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Microeconomics > Exam 3 > Flashcards

Exam 3 Flashcards

8, 9, 10

1
Q

Pick the panel that would best model the following scenario: Working conditions become less pleasant

A

C

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2
Q

Pick the panel that would best model the following scenario: A significant number of immigrants enter the labor market

A

D

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3
Q

The labor-supply curve depicts the quantity of _________ at alternative _________

A

labor supplied; wage rates

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4
Q

The labor-supply curve relates the quantity of labor supplied to the

A

wage rate

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5
Q

Ceteris paribus, if additional immigrants come to the United States with marketable skills, and they decide to enter the labor market

A

the labor supply curve shifts to the right

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6
Q

An upward-sloping supply curve of labor reflects the

A

increasing opportunity cost of labor

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7
Q

An upward-sloping supply curve of labor illustrates that the

A

supply of labor and the wage rate are inversely related

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8
Q

Ceteris paribus, the willingness and ability to work specific amounts of time at alternative wage rates in a given period of time is

A

labor supply

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9
Q

A firm’s demand for labor is referred to as a derived demand because it is derived from the

A

demand for the product that labor produces

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10
Q

The quantities of labor employers are willing and able to hire at alternative wage rates is the

A

demand for labor

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11
Q

A firm should continue to hire workers until the marginal revenue product is equal to

A

the market wage rate

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12
Q

The decline in unionization can be explained by all of the following except

A

increased worldwide investment barriers

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13
Q

The marginal physical product is the change in

A

total output associated with an additional unit of labor

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14
Q

Which of the following is the correct formula for calculating the marginal revenue product of labor?

A

the change in total revenue divided by the change in the quantity of labor

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15
Q

The opportunity cost of working is the

A

value of leisure time that must be given up

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16
Q

Ceteris paribus, if the cost of daycare increases and some workers need to leave the labor market and stay home with their children

A

the labor-supply curve shifts to the left

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17
Q

Generally, as the number of hours worked increases, the marginal utility of leisure time tends to

A

increase

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18
Q

Which of the following does not affect labor demand?

A

the supply of labor

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19
Q

If consumers want to increase the wages and the number of jobs for strawberry pickers, they should

A

buy more strawberries

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20
Q

Assume a university pays the football coach significantly more than the university’s president. This is justified if the coach

A

brings more revenue to the university than the president

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21
Q

A higher wage rate causes

A

the opportunity cost of leisure to increase

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22
Q

The law of diminishing returns states that, ceteris paribus, the marginal physical product of labor declines as

A

more labor is employed

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23
Q

Other things being equal, higher wage rates will

A

decrease the quantity demanded of labor

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24
Q

If the demand for labor is a derived demand, then the demand for airplane pilots depends on the

A

desire for airline travel

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25
Q

The determinants of the market supply of labor include all of the following except

A

the market wage rate

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26
Q

Which of the following is not an example of market failure?

A

government intervention

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27
Q

The distinction between public goods and private goods is based on

A

the link between payment and consumption

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28
Q

The most desirable combination of output attainable with available resources, technology, and social values is known as the

A

optimal mix of output

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29
Q

The term externalities refers to

A

all costs and benefits of a market activity borne by a third party

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30
Q

Sources of microeconomic failure that may require government intervention include all of the following except

A

the need for private goods

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31
Q

Which of the following is an economic justification for a policy of laissez-faire?

A

the efficiency of the market mechanism

32
Q

When public goods are marketed like private goods

A

too few goods are produced

33
Q

An unregulated natural monopoly can lead to all of the following except

A

low prices for consumers

34
Q

In a market economy, producers will produce the goods and services that

A

consumers demand

35
Q

A public good is

A

the source of the free-rider dilemma

36
Q

In order to reduce pollution, the government can use all of the following except

A

income transfers

37
Q

A market failure is defined by a(n)

A

suboptimal mix of output

38
Q

Noise generated by an airport best illustrates

A

an externality

39
Q

In economics, a public good

A

cannot be denied to consumers who do not pay

40
Q

Externalities are a type of market failure because

A

third parties bear the costs or benefits of a market activity

41
Q

Which of the following is not considered to be a source of market power for a firm?

A

externalities

42
Q

Subsidized vaccines for COVID-19 can be considered a

A

private good provided (subsidized) by the government

43
Q

Which of the following is most likely to have social demand greater than market demand?

A

healthcare services

44
Q

If market prices and sales are used to signal desired output, then the optimal mix of output would be determined by

A

the market mechanism

45
Q

If the economy relies entirely on markets to answer the what question, it tends to

A

overproduce private goods and under produce public goods

46
Q

The communal nature of a highway means that no one individual is motivated to pay for it because even those who do not pay will still benefit from using it. This is an example of

A

the free-rider dilemma

47
Q

Social costs are

A

the full resource costs of an economic activity

48
Q

The News Wire article in the text titled “Secondhand Smoke Kills More Than 600,000 a Year: A Study” addresses the true costs of tobacco use. Secondhand smoke is an example of

A

an externality

49
Q

Externalities are the

A

generate a gap between social costs or benefits and private costs or benefits

50
Q

Which of the following is a market incentive to discourage pollution?

A

emission charges

51
Q

Which of the following is not a basic measure of macroeconomic performance?

A

public goods production rates

52
Q

Which of the following is true during the expansionary phase of the business cycle?

A

Real GDP increases

53
Q

People are unemployed if they are over 16 and not working due to

A

the inability to find a job even though they are looking

54
Q

Joseph is unemployed. He was working at a thrift shop in Indiana but decided to go back to school full time to become an engineer. He would be classified as

A

not in the labor force

55
Q

Alternating periods of growth and contraction in real GDP define

A

the business cycle

56
Q

Deflation occurs when the

A

price decreases for some goods and services outweigh price increases on all other goods and services

57
Q

Inflation is defined as

A

an increase in the average level of prices

58
Q

When the economy is operating at full employment

A

the economy is operating at the lowest rate of unemployment consistent with price stability

59
Q

Which of the following is characteristic of a downturn in the business cycle?

A

higher unemployment rates

60
Q

The study of aggregate economic behavior is referred to as

A

higher unemployment rates

61
Q

The study of aggregate economic behavior is referred to as

A

macroeconomics

62
Q

Real income

A

reflects the purchasing power of money

63
Q

When calculating nominal GDP, the volume of output is measured using

A

the current market value

64
Q

A recession is technically _________ quarters or more of declining output or real GDP

A

2

65
Q

To be officially counted as unemployed, one must be

A

actively seeking employment and currently not working

66
Q

Which of the following is likely if an economy is headed for a recession?

A

an increase in unemployment

67
Q

Real GDP measures changes in

A

output, but not prices

68
Q

Nominal GDP is defined as the

A

value of output in current dollars

69
Q

For a particular economy, the production-possibilities curve shows the

A

maximum potential output

70
Q

Which of the following lists best represents the three basic measures of macroeconomic performance?

A

GDP growth, unemployment, and inflation

71
Q

A decrease in the average level of prices of goods and services is known as

A

deflation

72
Q

GDP is defined as

A

the market value of all final goods and services produced in a country in a year

73
Q

If the number of dollars you receive every year is the same, but prices are rising, then your nominal income

A

stays the same, but your real income falls

74
Q

The alternative combinations of goods and services that can be produced in a given time period with available resources and technology is referred to as

A

the production possibilities

75
Q

Business cycles demonstrate that GDP, over time, follows

A

erratic growth and recessions of varying durations

76
Q

The total value of goods and services produced within a nation’s borders, measured in constant prices refers to

A

real GDP

Microeconomics (4 decks)

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