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WorksheetsEcon 102
Total questions: 142
Worksheet time: 1hrs 16mins
Scarcity is
a situation in which individuals can purchase any item they wish.
the study of choice.
the study of how households and firms make decisions and how they interact in markets.
a situation in which the available resources are not enough to satisfy the wants of the people.
The opportunity cost of a choice is the
consequence associated with failure.
dollar amount paid to purchase what is chosen.
value of the next best alternative not chosen.
benefit associated with making that choice.
Macroeconomics
is the study of how households and firms make decisions and how they interact in markets.
describes the limited nature of societies resources.
is the study of choice
is the study of the behavior of the overall economy including inflation, unemployment, and economic growth.
Microeconomics is
the study of how households and firms make decisions and how they interact in markets.
the study of the limited nature of society's resources.
is the study of the behavior of the overall economy including inflation, unemployment, and economic growth.
the study of choice under conditions of scarcity.
Identify examples of microeconomics and macroeconomics:
Sales volumes of Walmart stores
Microeconomics
Macroeconomics
Identify examples of microeconomics and macroeconomics:
How the government responded to the recent recession
Microeconomics
Macroeconomics
Identify examples of microeconomics and macroeconomics:
Last month's U.S. inflation rate
Microeconomics
Macroeconomics
Identify examples of microeconomics and macroeconomics:
The rising prices of textbooks
Microeconomics
Macroeconomics
Which of the following is an example of a positive statement?
Everyone in the country needs to be covered by national health insurance.
A high rate of economic growth is good for the country.
Baseball players should not be paid higher salaries than the president of the United States.
The rate of unemployment is 4 percent.
Statements that make prescriptive value judgments are
nominal
positive.
pecuniary
normative
Identify normative or positive statements:
Everyone in the country should be covered by national health insurance
positive
normative
Identify normative or positive statements:
The current rate of unemployment of 5 percent is too high
positive
normative
Identify normative or positive statements:
Smokers are more likely to be extraverts than nonsmokers.
positive
normative
Identify normative or positive statements:
A high rate of economic growth creates more jobs.
positive
normative
The fundamental economic questions every economic system must answer are
how, when, and how much.
what, how, and for whom.
what, why, and for whom.
when, why, and for whom.
The factors of production are
stocks, bonds, and financial assets.
capital, labor, land, and entrepreneurship.
money, profit, and interest
technology, human capital, and money.
Based on the information in the graph above, is the following combination efficient, inefficient, or impossible?
200 bicycles, 20 trucks
Efficient
Inefficient
Impossible
Based on the information in the graph above, is the following combination efficient, inefficient, or impossible?
500 bicycles, 0 trucks
Efficient
Inefficient
Impossible
Based on the information in the graph above, is the following combination efficient, inefficient, or impossible?
400 bicycles, 40 trucks
Efficient
Inefficient
Impossible
Based on the information in the graph above, is the following combination efficient, inefficient, or impossible?
0 bicycles, 50 trucks
Efficient
Inefficient
Impossible
The typical production possibility curve shows _______ opportunity costs, meaning that if a nation produces more of one good, it will require giving up an _______ amount of production of another good.
Increasing, Decreasing
Decreasing, Increasing
Increasing, Increasing
Decreasing, Decreasing
Based on the information in the above table, the opportunity cost of producing the fourth movie is
11 Laptops
15 Laptops
nonexistent
26 Laptops
Refer to the above graph. A movement from Point A to Point B indicates
a gain in both sedans and SUVs.
a gain in SUVs and a loss in sedans.
a loss in both sedans and SUVs.
a gain in sedans and a loss in SUVs.
The law of increasing opportunity costs is a result of the fact that
the value of the dollar has declined over time
consumers tend to value a good more when they don't have much of it.
resources are not equally productive in all output categories.
wage rates rise as the economy reaches full employment.
If a firm adopts a technology that can increase production without increasing labor or other resource inputs, then
its production possibilities curve shifts inward.
its production possibilities curve shifts outward reaching a previously unattainable point.
its production possibilities curve remains unchanged.
there is movement along the production possibilities curve.
The gains from trade occur due to
higher levels of scarcity.
more equality among people.
specialization.
less scarcity.
Which of the following is not a gain from specialization?
