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Principles of Macroeconomics > Exam 1 Prep > Flashcards

Exam 1 Prep Flashcards

1
Q

Production is efficient if the economy is producing at a point:

  • on or inside the production possibilities frontier.
  • on the production possibilities frontier.
  • outside the production possibilities frontier.
  • inside the production possibilities frontier.
A

on the production possibilities frontier.

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2
Q

Table 3-4

Refer to Table 3-4. The opportunity cost of 1 car for Japan is:

  • 3 airplanes.
  • 1/3 airplane.
  • 4 airplanes.
  • 1/4 airplane.
A

1/3 airplane.

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3
Q

Which of the following is not a factor of production?

  • labor
  • money
  • natural resources
  • capital
A

money

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4
Q

Which of the following areas of study typifies macroeconomics as opposed to microeconomics?

  • the effect on the economy of changes in the nation’s unemployment rate
  • how tariffs on shoes affects the shoe industry
  • the economic impact of tornadoes on cities and towns in Oklahoma
  • the effects of rent control on the availability of housing in New York City
A

the effect on the economy of changes in the nation’s unemployment rate

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5
Q

Productivity is defined as the

  • amount of goods and services produced from each unit of labor input.
  • actual amount of effort workers put into an hour of working time.
  • amount of labor that can be saved by replacing workers with machines.
  • number of workers required to produce a given amount of goods and services.
A

amount of goods and services produced from each unit of labor input.

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6
Q

Figure 3-9

Refer to Figure 3-9. The opportunity cost of 1 nail for Uzbekistan is

  • 1/4 bolt
  • 4 bolts
  • 2 bolts
  • 1/2 bolt
A

1/2 bolt

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7
Q

Refer to Figure 3-9.

Uzbekistan has a comparative advantage in the production of

  • neither bolts of nails.
  • both bolts and nails.
  • nails and Azerbaijan has a comparative advantage in the production of bolts.
  • bolts and Azerbaijan has a comparative advantage in the production of nails.
A

bolts and Azerbaijan has a comparative advantage in the production of nails.

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8
Q

If Shawn can produce more donuts in one day than Sue can produce in one day, then

  • Shawn has an absolute advantage in the production of donuts.
  • Sue has an absolute advantage in the production of donuts.
  • Sue has a comparative advantage in the production of donuts.
  • Shawn has a comparative advantage in the production of donuts.
A

Shawn has an absolute advantage in the production of donuts.

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9
Q

Economics is the study of

  • the interaction of business and government.
  • how society manages its scarce resources.
  • production methods.
  • how households decide who performs which tasks.
A

how society manages its scarce resources.

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10
Q

Figure 2-3

Refer to Figure 2-3. This economy has the ability to produce at which point(s)?

  • J, K, M, N
  • M
  • K, M, N
  • K, N
A

K, M, N

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11
Q

Figure 2-10

Refer to Figure 2-10. Which of the following events would explain the rotation of the production possibilities frontier from A to B?

  • The economy’s citizens developed an enhanced taste for books.
  • The economy experienced a technological advance in the production of books.
  • More capital became available in the economy.
  • More labor became available in the economy.
A

The economy experienced a technological advance in the production of books.

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12
Q

If Iowa’s opportunity cost of corn is lower than Oklahoma’s opportunity cost of corn, then

  • Oklahoma has a comparative advantage in the production of corn.
  • Iowa has an absolute advantage in the production of corn.
  • Iowa has a comparative advantage in the production of corn.
  • Iowa should not produce corn.
A

Iowa has a comparative advantage in the production of corn.

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13
Q

The unique point at which the supply and demand curves intersect is called

  • coincidence.
  • equilibrium.
  • cohesion.
  • market harmony.
A

equilibrium.

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14
Q

If the supply of a product decreases, then we would expect

  • equilibrium price and equilibrium quantity both to increase.
  • equilibrium price and equilibrium quantity both to decrease.
  • equilibrium price to increase and equilibrium quantity to decrease.
  • equilibrium price to decrease and equilibrium quantity to increase.
A

equilibrium price to increase and equilibrium quantity to decrease.

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15
Q

Other things equal, when the price of a good falls, the

  • quantity demanded of the good decreases.
  • quantity supplied of the good decreases.
  • supply decreases.
  • demand increases.
A

quantity supplied of the good decreases.

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16
Q

Two goods are substitutes if a decrease in the price of one good

  • reduces the demand for the other good.
  • increases the quantity demanded of the other good.
  • increases the demand for the other good.
  • reduces the quantity demanded of the other good.
A

reduces the demand for the other good.

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17
Q

Which of the following changes would not shift the demand curve for a good or service?

