FINAL STUDYGUIDE PART 1 - Assignment Essays

question

The scarcity principle states that

answer

with limited resources, having more of one thing means having less of another

question

Chris has a one-hour break between classes every Wednesday. Chris can either stay at the library and study or go to the gym and work out. The decision Chris must make is:

answer

an economic problem because Chris has only one hour, and engaging in one activity means giving up the other.

question

According to the Cost-Benefit Principle, you should go see the latest Star Wars movie with your friends this week-end if:

answer

the extra benefits of seeing the movie are greater than the extra costs of seeing the movie.

question

Alex received a four-year scholarship to State U. that covered tuition and fees, room and board, and books and supplies. If Alex becomes a full-time student, then:

answer

the opportunity cost of attending State U. includes the money Alex could have earned working for four years.

question

If you have a comparative advantage in a particular task, then:

answer

you give up less to accomplish that task than do others.

question

Regarding specialization, it is generally true that:

answer

specialization imposes costs as well as benefits.

question

If country A can produce more of practically everything than can country B, then which of the following statements is true?

answer

Trade can benefit both countries.

question

When a U.S. firm engages in outsourcing, it benefits ______ and harms ______.

answer

the U.S. consumers of the firm's products; the firm's U.S. employees

question

The entire group of buyers and sellers of a particular good or service makes up:

answer

A market

question

Which of the following is NOT true of a demand curve?

answer

It shows how an increase in price leads to an increase in quantity demanded of a good.

question

As coffee becomes more expensive, Joe starts drinking tea, and therefore quantity demanded for coffee decreases. This is called:

answer

the substitution effect.

question

Gertie saw a pair of jeans that she was willing to buy for $35. The price tag, though, said they were $29.99. Therefore:

answer

Gertie should buy the jeans because the price is less than her reservation price.

question

A decrease in the price of pizza will cause a(n):

answer

increase in quantity demanded.

question

Assume consumers eat either rice or pasta for dinner every night. If the price of rice increases, in the pasta market one would expect to see:

answer

an increase in the demand for pasta.

question

The market value of final goods and services produced within a country during a period of time is called:

answer

gross domestic product.

question

Which of the following is not classified as a final good?

answer

Fresh vegetables purchased by a restaurant

question

Capital goods are

answer

long-lived goods used for producing other goods and services.

question

The four components of aggregate expenditures are:

answer

consumption, investment, government spending, and net exports.

question

Which of the following would increase the consumption component of U.S. GDP?

answer

A restaurant in Denver purchases a bottle of California wine to include on its wine list.

question

Which of the following expenditures would increase the investment component of U.S. GDP?

answer

You purchase 1,000 shares of stock.

question

Government purchases include all of the following except:

answer

social security benefits paid by the federal government.

question

Which of the following would increase the government purchases component of U.S. GDP?

answer

The U.S. federal government pays $3 billion in salaries to soldiers in the military.

question

Three equivalent ways to measure GDP are total _____, total _____, and total ______.

answer

production; income; expenditure

question

Labor income includes:

answer

wages, salaries, and earnings of the self-employed.

question

To compare the change in physical production (GDP) between 2010 and 2016, we should compare ______ GDP in 2010 with ______ GDP in 2016.

answer

real;real

question

Real GDP is measured in ______ prices; nominal GDP is measured in ______ prices.

answer

base-year; current

question

Real GDP measures the ______ of production.

answer

physical volume

question

GDP excludes important factors that affect people's well-being, such as the value of:

answer

leisure time.

question

One shortcoming of real GDP as an indicator of society's social well-being is that it fails to take into account the:

answer

non-market production.

question

The measure of the cost of a standard basket of goods and services in any period relative to the cost of the same basket of goods and services in the base year is called the:

answer

consumer price index.

question

Which of the following is a nominal quantity?

answer

The current price of a barrel of oil

question

The price of a gallon of gasoline at the pump increased by 10 percent at the same time that the inflation rate was 15 percent. The nominal price of gasoline _____, and the real price of gasoline _____.

answer

increased; decreased

question

If workers received a 5 percent wage increase and the rate of inflation was 3 percent, then their real wage:

answer

increased.

question

If workers and employers agree to a three-year wage contract under the expectation of 3% inflation, and inflation turns out to be 5%, then:

answer

workers lose and employers gain.

question

If the real interest rate is 3% and the inflation rate is 7%, then the nominal interest rate equals:

answer

question

If the price of TVs produced by XYZ-TV Company falls from $1,000 to $750 per TV set, then the:

answer

demand for labor by the XYZ-TV Company decreases.

question

Jim Brown would like to work, but has not looked for work in the past four weeks because he does not believe any jobs are available. In the official employment statistics, Jim is classified as:

answer

out of the labor force.

question

Who from among the following is counted as employed?

answer

Ray wants to work forty hours per week, but can only find work for twenty hours per week.

question

Which of the following is an example of cyclical unemployment?

answer

Marsha was laid off from her job with the airline because the recession reduced demand for airline travel. She expects to get her job back when the economy picks up.

question

Which of the following is an example of frictional unemployment?

answer

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

question

The key indicator of a country's living standard and economic well-being is:

answer

real GDP per person.

question

Which of the following is an example of an investment in human capital?

answer

A firm pays for workers to take college classes.

question

Current income minus spending on current needs equals:

answer

saving.

