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Production is inefficient if the economy is producing at a point: On the production possibilities frontier Outside of the production possibilities frontier Inside the production
- Production is inefficient if the economy is producing at a point:
- On the production possibilities frontier
- Outside of the production possibilities frontier
- Inside the production possibilities frontier
- None of the above
- Margaret decides to say home and study for her exam rather than going out to a movie with her friends. Her dilemma is an example of:
- The economics perspective
- Marginal analysis
- Opportunity Cost
- Allocative efficiency
- The amount of the good that buyers are willing and able to purchase at a given price is called _______________________
- If a product could be produced at a lower cost, what would be the effect on the equilibrium price and quantity?
- Price would increase and quantity would decrease
- Price would decrease and quantity would decrease
- Price would increase and quantity would increase
- Price would decrease and quantity would increase
- If consumer incomes increase the demand curve would
- Not change
- Move to the right
- Move to the left
- Because of bad weather, there will likely be a shortage of oranges. The result of this will cause orange juice prices to:
- Rise
- Fall
- Remain the same
- Which of the following is most likely to have the most inelastic demand curve?
- Insulin
- M & M's
- Bananas
- Hamburgers
- Which of the following is most likely to have the most elastic demand curve?
- Food
- Fruit
- Water
- Perfume
- Consumers represent what percentage of GDP? _________________
- The three categories of personal consumption are Durable Goods, non-durable goods and ____________________.
- Give an example of a durable good _______________________ and a non-durable good _____________________.
- GDP excludes expenditures for:
- Additions to inventories
- New housing
- Haircuts
- Facebook stock
- The "G" term on the formula for GDP includes the following EXCEPT:
- State government purchases of new computers
- Social security checks
- Local government expenditures for building new roads
- Food stamps
- What would cause an increase in a country's GDP?
- Toyota produces pick-up trucks in Texas
- Ford produces cars in China
- Walmart imports linen products from India
- Investors buy stock in General Electric
- The U.S. current GDP is approximately:
- $50 trillion
- $500 billion
- $21 trillion
- $100 trillion
- Suppose a country's workers can produce 4 cars per hour or 12 laptops per hour. If there is no trade, what is the opportunity cost of producing one car? _____________
- After his car broke down on a hot day, Jack walked to a convenience store and bought a cold bottle of water for $1. He would have gladly paid $3. His consumer surplus is: ___________________
- If an increase in the price of skis leads to a decrease in the demand for ski boots, then skis and ski boots are considered:
- Substitutes
- Complements
- Normal goods
- Inferior goods
- If the price of coffee triples, the demand for tea would:
- Increase
- Decrease
- If it is illegal to have peanut butter without jelly and the price of jelly goes up, the demand for peanut butter will:
- Increase
- Decrease
- If your income goes up, the demand for hamburger meat would go _______ ( up or down ) and the demand for steak would go ________ ( up or down ).
- If the price of a good is below the equilibrium price
- There is a surplus and the price will rise
- There is a surplus and the price will fall
- There is a shortage and the price will rise
- An increase in the demand for a good will tend to cause
- An increase in the equilibrium price and quantity
- A decrease in the equilibrium price and quantity
- An increase in the equilibrium price and decrease in quantity
- A decrease in the equilibrium price and increase in quantity
- If a buyer's willingness to pay for a home entertainment system is $5,000 and she is able to actually buy it for $3,000, would she buy it?
- Yes
- No
- Deflation is always a good thing.
- True
- False
- The reduction of a tax rate
- Could increase tax revenue if the tax had been extremely high
- Will always reduce tax revenue regardless of the prior size of the tax
- Will have no impact on tax revenue
- Causes a market to be less efficient
- If the nominal interest rate is 7% and inflation rate is 3%, then the real interest rate is:
- -4%
- 4%
- 10%
- How much would be added to GDP if you sold your 4-year old car for $4,000 and bought a new car for $25,000?
- nothing
- $6,000
- $21,000
- $25,000
- A rise in energy prices that cause higher prices in manufactured goods is an example of what type of inflation?
- Cost-pull
- Cost-push
- Demand pull
- Demand push
- A negative externality of a factory could be ________________________.
Short Answers ( 5 points each ) Answer ANY 2:
- Tony has a pizza business. He buys a pizza oven for $1,000. He buys $200 of cheese, $100 of tomatoes and $50 of pepperoni and sells 1,000 pies at $10 each - how much is added to GDP? ____________________
- What is the GDP of the following economy?______________________
Personal Consumption: $15,000,000
Gov't Expenditures: 7,000,000
Business Investment: 6,000,000
Exports: 5,000,000
Imports: 3,000,000
- Suppose a total population of 200 million workers, 100 million of whom are in the labor force, 80 million are employed full-time, 16 million are employed part-time and 5 million are "discouraged workers". What is the unemployment rate?
_________________________
- Ross has budgeted $20 a month to buy candy bars, music downloads or some combination of both. If Ross spends all his money on candy bars - he can obtain 40 bars a month. If Ross buys only downloads, he can buy 20 a month.
- What is the price of a candy bar?____________
- What is the price of a music download?__________
- What is the opportunity cost of a candy bar? __________________
- What is the opportunity cost of a download? __________________
- If he buys 20 candy bars, how many downloads can he make? _____________
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