Macroeconomics Study - Assignment Essays

question

In economics, choices are necessary because of the presence of:

answer

Scarity

question

The basic goal of economics is:

answer

Addressing the scarcity problem created because the populations desire for goods exceeds the ability to produce them.

question

Because of scarcity:

answer

Individuals and societies must choose which wants and needs to satisfy.

question

Macroeconomics is the study of:

answer

The operation of the economy as a whole.

question

Microeconomics is the study of:

answer

Individual decision making units.

question

The patent system:

answer

Acts as a direct positive incentive.

question

If the government wanted to give people a negative direct incentive not to save money, what would be the appropriate policy?

answer

Imposing a tax on individuals for saving their money.

question

The government places warnings on cigarette and liquor packages. These warnings serve as a(n):

answer

Negative incentive

question

Economics is concerned with the trade-offs that emerge because of scarcity. The term "trade-offs" refers to:

answer

The alternatives given up when making choices.

question

The cost of a trade-off is known as the ________ of that decision.

answer

Opportunity cost.

question

Opportunity cost is the ________ alternative forfeited when a choice is made.

answer

Highest value

question

The opportunity cost of a purchase is:

answer

The alternative good or service and one sacrifices because a different goods was purchased.

question

How are changes in opportunity cost related to decision-making behavior?

answer

The lower the opportunity cost of doing an activity X, the more likely activity X will be done.

question

I asked my neighbor to rake the leaves on his lawn because they are blowing into my yard. He responded that it wouldn't be rational for him to do so. Why would this be the case?

answer

My neighbor is a lawyer who values his time at $200 an hour and knows that he can hire a high school kid to rake leaves for $20 an hour.

question

Instead of taking an economics course, you could have taken a history course that meets at the exact same time. The total cost of taking the economics course would be:

answer

The tuition cost, the cost of the textbook and notebook, and the fact that you could not take history course at the same time.

question

Why would economists find it surprising if the CEO of a large company does his or her own housework?

answer

The opportunity cost of CEO's time to quite high because they have a scarcity of time to spend on housework.

question

The opportunity cost of going to school rather than working is the cost of:

answer

Potential wages

question

The opportunity cost of working rather than going to school is:

answer

The higher wages that come with additional education.

question

When you chose a major, you likely thought about your skills. Let's say you don't enjoy dealing with numbers. How could you explain to your parents, using logic from economics, why you chose to major in English instead of mathematics?

answer

The opportunity cost of learning mathematics is too high.

question

Restaurants, bars, and convenience stores are often located near college campuses. These businesses frequently charge higher than normal prices. They are taking advantage of the fact that:

answer

Students place a high value on their scarce time and are willing to pay higher prices than they would at locations farther from campus.

question

The government has been considering doing away with minting pennies because they are rarely used for purchases (with most people collecting them or throwing them away). How would an economist best explain this?

answer

Prices have increased over time, and the opportunity cost of carrying around large quantities of pennies has become too large.

question

According to economists, one reason few professional athletes have PhD's is that the:

answer

Opportunity cost of going to graduate school is too high.

question

The term ________ means "additional."

answer

Marginal

question

Economists believe that optimal decisions are made up to the point where:

answer

Marginal benefits are equal to marginal cost.

question

An activity's marginal benefit is ________ at the optimal quantity.

answer

Equal to the marginal cost.

question

One way to promote a new business is to offer free items. If you were to open a new restaurant and offer free food, you likely would have a line out the door. How would an economist understand the behavior of those standing in line?

answer

Those waiting in line place a low value on the use of their time.

question

In 2009, the federal government created a program called Cash for Clunkers whereby consumers could trade in a less efficient car for a more efficient car and receive a higher value than they would have otherwise. How would an economist understand the decision that consumers faced?

answer

Consumers would compare the marginal benefits to the marginal costs of replacing their car, and this program made sure that marginal benefits would exceed marginal costs.

question

Comparative advantage emerges because of the presence of:

answer

Differing opportunity costs.

question

More oranges are grown in Florida than North Dakota because Florida's warm climate gives it a ________ in growing oranges.

answer

Higher.

question

The production possibilities frontier (PPF) shows:

answer

Trade off, how much we can produce given resources

question

A graph that shows the maximum attainable combinations of two goods when society efficiently uses its productive resources is called:

answer

PPF

question

At full employment, a society produces:

answer

All labor forces and all capital is being used, no unused capital

question

The area inside (within) the production possibilities frontier (PPF) contains:

answer

When your not utilizing the resources within the graph

question

How will a reduction in the national unemployment rate affect a nation's production possibilities frontier (PPF)?