1 of 43

question

The scarcity principle states that

answer

with limited resources, having more of one thing means having less of another

question

Chris has a one-hour break between classes every Wednesday. Chris can either stay at the library and study or go to the gym and work out. The decision Chris must make is:

answer

an economic problem because Chris has only one hour, and engaging in one activity means giving up the other.

question

According to the Cost-Benefit Principle, you should go see the latest Star Wars movie with your friends this week-end if:

answer

the extra benefits of seeing the movie are greater than the extra costs of seeing the movie.

question

Alex received a four-year scholarship to State U. that covered tuition and fees, room and board, and books and supplies. If Alex becomes a full-time student, then:

answer

the opportunity cost of attending State U. includes the money Alex could have earned working for four years.

question

If you have a comparative advantage in a particular task, then:

answer

you give up less to accomplish that task than do others.

question

Regarding specialization, it is generally true that:

answer

specialization imposes costs as well as benefits.

question

If country A can produce more of practically everything than can country B, then which of the following statements is true?

answer

Trade can benefit both countries.

question

When a U.S. firm engages in outsourcing, it benefits ______ and harms ______.

answer

the U.S. consumers of the firm's products; the firm's U.S. employees

question

The entire group of buyers and sellers of a particular good or service makes up:

answer

A market

question

Which of the following is NOT true of a demand curve?

answer

It shows how an increase in price leads to an increase in quantity demanded of a good.

question

As coffee becomes more expensive, Joe starts drinking tea, and therefore quantity demanded for coffee decreases. This is called:

answer

the substitution effect.

question

Gertie saw a pair of jeans that she was willing to buy for $35. The price tag, though, said they were $29.99. Therefore:

answer

Gertie should buy the jeans because the price is less than her reservation price.

question

A decrease in the price of pizza will cause a(n):

answer

increase in quantity demanded.

question

Assume consumers eat either rice or pasta for dinner every night. If the price of rice increases, in the pasta market one would expect to see:

answer

an increase in the demand for pasta.

question

The market value of final goods and services produced within a country during a period of time is called:

answer

gross domestic product.

question

Which of the following is not classified as a final good?

answer

Fresh vegetables purchased by a restaurant

question

Capital goods are

answer

long-lived goods used for producing other goods and services.

question

The four components of aggregate expenditures are:

answer

consumption, investment, government spending, and net exports.

question

Which of the following would increase the consumption component of U.S. GDP?

answer

A restaurant in Denver purchases a bottle of California wine to include on its wine list.

question

Which of the following expenditures would increase the investment component of U.S. GDP?

answer

You purchase 1,000 shares of stock.

question

Government purchases include all of the following except:

answer

social security benefits paid by the federal government.

question

Which of the following would increase the government purchases component of U.S. GDP?

answer

The U.S. federal government pays $3 billion in salaries to soldiers in the military.

question

Three equivalent ways to measure GDP are total _____, total _____, and total ______.

answer

production; income; expenditure

question

Labor income includes:

answer

wages, salaries, and earnings of the self-employed.

question

To compare the change in physical production (GDP) between 2010 and 2016, we should compare ______ GDP in 2010 with ______ GDP in 2016.

answer

real;real

question

Real GDP is measured in ______ prices; nominal GDP is measured in ______ prices.

answer

base-year; current

question

Real GDP measures the ______ of production.

answer

physical volume

question

GDP excludes important factors that affect people's well-being, such as the value of:

answer

leisure time.

question

One shortcoming of real GDP as an indicator of society's social well-being is that it fails to take into account the:

answer

non-market production.

question

The measure of the cost of a standard basket of goods and services in any period relative to the cost of the same basket of goods and services in the base year is called the:

answer

consumer price index.

question

Which of the following is a nominal quantity?

answer

The current price of a barrel of oil

question

answer

increased; decreased

question

If workers received a 5 percent wage increase and the rate of inflation was 3 percent, then their real wage:

answer

increased.

question

If workers and employers agree to a three-year wage contract under the expectation of 3% inflation, and inflation turns out to be 5%, then:

answer

workers lose and employers gain.

question

If the real interest rate is 3% and the inflation rate is 7%, then the nominal interest rate equals:

answer

question

If the price of TVs produced by XYZ-TV Company falls from $1,000 to $750 per TV set, then the:

answer

demand for labor by the XYZ-TV Company decreases.

question

Jim Brown would like to work, but has not looked for work in the past four weeks because he does not believe any jobs are available. In the official employment statistics, Jim is classified as:

answer

out of the labor force.

question

Who from among the following is counted as employed?

answer

Ray wants to work forty hours per week, but can only find work for twenty hours per week.

question

Which of the following is an example of cyclical unemployment?

answer

Marsha was laid off from her job with the airline because the recession reduced demand for airline travel. She expects to get her job back when the economy picks up.

question

Which of the following is an example of frictional unemployment?

answer

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

question

The key indicator of a country's living standard and economic well-being is:

answer

real GDP per person.

question

Which of the following is an example of an investment in human capital?

answer

A firm pays for workers to take college classes.

question

Current income minus spending on current needs equals:

answer

saving.

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