Macroeconomics

a hypothesis in an economic model is

a statement that may be either correct or incorrect about an economic variable, tested before it can be accepted (or not rejected), usually about a causal relationship

____ occurs when production is in accordance with consumer preferences

allocative efficiency

a market is a group of ______ of a good or service and the institution or arrangement by which they come together to trade

buyers and sellers

societies organize their economies in two main ways to answer the three questions of what, how, and who. a society can have _____ economy in which the government decides how economic resources will be allocated. or society can have a _____ economy in which the decisions of households and firms interacting in markets allocate economic resources.

centrally planned, market

____ decides what goods and services will be produced

consumers, firms, and government

suppose, in an effort to prevent the population from declining, Italy begins offering new mothers extended periods of paid family leave from work and, consequently, the birthrate per woman increases. If so, then this could best be characterized as an example of people responding to

economic incentives

_____ is the study of the choices people make to attain their goals, given their scarce resources

economics

microeconomics is most likely to include the study of

firm interaction

microeconomics is they study of

how households and firms make choices, how they interact in markets, and ho the government attempts to influence their choices

in the united states, who receives the goods and services produced depends largely on ____

how income is distributed

Terbia is a closed​ economy, which has been growing at a very slow pace over the last decade. In order to boost economic​ growth, the government removed trade barriers earlier this year and increased its spending on the economy. These moves were expected to generate employment and increase economic growth.​ However, unemployment did not decline as much as expected. Which of the​ following, if​ true, can explain this​ outcome?

imported varieties of many goods were cheaper than the domestically produced varieties

harry fletcher is a market analyst at an automobile firm. he formed a hypothesis that an increase in advertising would increase demand for the firms cars. the ad campaign ran for a period of six moths. however, the results were not as positive as harry had anticipated. which of the following, if true, can explain this outcome?

interest rates increases substantially during this period

which of the following covers the study of topics such as inflation or unemployment

macroeconomics

which of the following is not a step economists follow when developing an economic model?

make value judgments to be proven or disproven

economists use the word marginal to mean an extra or additional benefit or cost of a decision. an optimal decision occurs when

marginal benefit equals marginal cost

a ____ economy is an economy in which most economic decisions result from the interaction of buyers and sellers in markets but in which the government plays a significant role in the allocation of resources

mixed

when economists develop models designed to explain the choices people make, they generally assume that

people are rational

economics is about _____ , which measures the costs and benefits of different courses of action

positive analysis

____ is concerned with what is, and ____ is concerned with what ought to be

positive analysis, normative analysis

____ occurs when a good or service is produced at the lowest possible cost

productive efficiency

japan has a market economy. as such, japans economy (relatively to centrally planned economies)tends to result in

productive efficiency and allocative efficiency but not necessarily equity.

equity is

the fair distribution of economic benefits

opportunity cost is

the highest valued alternative that must be given up to engage in an acivity

macroeconomics

the study of the economy as a whole, including topics such as inflation, unemployment and economic growth

every society faces trade-offs because we live in a world of scarcity. suppose a student athlete has the opportunity to earn $400,000 next year playing for a minor league baseball team, $900,000 next year playing for a europeans professional football team, or $0 returning to colege for another year. the opportunity cost of the student-athlete returning to college next year is ___

$900,000

jonathan baker is a market analyst. he works at a firm is one of the few produces of good X. jonathan formulates a hypothesis that an increase in advertising will increase the demand for this firms products by attracting new customers. which of the following, if true, would suggest that jonathans hypothesis will hold?

even brand-loyal consumers can be convinced to change their preferences

economics is a social science because

it is based on studying the actions of individuals, it applies the scientific method to the study of the interactions among individuals, it considers human behavior--- particularly decision-making behavior

examining why economies experience increasing unemployment is most likely an issue in

macroeconomics

firms choose how to produce the goods and services they sell. in many cases, firms face a trade-off between using more workers or using more machines. for example

many times in the past several decades, firms may have chosen between a production method in the united states that uses fewer workers and more machines and a production method in china that uses more workers and fewer machines

any model is based on making assumptions because

models have to be simplified to be useful, we cannot analyze an economic issue unless we reduce its complexity

The economy of East Paragon has been experiencing deflation for the last few​ months, with prices of goods and services declining. Because firms are charging lower​ prices, they expected higher sales.​ However, consumption spending did not increase​ much, resulting in substantial losses for these firms. Which of the​ following, if​ true, explains why consumers did not increase consumption in spite of falling​ prices?

most people were expecting prices to decline further

suppose an analyst evaluated whether it is a good idea to pass free trade laws. this is an example of ___

normative analysis

trade offs force society to answer questions such as what goods and services will be produces, how will the goods and services be produced, and who will receive the goods and services produced. which of the following countries has an economy where the government makes these decisions?

north korea

trade-offs force society to make choices, particularly when answering the following three fundamental questions:

one, what goods and services will be produced? two, how will the goods and services be produced? three, who will receive the goods and services produced?

one of the basic facts of life is that people must make choices as they try to attain their goals. this unavoidable fact comes from a reality an economist calls

scarcity

A large corporation that runs nursing homes estimates that changes to Medicare will result in lower payments by Medicare to nursing homes for​ short-term stays by patients that require therapy or care upon leaving hospitals. Assume the corporation is considering expanding the number of​ "beds" it offers at its nursing homes. Given the changes to​ Medicare, if the marginal benefit of offering an additional bed is ​$8000 and the marginal cost is ​$5000 per​ bed, then the corporation __________ offer additional beds.

should

xylo inc., a manufacturer of domestic appliances, lowered the prices of its products, expecting an increase in demand and sales by at least 20 percent. however, it was observed that sales increased by only 8 percent. which of the following, if true, can explain this outcome?

the government increased personal income tax rates earlier this year.