Development of expertise
Minimizing Downtime
Comparative Advantage
Absolute Advantage
Christy has a comparative advantage over Joel in making pizzas relative to making hotdogs. This means that
the opportunity cost of making pizzas is lower for Christy than for Joel.
Christy makes more pizzas in an hour than Joel does.
Christy makes more hotdogs in an hour than Joel does.
the opportunity cost of making pizzas is higher for Christy than for Joel.
Suppose that Jake and Jill have the ability to pick either apples or strawberries. The following table shows how much they can pick in one hour.
Between apples and strawberries, Jake has a comparative advantage for picking ______.
Apples
Strawberries
Either
Both
Suppose that Jake and Jill have the ability to pick either apples or strawberries. The following table shows how much they can pick in one hour.
Jill has a comparative advantage for picking ____.
Apples
Strawberries
Either
Both
Suppose that Jake and Jill have the ability to pick either apples or strawberries. The following table shows how much they can pick in one hour.
According to the principle of comparative advantage, ______ should specialize in picking apples
Jake
Jill
Either
Both
Suppose that Jake and Jill have the ability to pick either apples or strawberries. The following table shows how much they can pick in one hour.
According to the principle of comparative advantage, ____ should specialize in picking strawberries.
Jake
Jill
Either
Both
Suppose that Jake and Jill have the ability to pick either apples or strawberries. The following table shows how much they can pick in one hour.
For Jake, the opportunity cost of picking one pound of apples is ____
2
4
0.5
8
Suppose that Jake and Jill have the ability to pick either apples or strawberries. The following table shows how much they can pick in one hour.
For Jake, the opportunity cost of picking one pound of strawberries is ____
2
4
0.5
8
Suppose that Jake and Jill have the ability to pick either apples or strawberries. The following table shows how much they can pick in one hour.
For Jill, the opportunity cost of picking one pound of apples is ____
0.5
1
2
10
Suppose that Jake and Jill have the ability to pick either apples or strawberries. The following table shows how much they can pick in one hour.
For Jill, the opportunity cost of picking one pound of strawberries is ____
0.5
1
2
10
An economy has a comparative advantage in the production of a good if it can
produce that good with a higher opportunity cost than another economy.
produce the good at a lower opportunity cost than another economy.
produce that good with fewer resources.
produce that good with more resources than another economy.
Use the table above. Canada's opportunity cost of producing 1 thermos is
0.67 phones
1.5 phones
1.25 phones
0.80 phones
Use the table above. Canada's opportunity cost of producing 1 phone is
1.25 thermoses
0.8 thermoses
0.67 thermoses
1.50 thermoses
Mexico has comparative advantage in the production in ____
Phones
Thermoses
Mexico has comparative advantage in the production in phones , and Canada has comparative advantage in ____.
Phones
Thermoses
Mexico has comparative advantage in the production in phones , and Canada has comparative advantage in phones. This means Mexico will ____ thermoses
import
export
Mexico has comparative advantage in the production in phones , and Canada has comparative advantage in phones. This means Mexico will import thermoses and Canada will _____ phones.
import
export
The minimum price that would be accepted for 1 phone would be (a) thermoses
The minimum price that would be accepted for 1 phone would be .67 thermoses while the maximum price that would be paid for 1 phone would be (a) thermoses.
The minimum price that would be accepted for 1 phone would be 0.67 thermoses while the maximum price that would be paid for 1 phone would be 0.80 thermoses. The minimum price that would be accepted for 1 thermos would be (a) phones
The minimum price that would be accepted for 1 phone would be 0.67 thermoses while the maximum price that would be paid for 1 phone would be 0.80 thermoses. The minimum price that would be accepted for 1 thermos would be 1.25 phones while the maximum price that would be paid for 1 thermos would be (a) phones.
A method of production in which each person concentrates on a limited number of activities is known as
specialization
comparative advantage
refined production
absoluate advantage
Sandra can wash 5 windows in 1 hour or she can wash 1 car in 1 hour. Mark can wash 8 windows in 1 hour or he can wash 2 cars in 1 hour. Sandra
does not have absolute advantage in washing windows or cars.
only has absolute advantage in washing cars.
has absolute advantage in washing both windows and cars.
only has absolute advantage in washing windows.