answer

The PPF stays the same but getting closer to the line.

question

As you move from one efficient point on the production possibilities frontier (PPF) to another efficient point on the PPF, you experience:

answer

Opportunity cost

question

Suppose you find a production possibilities frontier (PPF) that is shaped like a straight line. What can you determine about the production of the two goods?

answer

Oppuritunity cost is constant. Regardless of how much you produce or sacrificing it stays the same.

question

Economic growth can be depicted on a production possibilities frontier (PPF) as an:

answer

A upward shift of the PPF.

question

An increase in general resources that affects the production of both goods on a production possibilities frontier (PPF) would cause an:

answer

An upward shift of the PPF

question

When one producer can create more of a good than another producer using the same quantity of resources, the first producer has:

answer

Comparative advantage

question

Consumer goods:

answer

Goods produced that you are using today. Bread, clothes.

question

Goods that are produced now so that they can be used to produce other goods in the future are called:

answer

Consumer goods

question

The opportunity cost of every investment in capital goods is:

answer

The consumer good. Your sacrificing what you have now for the future

question

Which of the following would NOT lead to an outward shift of a future production possibilities frontier (PPF)?

answer

Producing more of goods then needed.

question

Capital goods

answer

Goods used for the future that are saved.

question

For a market to be competitive:

answer

More then one buyer and seller. No individual or seller cant influence the product.

question

For a market to be a competitive:

answer

sellers must produce goods and services that are different from their competitors

question

Kim attends the farmer's market in her hometown of Bakersfield every Sunday. She notices that all of the oranges sold by the many different farmers at the market have roughly the same price, as do most other products that are alike. Which statement best explains why the prices are so similar?

answer

The farmer's market in Bakersfield is a competitive market so neither the consumer nor the producer has a large influence on the price, allowing for the market to set the price.

question

A monopoly is:

answer

exists when a single company supplies the entire market for a particular good or service.

question

Imperfect markets:

answer

occur when the buyer or seller has an influence on the price.

question

According to the law of demand, all other things being equal:

answer

the quantity demanded falls when the price rises, and the quantity demanded rises when the price falls.

question

When the price of an hour of tutoring increases:

answer

the quantity demanded for tutoring decreases.

question

Something is a normal good if the demand for the good:

answer

increases as the consumer's income increases.

question

Which of the following would cause a normal good's demand curve to shift to the left?

answer

Income decreases.

question

Something is an inferior good if the demand for the good:

answer

increases as the consumer's income decreases.

question

Two goods that are used together are called:

answer

complements

question

The price of good X increases by 25%, causing the quantity consumed of good Y to decrease by 10%. If everything else is held constant in the economy, we can say with certainty that good X and good Y are:

answer

complements

question

If the price of a good increases, holding all else constant:

answer

the demand for all of that good's substitutes will increase.

question

Companies use advertising to shift consumer demand. Which of the following demand shifters do you think advertisers most often rely on?

answer

changes in tastes and preferences

question

Which of the following will cause the demand curve for burgers to shift the right?

answer

A study is published by the National Association for Burger Research that says eating burgers can reduce the risk for bad acne.

question

An expectation of a lower price in the future will:

answer

decrease current demand

question

The demand curve for a good will shift to the right if, holding all else constant:

answer

consumers expect future prices to increase.

question

Chuck drives past the same gas station every day. He realizes that the gas station always changes its prices on Tuesdays but keeps the price steady the rest of the week. On Saturday, Chuck turns on the news and hears a report projecting that the price of gasoline is going to increase. Holding all else constant, what do you think would happen to Chuck's demand for gasoline on Monday?

answer

His demand would shift to the right.

question

Changes in population can:

answer

shift the demand curve of a good or service in an area.

question

As the life expectancy in the United States increases, which of the following could likely happen to the demand curve for items such as health care, cancer treatments, and nursing facilities, holding all else constant, and why?

answer

There would be an increase because there will be more buyers in these markets.

question

The law of supply states that, all other things being equal:

answer

the quantity supplied falls when the price falls, and the quantity supplied rises when the price rises.

question

Which of the following is both a shift in supply and a shift in demand?

answer

expectations of future prices

question

Which of the following will cause a movement along a good's supply curve?

answer

the price of the good increases

question

Inputs are:

answer

resources that firms use in the production of final goods and services

question

If the cost of flour increases from $3 to $5 a bag, you could predict the supply curve for bagels to:

answer

shift to the left.

