MacEcon Final Review

32 terms by kristenkelli

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a

Which of the following would an economist classify as capital?

a lawyer's personal computer

the expression "there is no such thing as a free lunch" means that

even if it has a price of zero, a good or service has a cost

In macroeconomics, we analyze

the overall performance of the economy as a whole

The assumption of rational self-interest means that the economic decision makers

make reasonable decisions based on their expectations of results

Your friend notices that U.S. auto production and U.S. Population growth have moved together over several decades. he reasons that one way to slow population growth if for the government to order the auto makers to cut back on production. You gently point out to him that he

has mistakenly inferrred causation from observed correlation

Sunk costs

should not be considered when making economic decisions

The law of comparitive advantage states that the person who should produce a good is the person who

has the lowest opportunity cost of producing that good

What would the income effect of a price change be greatest on

the highest priced item

Which of the following is the best example of substitutes

hiking botts and athletic shoes

two goods are considered substitutes only if an

increase in the price of one leads to an increaese in demand for the other

An increase in the demand for peanut butter could be cause by an

decrease in the price of bread

Assume that corn and soybeands are alternatives which could be grown by most farmers. A rise in the price of corn will

decrease the supply of soybeans

Which of the following is correst when a price floor is set above the equilibrium price

quantity supplied is equal to quantity demanded at the set price

In terms of the numbers of firms in the U.S. economy, the most common type of firm is the

sole proprietership

When the soical cost of production is greater than the private cost, we have a

negative externality

Which of the following accounts for he largest source of revenue for the federal government?

personal income tax (out of sales tax, federal property tax, corporate income tax, and borrowing)

A recession is a period during which

employment, production and income decreaes

As the U.S. price level DECREASES, the aggregate quantity of US output demanded

increases because US products become more expensive relative to foreign products

The Keynesian approach to government economic policy

highlighted the role of aggregate demand

The Keynesian approach to fiscal policy calls for

tax cuts during a recession

In the 1960's, government policy makers thought they could

use taxation and government spending to fine-tune the economy

The resource most commonly used to measure productivity is

labor

A decrease in the capital-labor ratio means

lower labor productivity because the labor is working with relatively less capital

If per capita GDP growth exceeds labor productivity growth

employment must be growing faster than the population

In order for a society to have a rising standard of living, output per worker must grow

faster than the population growth rate

The SLOWDOWN of labor productivity in the US

has also been experienced by other developed nations in Europe

Which of the following best describes an intermediate good

It helps to produce another good

Which of the following is not considered a component of government purchases in calculating GDP

unemployment compensation payments

Use the following data to calculate GDP: Consumption = 2,000; gross investment = 600, government purchases = 500; net exports = -40, transfer payments = 340

GDP = $3060

Which of the following is an injection into the circular flow

exports (out of consumption, taxes, savigns, and government borrowing)

A problem measuring GDP is that

the value of service output often fails to reflect improvements in the speed or quality of service

You could determine the value of the GDP price index if you knew

current GDP at current and base-year prices

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