Sandra can wash 5 windows in 1 hour or she can wash 1 car in 1 hour. Mark can wash 8 windows in 1 hour or he can wash 2 cars in 1 hour. Mark's opportunity cost of
washing 1 window is washing 0.25 cars, and Sandra's opportunity cost of washing 1 window is washing 0.2 cars.
washing 1 window is washing 5 cars, and Sandra's opportunity cost os washing 1 window is washing 4 cars.
washing 1 window is washing 0.25 cars, and Sandra's opportunity cost of washing 1 window is washing 4 cars.
washing 1 window is washing 5 cars, and Sandra's opportunity cost of washing 1 window is washing 0.2 cars.
It takes Andrew 3 hours to cook dinner and 5 hours to do a load of laundry. It takes Emily 2 hours to cook dinner and 4 hours to do a load of laundry. From this information, we can say which of the following?
Andrew should specialize in cooking dinner, and Emily should specialize in doing the laundry.
Emily should specialize in both cooking dinner and doing the laundry.
Andrew should specialize in doing the laundry, and Emily should specialize in cooking dinner.
Andrew should specialize in both cooking dinner and doing the laundry.
It takes Andrew 3 hours to cook dinner and 5 hours to do a load of laundry. It takes Emily 2 hours to cook dinner and 4 hours to do a load of laundry. Andrew and Emily would be willing to trade 1 load of laundry for
0.55 cooked dinners
1.8 cooked dinners
1.5 cooked dinners
2.5 cooked dinners
What concept does the PPF Curve illustrate?
Growth
Opportunity Cost
Externalities
Trade
Scarcity
The PPF Curve provides an explanation for economic recessions.
True
False
Trees are an example of what type of factor of production (input) in the production process.
It is not considered part of the production process.
Entrepreneurship
Land
Labor
Physical Capital
Which of the following is a normative statement?
On average, hyperinflation leads to political instability.
GDP grows faster for developing countries than for developed countries.
The best way to reduce wealth inequality is through redistributive policies.
The average unemployment rate is around 5%.
Which of the following is a positive statement?
The strategy that lowers unemployment the most is worker training programs.
It is crucial to control unemployment to prevent political instability.
It is important to reduce unemployment.
To reduce unemployment, it is better to reduce the costs of relocating for a job.
Which is a question for microeconomics?
Do federal tax cuts lead to economic growth?
Does household income impact purchases of solar panels?
Does the selling of US government bond by the Federal Reserve lead to inflation?
Are there policies that can reduce unemployment?
Which of the following is a question for macroeconomics?
What factors impact household spending on luxury goods?
How much would consumers be willing to pay for a self driving vehicle?
How did the Covid-19 outbreak impact the market for lumber?
Do federal tax incentives for employers reduce unemployment?
Which of the following is an example of the capital factor of production?
The trees used to create lumber for housing.
A plumber's understanding of the best way to complete a plumbing job.
The time a mechanic spends working on a car.
An inventors' use of the current technology to create new forms of artificial intelligence.
The PPF Curve model can be used to illustrate economic recessions, but it does not tell us what causes economic recessions.
True
False
A leftward shift of the PPF Curve represents an economic recession.
True
False
Comparative advantage is the ability to produce a good or service using fewer inputs than another producer uses.
True
False
An individual will import a good for which they have a comparative advantage, and they will export the good for which they do not have a comparative advantage.
True
False
A method of production where each individual specializes in a limited number of activities is known as
livelihood
specialization
focus
area
Absolute advantage is one of the gains from specialization.
True
False
Lori and Bob work on a team project. Lori can produce 1 contract estimate per hour and 7 potential contract leads. Bob can produce 3 contract estimates per hour and 10 contract leads. Which of the following is true?
Lori has absolute advantage in both goods.
Bob has comparative advantage in both goods.
Bob has absolute advantage in both goods.
Lori has comparative advantage in both goods.
Lori and Bob work on a team project. Lori can produce 1 contract estimate per hour and 7 potential contract leads. Bob can produce 3 contract estimates per hour and 10 contract leads. Which of the following is true?
Bob should specialize in contract estimates, and Lori should specializing in producing contract leads.
Bob should specialize in estimating contracts and producing contract leads.
Lori should specialize in estimating contracts and in producing contract leads.
Lori should specialize in estimating contracts, and Bob should specialize in producing contract leads.