  • a change in the price of the good or service
  • a change in the price of a related good or service
  • a change in expectations about the future price of the good or service
  • a change in income
A

a change in the price of the good or service

18
Q

The law of demand says that

  • an increase price causes demand to decrease.
  • an increase in price causes quantity demanded to decrease.
  • an increase in price causes quantity demanded to increase.
  • an increase in quantity demanded causes price to decrease.
A

an increase in price causes quantity demanded to decrease.

19
Q

The amount of the good buyers are willing and able to purchase is called the

  • demand.
  • supply.
  • quantity supplied.
  • quantity demanded.
A

quantity demanded.

20
Q

Two goods are complements if a decrease in the price of one good

  • decreases the demand for the other good.
  • increases the demand for the other good.
  • increases the quantity demanded of the other good.
  • decreases the quantity demanded of the other good.
A

increases the demand for the other good.

21
Q

Which of the following events could cause an increase in the supply of ceiling fans?

  • There is an increase in the price of the motor that powers ceiling fans.
  • All of the above are correct.
  • The number of sellers of ceiling fans increases.
  • There is an increase in the price of air conditioners, and consumers regard air conditioners and ceiling fans as substitutes.
A

The number of sellers of ceiling fans increases.

22
Q

Figure 4-7

Refer to Figure 4-7. At a price of $15,

  • there would be a shortage of 400 units.
  • there would be a shortage of 200 units.
  • there would be an excess demand of 200 units.
  • there would be a surplus of 400 units.
A

there would be a shortage of 400 units.

23
Q

Suppose the number of buyers in a market increases and a technological advancement occurs also. What would we expect to happen in the market?

  • Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
  • The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous.
  • Both equilibrium price and equilibrium quantity would increase.
  • The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous.
A

Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.

24
Q

Lead is an important input in the production of crystal. If the price of lead decreases, other things equal, we would expect the

  • supply of crystal to decrease.
  • quantity supplied of lead to decrease.
  • supply of crystal to increase.
  • quantity supplied of crystal to increase.
A

supply of crystal to increase.

25
Q

Identify each of the topics as being part of microeconomics or macroeconomics (write macro or micro):

the impact of a change in consumer income on the purchase of luxury automobiles

A

micro

26
Q

Identify each of the topics as being part of microeconomics or macroeconomics (write macro or micro):

the effect of a change in the price of Coke on the purchase of Pepsi

A

micro

27
Q

Identify each of the topics as being part of microeconomics or macroeconomics (write macro or micro):

the impact of a war in the Middle East on the rate of inflation in the United States

A

macro

28
Q

Identify each of the topics as being part of microeconomics or macroeconomics (write macro or micro):

factors influencing the rate of economic growth

A

macro

29
Q

Identify each of the topics as being part of microeconomics or macroeconomics (write macro or micro):

factors influencing the demand for tractors

A

micro

30
Q

Identify each of the topics as being part of microeconomics or macroeconomics (write macro or micro):

the impact of tax policy on national saving

A

macro

31
Q

Identify each of the topics as being part of microeconomics or macroeconomics (write macro or micro):

the effect of pollution taxes on the U.S. copper industry

A

micro

32
Q

Identify each of the topics as being part of microeconomics or macroeconomics (write macro or micro):

the degree of competition in the cable television industry

A

micro

33
Q

Identify each of the topics as being part of microeconomics or macroeconomics (write macro or micro):

the effect of a balanced-budget amendment on economic stability

A

macro

34
Q

Identify each of the topics as being part of microeconomics or macroeconomics (write macro or micro):

the impact of deregulation on the savings and loan industry

A

micro

35
Q

What is the difference between a “change in demand” and a “change in quantity demanded”?

A

A change in demand is shown as a shift of the demand curve. A change in quantity demanded is shown as a movement along a stable demand curve.

36
Q

For each of the following changes, determine whether there will be a movement along the demand curve (a change in quantity demanded) or a shift in the demand curve (a change in demand).

a change in the price of a related good

A

Change in Demand

37
Q

For each of the following changes, determine whether there will be a movement along the demand curve (a change in quantity demanded) or a shift in the demand curve (a change in demand).

a change in tastes

A

Change in Demand

38
Q

For each of the following changes, determine whether there will be a movement along the demand curve (a change in quantity demanded) or a shift in the demand curve (a change in demand).

a change in the number of buyers

A

Change in Demand

39
Q

For each of the following changes, determine whether there will be a movement along the demand curve (a change in quantity demanded) or a shift in the demand curve (a change in demand).

a change in price

A

Change in Quantity Demanded

40
Q

For each of the following changes, determine whether there will be a movement along the demand curve (a change in quantity demanded) or a shift in the demand curve (a change in demand).

a change in expectations

A

Change in Demand

41
Q

For each of the following changes, determine whether there will be a movement along the demand curve (a change in quantity demanded) or a shift in the demand curve (a change in demand).

a change in income

A

Change in Demand

Principles of Macroeconomics (1 decks)

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