question

The study of a single firm and how it determines prices would fall under: (micro or macro)

answer

Microeconomics

question

The opportunity cost of something is

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The highest-valued alternative that must be sacrificed to get something else ~~~~ (Not all alternatives, just the next best choice)

question

A resource is anything that

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Produces goods and services that meet human needs and wants ~~~~ (Can be used in production)

question

The local Taco Hut charges the same price for everything on its menu: $3 will buy a taco, or a burrito, or nachos. You buy the taco and think that if you had not purchased the taco, you would have purchased the burrito. The opportunity cost of the taco is

answer

The burrito

question

The current rate of unemployment of 5% is too high. This is an example of: (normative or positive)

answer

Normative

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The current rate of unemployment is 5%. This statement is: (normative or positive)

answer

Positive

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The point at which a recession ends and the expansion begins is called the

answer

Trough

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A period of rising real gross domestic product is an indicator of a

answer

Recovery

question

A pattern of expansion, then recession, then expansion again is a(n)

answer

Business cycle

question

The point on a business cycle when real gross domestic product stops rising and begins falling is a(n)

answer

Peak

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Based on Table 3-1, if the economy produces 2 units of consumer goods per period, it also can produce at most ______ units of capital goods per period.

answer

24

question

Use the "Production Possibility Curve for Tealand" Figure 3-4. In the figure, if Tealand is producing 10 million scones and 10 million cups of tea (point A), then we know that the economy

answer

Unemployment/recession

question

Use Table 3-4. If the economy produces 4 units of consumer goods per period, it also can produce at most _____ units of capital goods per period.

answer

10

question

Use Table 3-5. If Urbanville is currently producing at Combination F, what is the opportunity cost of a move to Combination E?

answer

5Z

question

Specialization and trade should lead to all of the following except

answer

Competition

question

An economy that has the lowest opportunity cost for producing a particular good is said to have a(n)

answer

Comparative advantage

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In a single day, George can bake 10 cakes while Greta can bake 5 cakes. We know that:

answer

George has absolute advantage (outputs and inputs)

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Economists are generally in support of

answer

Free international trade

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Goods and services purchased from abroad are ______, while goods and services sold abroad are ______

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Imports, exports

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A tax on imports of foreign goods is called

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Tariff

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If the market for corn is in equilibrium

answer

No shortages, no surpluses

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A negative relationship between the quantity demanded and the price is called the law of

answer

Demand

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Use the "Demand and Supply of Wheat" Figure 6-4. What is the equilibrium price in this wheat market?

answer

$6

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Use the "Demand and Supply of Wheat II" Figure 6-5. If a price of $8 temporarily exists in this market, a:

answer

Surplus of 4000 bushels will result

question

Investment spending represents spending on

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Purchase of capital (durable goods)

question

Gross Domestic Product or GDP is

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The market value of all final goods and services legally produced within a nation's borders during a given year

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A country's exports minus its imports during a period are

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Net exports ~~~~ (Exports add to GDP) (Imports subtract from GDP)

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Which of the following would NOT be a part of the GDP?

answer

Second-hand sales

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Real GDP is GDP adjusted for

answer

Inflation ~~~~ (Also called "constant dollar GDP")

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Use Table 11-3. Nominal GDP in Year 4 is equal to

answer

280

question

Use Table 11-3. Nominal GDP in Year 2 is equal to

answer

60

question

To be counted as unemployed, one must

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Not have a job, but be actively looking for one

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The labor force is considered to be

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Number unemployed + number employed

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Use Table 12-3. How many people are in the labor force?

answer

6000

question

Discouraged workers are those individuals

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Jobless who have given up work

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Unemployment that occurs because it takes workers and employees time to find each other is called

answer

Frictional Unemployment ~~~~ (Temporary unemployment of skilled workers)

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The natural rate of employment is

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"Full Employment" ~~~~ (only includes frictional and structural employment) (4-6% unemployment is normal)

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Cyclical unemployment is characterized as

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Real unemployment caused by economic downturn ~~~~ (Being laid off) (Lowers GDP)

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Increases in the average level of prices is called

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Inflation ~~~~ (Caused by expansions in the nation's money supply) (Continued rise in the general price level)

question

Which of the following annual rates of inflation would most likely be called hyperinflation

answer

Unusually high and accelerating rate of inflation. AKA thousands of percent rate

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Inflation doesn't reduce purchasing power if

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It causes an increase in nominal wages

question

The consumer price index reflects the

answer

Price level based on the consumption pattern of a typical consumer ~~~~ (Goal - include everything purchased by a typical consumer to get a measure of the cost of living)

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Use Table 15-2. Consider the information in the table provided. Which year is most likely to be the base year?

answer

2005 ~~~~ (In a base year, price index is always 100 because base year prices are always 100% of prices in the base year)

question

If goods A and Z are complements, an increase in the price of good Z will

answer

Lower demand for good A

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Suppose you manage a corner grocery store. If peanut butter is an inferior good, what do you suppose would happen to the price and quantity of peanut butter as incomes fall during an economic recession?

answer

Price and quantity would both increase

question

A newspaper story recently reported that the price of new cars has decreased, and the quantity of new cars sold has dropped. The price and quantity changes were probably caused by:

answer

Income decreasing (?)

question

Over the past several years, consumer tastes for tattoos have increased. This means that the ______ for tattoos has ______

answer

Demand, increased

question

Use the "Demand for Coconuts" Figure 5-1. If coconuts are considered a normal good and the overall income level of consumers is falling, then the movement that would take place in the model could be:

answer

C to A

question

Use the "Demand for Coconuts" Figure 5-1. If there is an overall increase in taste and preference for coconuts, then the movement that would take place in the model could be:

answer

A to C

question

Use the "Demand and Supply of Gasoline" Figure 6-3. A factor that may have changed supply from S1 to S2 is:

answer

Lower price per gallon

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