It takes Jason 18 hours to sand a table and 8 hours to re-stain the table. It take Maureen 15 hours to sand a table and 6 hours to re-stain the table. Based on this information we can say that
Jason has absolute advantage in sanding tables, and Maureen has absolute advantage in re-staining tables.
Maureen has absolute advantage in both sanding tables and in re-staining tables.
Jason has absolute advantage in re-staining tables, and Maureen has absolute advantage in sanding tables.
Jason has absolute advantage in both sanding tables and restaining tables.
It takes Jason 18 hours to sand a table and 8 hours to re-stain the table. It take Maureen 15 hours to sand a table and 5 hours to re-stain the table. Based on this information we can say that
Jason has comparative in re-staining the table and Maureen has comparative advantage in sanding the table.
Jason has comparative advantage in sanding the table and Maureen has comparative advantage in re-staining the table.
Jason has comparative advantage in both sanding and re-staining the table.
Maureen has comparative advantage in both sanding the table and re-staining the table
If a person has absolute advantage in the production of both goods, then that person should produce both goods.
True
False
"We should reduce the amount of federal taxes that individuals pay". This is an example of what type of statement?
Normative
Positive
"The Federal Reserve Bank voted to raise the target Federal Funds Rate in December 2015." This is an example of why type of statement?
Normative
Positive
Greece must default on its debt if it is to recover economically from the severe depression it is currently in.
Normative
Positive
Diamonds used in the construction of some goods is classified as what type of input in the production process.
Land (Natural Resources)
Entrepreneurship
Labor
Human Capital
Physical Capital
Attending College is considered what type of input in the production process?
Land (Natural Resources)
Entrepreneurship
Labor
Human Capital
It is not considered part of the production process
GDP is defined as
the market value of all goods and services produced within a country during a given period of time.
the book value of all final goods and services produced within a country during a given period of time.
the market value of all final goods and services produced within a country during a given period of time.
the book value of all goods and services produced within a country during a given period of time.
Which of the following is a goal of macroeconomic policy?
Economic Growth
Stable Prices
Full Employment
All answers are correct
The macroeconomic policy goal of stable prices refers to
an inflation rate of zero
a constant rate of inflation
an increasing rate of inflation
a decreasing rate of inflation
Theoretically, for an economy, the income earned in the economy ____ the expenditures in the economy. This is true, because the money that each buyer spends ___ the money that each seller receives.
must equal; equals
is less than; greater than
is greater than; less than
must equal; greater than
Use the table above. Using the income approach to computing GDP, what is the value of the wages component of GDP?
$1,675M
$775M
$2,475M
$1,050M
Use the table above. Using the income approach to computing GDP, what is the GDP?
$6,250M
$7,750M
$5,450M
$6,950M
Use the table above. Using the expenditure approach to calculating GDP, what is the value of the investment component of GDP?
$1,190M
$390M
$300M
$890M
Use the table above. Using the expenditure approach to calculating GDP, what is the GDP?
$1,955M
$2,020M
$2,010M
$1,950M
Indicate whether each of the following transactions is part of a spending component of U.S. GDP or not:
A family in the United States receives $500 in food stamps from the government.
In GDP
Not in GDP
Indicate whether each of the following transactions is part of a spending component of U.S. GDP or not:
The Department of Defense orders two fighter planes from U.S. Lockheed Martin.
In GDP
Not in GDP
Indicate whether each of the following transactions is part of a spending component of U.S. GDP or not:
A U.S. resident purchases $5,000 worth of Facebook stock.
In GDP
Not in GDP
Indicate whether each of the following transactions is part of a spending component of U.S. GDP or not:
A U.S. farmer sells 500 bushels of corn to Cuba
In GDP
Not in GDP
Indicate whether each of the following transactions is part of a spending component of U.S. GDP or not:
A U.S. resident purchases a Swiss-made watch directly from the supplier's website.
In GDP
Not in GDP
Transfer payments are
excluded from GDP but included in government purchases.
excluded from government purchases and GDP.
included in government purchases but excluded from GDP.
included in government purchases and in GDP.
Which of the following is NOT omitted from the calculation of U.S. GDP?
Spending on Travel within the U.S.