question

Which following change in the coffee market would shift the supply curve to the right?

answer

The wage for employees in the coffee business decreases.

question

If a new french fry-cutting machine works twice as fast as the old machine, McDonald's would:

answer

be willing to produce and sell more french fries at every price.

question

When the government places a tax on the producer of a good or service:

answer

the supply curve for the good or service shifts to the left.

question

Firm A notices that Firm B is making a profit by producing footballs. There is nothing stopping Firm A from entering the football market, so it does. Holding all else constant, the number of firms in the market will:

answer

increase, causing the supply to increase.

question

When the price of ground beef increases and all else is held constant, we would expect the supply of hamburgers to _________, causing the price to _________.

answer

decrease; increase

question

When the price is _________ the equilibrium price, we would expect there to be a _________, causing the market to put _________ pressure on the price until it went back to the equilibrium price.

answer

above; surplus; downward

question

The equilibrium price of peanut butter is $5. A study comes out that says the fat in peanut butter is good for your heart. Holding all other factors constant, which of the following scenarios could happen?

answer

The price of peanut butter increases to $7 because of a demand shift.

question

In the first few months of 2012, the price of gasoline increased by approximately 15%. Because of this increase, we would expect the _________ curve in the market for hybrid cars to _________.

answer

demand; shift to the right

question

The difference between a tax and a subsidy is that when the government places a tax on a good, it _________ the equilibrium price and _________ the equilibrium quantity, whereas when the government places a subsidy on a good, it _________ the equilibrium price and _________ the equilibrium quantity.

answer

increases; decreases; decreases; increases

question

Leading economic indicators suggest that incomes will be going up next year. In response to these reports, companies are forecasting increased prices for future sales of their goods. As a result of these increases, the supply curve will:

answer

...

question

Compare and contrast the differences between a competitive market and an imperfect market, and give an example of an imperfect market.

answer

Prices have no influence with buyer or seller, but in imperfect market is opposite so it's a monopoly

question

Without using a graph, explain the difference between a movement along a demand curve and a shift in the entire demand curve.

answer

When non pricing changes happen

question

Compare and contrast the following sets of words:

answer

normal good versus inferior good

question

Comment on the statement from an opportunity cost perspective: "The major cost of going to college is the $15,000 per year in tuition." Assume that a person could have earned $30,000 a year if the person did not go to college

answer

the implicit cost is the wage you would be giving up

question

A person has a comparative advantage in the production of a good when she or he can produce the product at a(n) ________ opportunity cost compared to another person.

answer

lower

question

You should decide to go to a movie:

answer

if the marginal benefit of the movie exceeds its marginal cost.

question

Please explain two factors that will cause PPF to shift outward?

answer

Producing more goods then needed.

And when employment is high.

question

Increases in the minimum wage cause unemployment is a:

answer

Positive statement

question

Given current resources and technology, the unattainable range is best described as:

answer

points outside the PPF

question

Refer to the below diagram. A decrease in supply is depicted by a

answer

shift from S2 to S1

S1/ S2/

question

What effect should each of the following have upon the demand for portable music players in a competitive market? Explain your reasoning in each case.

(a) the development of improved, low-priced devices that compete with music players
(b) an increase in population and incomes
(c) a substantial increase in the number and quality of music for players

answer

A. Demand will decrease

B. Demand will increase

C. Demand will increase

question

An expectation of a higher price in the future will:

answer

increase current demand

question

Refer to the below diagram. An increase in quantity supplied is depicted by a:

answer

going from x to y on the supply curve

question

Which of the following would cause a normal goods demand curve to shift to the right?

answer

Income increases

1 of 93

question

In economics, choices are necessary because of the presence of:

answer

Scarity

question

The basic goal of economics is:

answer

Addressing the scarcity problem created because the populations desire for goods exceeds the ability to produce them.

question

Because of scarcity:

answer

Individuals and societies must choose which wants and needs to satisfy.

question

Macroeconomics is the study of:

answer

The operation of the economy as a whole.

question

Microeconomics is the study of:

answer

Individual decision making units.

question

The patent system:

answer

Acts as a direct positive incentive.

question

If the government wanted to give people a negative direct incentive not to save money, what would be the appropriate policy?

answer

Imposing a tax on individuals for saving their money.

question

The government places warnings on cigarette and liquor packages. These warnings serve as a(n):

answer

Negative incentive

question

Economics is concerned with the trade-offs that emerge because of scarcity. The term "trade-offs" refers to:

answer

The alternatives given up when making choices.

