 B. $83,000 C. $10,000 D. $168,000

A. 85,000

Which of the following would increase the consumption component of U.S. GDP? A. You purchase a vacation at Disney World in Florida. B. A French man purchases a vacation at a Disney theme park in France. C. Disney World purchases tires for the monorail from a firm in Ohio. D. A business purchases Disney World vacations as rewards for the firm's best salespeople.

A. You purchase a vacation at Disney World in Florida.

To say that an individual possesses an absolute advantage in the production of software means that an individual: A. can produce more and/or higher quality software in a given amount of time. B. was the first to create the software. C. has a lower opportunity cost of producing software. D. charges the lowest price for software

A. can produce more and/or higher quality software in a given amount of time.

Marginal thinking is best demonstrated by: A. choosing to spend one more hour studying economics because you think the improvement in your score on the next quiz will be worth the sacrifice of time. B. deciding to never purchase a coat made with animal skins or furs C. acquiring the information relevant to a choice before making that choice D. measuring all of the costs of a meal against all of the benefits when deciding whether to order a second milkshake

A. choosing to spend one more hour studying economics because you think the improvement in your score on the next quiz will be worth the sacrifice of time.

The value added by any firm equals the firm's ______ from selling the product minus _______. A. revenue; the cost of inputs purchased from other firms B. revenue; expenses C. profits; the cost of inputs purchased from other firms D. profits; expenses

A. revenue; the cost of inputs purchased from other firms

Government purchases include all of the following EXCEPT: A. social security benefits paid by the federal government. B. the construction of a new court house built by a county government. C. the salary paid to an elementary school teacher employed by a local public school district. D. the purchase of new military hardware by the U.S. Army.

A. social security benefits paid by the federal government.

If Bountiful Orchard grows $90,000 worth of peaches, sells $30,000 worth of peaches to consumers and uses to rest to make jam that is sold to consumers for $100,000, Bountiful Orchard's contribution to GDP is: A. $90,000. B. $130,000. C. $190,000. D. $40,000.

B. $130,000.

If a pizza maker pays $1 for tomatoes, $1 for cheese, $2 for sausage, and sells the pizza made with these ingredients for $7, then each pizza sold contributes how much to GDP? A. $3 B. $7 C. $11 D. $4

B. $7

Which model or graph, given available resources and existing technology, tells us the different combinations of goods a producer can make? A. Insider-Outsider Model B. Production Possibilities Frontier C. Aggregate Supply D. Aggregate Demand

B. Production Possibilities Frontier

In a market-oriented economy, the amount of a good that is produced is primarily decided by the interaction of: A. all consumers. B. buyers and sellers. C. producers and input suppliers. D. producers and government planning committees.

B. buyers and sellers.

Specialization: A. leads to greater self-sufficiency. B. can lead to an increase in overall production. C. allows workers to develop skills by working on a large number of tasks D. is always the result of an inefficient use of resources

B. can lead to an increase in overall production.

The principle that if the amount of labor and other inputs is held constant, then the greater the amount of capital in use, the less an additional unit of capital adds to production is called the principle of: A. increasing returns to capital. B. diminishing returns to capital. C. decreasing output per unit of capital. D. increasing average capital productivity.

B. diminishing returns to capital

1. Which of the following is an example of frictional unemployment? A. Marsha was laid off from her job with the airline because the recession has reduced the demand for airline travel. She expects to get her job back when the economy picks up. B. Dora lost her job when the textile factory closed. She does not have skills to work in another industry and has been unemployed for over a year. C. Hector looked for a job for five weeks after finishing college. He turned down several jobs that didn't make good use of his skills, but now has a job that requires the expertise he gained in college. D. George is an unskilled worker who mows lawns in the summer, but is unemployed the rest of the year.

C. Hector looked for a job for five weeks after finishing college. He turned down several jobs that didn't make good use of his skills, but now has a job that requires the expertise he gained in college.

Which of the following expenditures would increase the consumption component of U.S. GDP? A. You buy a new house. B. You buy 1,000 shares of stock. C. You buy a pizza. D. You buy a used book about finance.

C. You buy a pizza.

Average labor productivity times the proportion of the population employed equals: A. output per worker. B. real GDP. C. real GDP per person. D. real GDP per worker.

C. real GDP per person.

A long-term mismatch between the skills of some workers and the jobs available is a principal cause of ______ unemployment. A. cyclical B. frictional C. structural D. global

C. structural

Suppose that the total production of an economy consists of 10 oranges and 5 candy bars, each orange sells for $0.20, and each candy bar sells for $1.00. Which expression of the output of this economy is most consistent with the concept of GDP? A. This economy produces 15 food items. B. This economy produces food valued at $1.20. C. This economy produces two-thirds oranges and one-third candy bars. D. This economy produces $7.00 worth of food

D. This economy produces $7.00 worth of food.

Each person who is 16 years or older is considered to be in one of the following categories: A. part-time worker, full-time worker, or unemployed. B. part-time worker, full-time worker, or out of the labor force. C. employed, unemployed, or discouraged worker. D. employed, unemployed, or out of the labor force.

D. employed, unemployed, or out of the labor force.

Firms will hire additional workers as long as the wage: A. equals the marginal product of labor. B. is less than the marginal product of labor. C. is greater than the marginal product of labor. D. is less than the value of the marginal product of labor.

D. is less than the value of the marginal product of labor.

Most real-world choices aren't about getting all of one thing or another, instead, most choices involve _________________, which involves comparing the benefits and costs of choosing a little more or a little less of a good. A. utility B. opportunity cost C. benefit analysis D. marginal analysis

D. marginal analysis

A firm's revenue from selling its product minus the cost of inputs purchased from other firms is called: A. profits. B. investment. C. production costs. D. value added.

D. value added.

The scarcity principle indicates that: A. compared to 100 years ago, individuals have less time today. B. because tradeoffs must be made, resources are therefore scarce. C. no matter how much one has, it is never enough. D. with limited resources, having more of "this" means having less of "that"

D. with limited resources, having more of "this" means having less of "that"

Which of the following expenditures would increase the investment component of U.S. GDP? a. You purchase a new house. b. You purchase a new car. c. You purchase 1,000 shares of stock. d. You pay a commission to your stock broker for selling some stocks you owned.

a. You purchase a new house.

Which of the following is an example of an intermediate good? a. a two year-old car sold to a family b. a new car sold to a family c. a metal-stamping machine used to produce cars sold to an automaker d. all of the above

a. a two year-old car sold to a family

Capital goods are treated as _______ goods and, therefore, _______ GDP. a. final; included in b. final; excluded from c. intermediate; included in d. intermediate; excluded from

a. final; included in

GDP would be a better measure of economic well-being if it included: a. the costs of education. b. the total value of intermediate goods. c. the market value of final goods. d. the value of leisure.

b. the total value of intermediate goods.

The market value of all domestically produced final goods and services is also equal to the total amount spent by ______________ less spending on imported goods and services. a. households and firms b. households, firms, and governments c. households, firms, and the foreign sector d. households, firms, governments, and the foreign sector

d. households, firms, governments, and the foreign sector

Intermediate goods and services are _____ production and _____ counted in GDP. a. the end product of; are b. the end product of; are not c. used up in the process of ; are d. used up in the process of; are not

d. used up in the process of; are not