The underground economy
Non Market Production
Quality improvement
Determine the spending category for each of the following transactions:
Determine the spending category for each of the following transactions:
Investment
Not in GDP
Government
Consumption
Determine the spending category for each of the following transactions:
Your brother buys a used car from his friend.
Investment
Not in GDP
Government
Consumption
Determine the spending category for each of the following transactions:
The city of Houston purchases paper for its employees from a local store.
Investment
Not in GDP
Government
Consumption
Determine the spending category for each of the following transactions:
You purchase a new truck for attending classes.
Investment
Not in GDP
Government
Consumption
Government purchases include
payments for services of government officials.
pension payments to retired military personnel.
social security payments.
Government purchases include
purchases of vehicles by government agencies.
pension payments to retired military personnel.
social security payments.
To find out whether an economy's output is growing or shrinking, one must keep track of changes in
the cost of living.
nominal GDP.
the general price level.
real GDP.
Use the table above with 2016 as the base year. What is the nominal GDP in 2017?
$109,075
$97,040
$119,330
$1,488
Use the table above with 2016 as the base year. What is the real GDP in 2017?
$109,075
$97,040
$119,330
$1,488
Use the table above with 2016 as the base year. What is the nominal GDP in 2018?
$109,075
$157,500
$119,330
$1,488
Use the table above with 2016 as the base year. What is the real GDP in 2018?
$129,250
$157,500
$119,330
$1,488
Use the table above with 2016 as the base year. What is the GDP Deflator in 2017?
109
100
91
not enough information
Use the table above with 2016 as the base year. What is the inflation rate between 2016 and 2017?
-9%
0%
10%
9%
Comparative advantage is defined as the ability to produce a good or service using fewer inputs than another producer uses.
True
False
Everyone within a country that trades is made better off by trade
True
False
It takes Sarah 10 hours to paint a shed, and 5 hours to replace the breaks on a car. It takes James 12 hours to paint a shed and 7 hours to replace the breaks on a car. James has absolute advantage in both painting sheds and replacing breaks.
True
False
It takes Sarah 10 hours to paint a shed, and 5 hours to replace the breaks on a car. It takes James 12 hours to paint a shed and 7 hours to replace the breaks on a car. James should specialize in replacing breaks, and Sarah should specialize in painting sheds.
True
False
Decisions on whether 2 parties should trade are based on absolute advantage.
True
False
Traci can mow 5.5 lawns in 1 hour, or she can plant 3.5 flowers in 1 hour. Janine can mow 4.5 lawns in 1 hour, or she can plant 2.5 flowers in 1 hour. From this information we can say that
Traci has absolute advantage in mowing lawns and Janine has absolute advantage in planting flowers.
Janine has absolute advantage in planting flowers and mowing lawns.
Traci has absolute advantage in planting flowers and Janine has absolute advantage in mowing lawns.
Traci has absolute advantage in both planting flowers and mowing lawns.
Traci can mow 5.5 lawns in 1 hour, or she can plant 3.5 flowers in 1 hour. Janine can mow 4.5 lawns in 1 hour, or she can plant 2.5 flowers in 1 hour. From this information we can say that
Traci has comparative advantage in mowing lawns, and Janine has comparative advantage in planting flowers.
Janine has a comparative advantage in mowing lawns and planting flowers.
Traci has a comparative advantage in mowing lawns and planting flowers.
Traci has comparative advantage in planting flowers, and Janine has comparative advantage in mowing lawns.
Which of the following is an example of production that is included (increases) in the GDP for 2015?
The home built in 2014 but not sold until purchased by an individual in 2015.
A car produced in Japan in 2015 and sold in the U.S in 2015.
None of the answers are correct.
The monthly unemployment insurance received by an out of work individual.
Which of the following is included in the Investment component of 2015 GDP?
The trucks that were produced in 2015 but were not sold.
A steel beam produced in the U.S. and used in construction.
None of the above
Which of the following is included in the Investment component of 2015 GDP?
A home built in 2015 and purchased by an individual in 2015.
A steel beam produced in the U.S. and used in construction.
None of the above
Suppose I purchased a used 2013 Prius this summer. If the Prius was produced in the U.S., this purchase will be included in the U.S. GDP for this year.
True
False
The salary of a car salesman is included in GDP when calculated using the expenditure approach.
True
False
Which of the following would be included (increase) in 2013 U.S. GDP?