question

The cost of a trade-off is known as the ________ of that decision.

answer

Opportunity cost.

question

Opportunity cost is the ________ alternative forfeited when a choice is made.

answer

Highest value

question

The opportunity cost of a purchase is:

answer

The alternative good or service and one sacrifices because a different goods was purchased.

question

How are changes in opportunity cost related to decision-making behavior?

answer

The lower the opportunity cost of doing an activity X, the more likely activity X will be done.

question

I asked my neighbor to rake the leaves on his lawn because they are blowing into my yard. He responded that it wouldn't be rational for him to do so. Why would this be the case?

answer

My neighbor is a lawyer who values his time at $200 an hour and knows that he can hire a high school kid to rake leaves for $20 an hour.

question

Instead of taking an economics course, you could have taken a history course that meets at the exact same time. The total cost of taking the economics course would be:

answer

The tuition cost, the cost of the textbook and notebook, and the fact that you could not take history course at the same time.

question

Why would economists find it surprising if the CEO of a large company does his or her own housework?

answer

The opportunity cost of CEO's time to quite high because they have a scarcity of time to spend on housework.

question

The opportunity cost of going to school rather than working is the cost of:

answer

Potential wages

question

The opportunity cost of working rather than going to school is:

answer

The higher wages that come with additional education.

question

answer

The opportunity cost of learning mathematics is too high.

question

Restaurants, bars, and convenience stores are often located near college campuses. These businesses frequently charge higher than normal prices. They are taking advantage of the fact that:

answer

Students place a high value on their scarce time and are willing to pay higher prices than they would at locations farther from campus.

question

answer

Prices have increased over time, and the opportunity cost of carrying around large quantities of pennies has become too large.

question

According to economists, one reason few professional athletes have PhD's is that the:

answer

Opportunity cost of going to graduate school is too high.

question

The term ________ means "additional."

answer

Marginal

question

Economists believe that optimal decisions are made up to the point where:

answer

Marginal benefits are equal to marginal cost.

question

An activity's marginal benefit is ________ at the optimal quantity.

answer

Equal to the marginal cost.

question

answer

Those waiting in line place a low value on the use of their time.

question

answer

Consumers would compare the marginal benefits to the marginal costs of replacing their car, and this program made sure that marginal benefits would exceed marginal costs.

question

Comparative advantage emerges because of the presence of:

answer

Differing opportunity costs.

question

More oranges are grown in Florida than North Dakota because Florida's warm climate gives it a ________ in growing oranges.

answer

Higher.

question

The production possibilities frontier (PPF) shows:

answer

Trade off, how much we can produce given resources

question

A graph that shows the maximum attainable combinations of two goods when society efficiently uses its productive resources is called:

answer

PPF

question

At full employment, a society produces:

answer

All labor forces and all capital is being used, no unused capital

question

The area inside (within) the production possibilities frontier (PPF) contains:

answer

When your not utilizing the resources within the graph

question

How will a reduction in the national unemployment rate affect a nation's production possibilities frontier (PPF)?

answer

The PPF stays the same but getting closer to the line.

question

As you move from one efficient point on the production possibilities frontier (PPF) to another efficient point on the PPF, you experience:

answer

Opportunity cost

question

Suppose you find a production possibilities frontier (PPF) that is shaped like a straight line. What can you determine about the production of the two goods?

answer

Oppuritunity cost is constant. Regardless of how much you produce or sacrificing it stays the same.

question

Economic growth can be depicted on a production possibilities frontier (PPF) as an:

answer

A upward shift of the PPF.

question

An increase in general resources that affects the production of both goods on a production possibilities frontier (PPF) would cause an:

answer

An upward shift of the PPF

question

When one producer can create more of a good than another producer using the same quantity of resources, the first producer has:

answer

Comparative advantage

question

Consumer goods:

answer

Goods produced that you are using today. Bread, clothes.

question

Goods that are produced now so that they can be used to produce other goods in the future are called:

answer

Consumer goods

question

The opportunity cost of every investment in capital goods is:

answer

The consumer good. Your sacrificing what you have now for the future

question

Which of the following would NOT lead to an outward shift of a future production possibilities frontier (PPF)?

answer

Producing more of goods then needed.

question

Capital goods

answer

Goods used for the future that are saved.

question

For a market to be competitive:

answer

More then one buyer and seller. No individual or seller cant influence the product.

question

For a market to be a competitive:

answer

sellers must produce goods and services that are different from their competitors

question

answer

The farmer's market in Bakersfield is a competitive market so neither the consumer nor the producer has a large influence on the price, allowing for the market to set the price.