A tire produced in the U.S. in 2013 and not sold until 2014.
The U.S. purchase of a laptop made in Japan in 2013.
A set of dishes produced in the U.S. in 2012 and sold in 2013.
Which of the following would be included (increase) in 2013 U.S. GDP?
A burrito purchased from a U.S. chipotle in 2013.
The U.S. purchase of a laptop made in Japan in 2013.
A set of dishes produced in the U.S. in 2012 and sold in 2013.
The macroeconomic goal of full employment means zero unemployment.
True
False
The macroeconomic goal of stable prices means a constant, low inflation rate.
True
False
One of the reasons that economists have moved beyond the PPF curve to model the macro economy is, because the PPF curve does not tell us what cause economic growth.
True
False
GDP is defined as the market value of all goods and services produced within a country during a given period of time.
True
False
Which of the following is not an example of a transfer payment?
The money that needy families receive every month to buy groceries.
The year-end bonuses many individuals receive for their work in a company.
The social security income many seniors receive every month.
The money that out of work individuals receive every month to supplement their loss of income.
Which of the following would be included in the 2021 consumption component of US GDP?
The purchase of a shirt produced in 2021 in the UK by a person living in the US.
The purchase of a TV produced in 2021 in the US by a person living in the US.
The purchase of a watch produced in 2021 in the US by a person living in Germany.
The purchase of a new house produced in 2021 in the US by a family in the US.
All final goods consumed in the US are included in US GDP
True
False
All goods produced by a country's citizens are included in the country's GDP.
True
False
Which of the following isn't a goal of macroeconomic policy that all economists agree on?
Full Employment
Employment subsidies
stable prices
economic growth
Which of the following isn't a goal of macroeconomic policy that all economists agree on?
Full Employment
Regulation
stable prices
economic growth
The income received from temporary aid to needy families (TANF) is included in which component of GDP?
None of the answers are correct.
Consumption Expenditures
Government Expenditures
Investment Expenditures
Which of the following will be included in (meaning increases) U.S. GDP for 2016?
A car produced in 2016 by U.S. citizens in Mexico and purchased by an individual living in the U.S.
An individual in the U.S. purchases a 2016 housing cleaning service from a business run by a citizen of Sweden living in the U.S.
The resale of a U.S. home built in 2015.
Which of the following will be included in (meaning increases) U.S. GDP for 2016?
A car produced in 2016 by U.S. citizens in Mexico and purchased by an individual living in the U.S.
An individual in Canada purchases a table built in the U.S. in 2016.
The resale of a U.S. home built in 2015.
Which of the following would not be included in the I component of 2020 US GDP?
An airplane produced in the US in 2020 and sold to an airline in Germany.
A new home produced in the US in 2020 and sold to a family in 2020.
A truck produced in the US in 2020 but not sold in 2020
A computer produced in the US in 2020 and sold to a US construction company in 2020.
The macroeconomic goal of stable prices means that there is no inflation.
True
False
Which of the following is not included in the G component of GDP?
Spending on the salaries of police officers
Spending on aircraft by the Department of Defense
Spending on new playground equipment for a park by the City of Reno
Spending on rent assistance programs by the US federal government
In practice, GDP measured using the income approach to calculating GDP and the expenditure approach to calculating GDP will be the same.
True
False
GDP is defined as the market value of all final goods and services consumed within a country during a given period of time.
True
False
If we see that nominal GDP has increased, then we can say that production has increased.
True
False
Economists DON'T use Nominal GDP and Real GDP:
as a measure of living standards in a given region.
as an indicator of macroeconomic growth.
to encourage capitalism.
to measure production levels in a given region.
Economists DON'T use Nominal GDP and Real GDP:
as a measure of living standards in a given region.
as an indicator of macroeconomic growth.
to influence the stock market.
to measure production levels in a given region.
If we see that the sale of human kidneys changes, we can say that this will have what impact on GDP?
GDP will decrease.
We need to know whether the sale of kidneys increases or decreases to determine what impact it will have on GDP.
GDP will increase.
There will be no change in GDP.
if the government passes a law that requires 1 year paid parental leave, we should expect this to have what impact on the measure of GDP?
GDP will decrease
GDP will increase
We can not say from the information given
GDP will not change
Use the table above. The base year is 1990. What is nominal GDP in 1990?
(a)