question

A monopoly is:

answer

exists when a single company supplies the entire market for a particular good or service.

question

Imperfect markets:

answer

occur when the buyer or seller has an influence on the price.

question

According to the law of demand, all other things being equal:

answer

the quantity demanded falls when the price rises, and the quantity demanded rises when the price falls.

question

When the price of an hour of tutoring increases:

answer

the quantity demanded for tutoring decreases.

question

Something is a normal good if the demand for the good:

answer

increases as the consumer's income increases.

question

Which of the following would cause a normal good's demand curve to shift to the left?

answer

Income decreases.

question

Something is an inferior good if the demand for the good:

answer

increases as the consumer's income decreases.

question

Two goods that are used together are called:

answer

complements

question

answer

complements

question

If the price of a good increases, holding all else constant:

answer

the demand for all of that good's substitutes will increase.

question

Companies use advertising to shift consumer demand. Which of the following demand shifters do you think advertisers most often rely on?

answer

changes in tastes and preferences

question

Which of the following will cause the demand curve for burgers to shift the right?

answer

A study is published by the National Association for Burger Research that says eating burgers can reduce the risk for bad acne.

question

An expectation of a lower price in the future will:

answer

decrease current demand

question

The demand curve for a good will shift to the right if, holding all else constant:

answer

consumers expect future prices to increase.

question

answer

His demand would shift to the right.

question

Changes in population can:

answer

shift the demand curve of a good or service in an area.

question

answer

There would be an increase because there will be more buyers in these markets.

question

The law of supply states that, all other things being equal:

answer

the quantity supplied falls when the price falls, and the quantity supplied rises when the price rises.

question

Which of the following is both a shift in supply and a shift in demand?

answer

expectations of future prices

question

Which of the following will cause a movement along a good's supply curve?

answer

the price of the good increases

question

Inputs are:

answer

resources that firms use in the production of final goods and services

question

If the cost of flour increases from $3 to $5 a bag, you could predict the supply curve for bagels to:

answer

shift to the left.

question

Which following change in the coffee market would shift the supply curve to the right?

answer

The wage for employees in the coffee business decreases.

question

If a new french fry-cutting machine works twice as fast as the old machine, McDonald's would:

answer

be willing to produce and sell more french fries at every price.

question

When the government places a tax on the producer of a good or service:

answer

the supply curve for the good or service shifts to the left.

question

answer

increase, causing the supply to increase.

question

When the price of ground beef increases and all else is held constant, we would expect the supply of hamburgers to _________, causing the price to _________.

answer

decrease; increase

question

When the price is _________ the equilibrium price, we would expect there to be a _________, causing the market to put _________ pressure on the price until it went back to the equilibrium price.

answer

above; surplus; downward

question

answer

The price of peanut butter increases to $7 because of a demand shift.

question

In the first few months of 2012, the price of gasoline increased by approximately 15%. Because of this increase, we would expect the _________ curve in the market for hybrid cars to _________.

answer

demand; shift to the right

question

answer

increases; decreases; decreases; increases

question

answer

...

question

Compare and contrast the differences between a competitive market and an imperfect market, and give an example of an imperfect market.

answer

Prices have no influence with buyer or seller, but in imperfect market is opposite so it's a monopoly

question

Without using a graph, explain the difference between a movement along a demand curve and a shift in the entire demand curve.

answer

When non pricing changes happen

question

Compare and contrast the following sets of words:

answer

normal good versus inferior good

question

answer

the implicit cost is the wage you would be giving up

question

A person has a comparative advantage in the production of a good when she or he can produce the product at a(n) ________ opportunity cost compared to another person.

answer

lower

question

You should decide to go to a movie:

answer

if the marginal benefit of the movie exceeds its marginal cost.

question

Please explain two factors that will cause PPF to shift outward?

answer

Producing more goods then needed.

And when employment is high.

question

Increases in the minimum wage cause unemployment is a:

answer

Positive statement

question

Given current resources and technology, the unattainable range is best described as:

answer

points outside the PPF

question

Refer to the below diagram. A decrease in supply is depicted by a

answer

shift from S2 to S1

S1/ S2/

question

answer

A. Demand will decrease

B. Demand will increase

C. Demand will increase

question

An expectation of a higher price in the future will:

answer

increase current demand

question

Refer to the below diagram. An increase in quantity supplied is depicted by a:

answer

going from x to y on the supply curve

question

Which of the following would cause a normal goods demand curve to shift to the right?

answer

Income increases

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