ECON 2400 Study Guide - Midterm Guide: Consumption Function, Autarky, Durable Good
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Suppose that, instead of taking this test, you could either have worked and earned income or partied and had a pleasurable time. Your opportunity cost of taking the test is the
a. | forgone working or partying, depending on which was your next best choice. | |
b. | forgone work. | |
c. | forgone working and partying. | |
d. | test because you are taking it. |
1 points
QUESTION 2
A trend is
a. | a measure of closeness on a scatter diagram. | |
b. | a general tendency for a variable to rise or fall. | |
c. | the maximum value of a variable. | |
d. | the difference between the maximum value of a variable and the minimum value of the variable. |
1 points
QUESTION 3
A time-series graph measures
a. | time on the y-axis and the variable or variables in which we are interested on the x-axis. | |
b. | time on the x-axis and the variable or variables in which we are interested on the y-axis. | |
c. | the value of one variable against the value of another variable. | |
d. | the value of an economic variable for different groups in a population at a point in time. |
1 points
QUESTION 4
Canada has nationalized health care, so that everyone, regardless of their ability to pay, has some access to health care. Based on this observation, Canada has decided that "everyone, regardless of their ability to pay" is the answer to what microeconomic question?
a. | Why will we offer health care? | |
b. | How will health care be produced? | |
c. | For whom will health care be produced? | |
d. | What type of health care will be produced and in what quantity? |
1 points
QUESTION 5
As a shoe factory adds more workers, shoe production grows, reaches a maximum, and then shrinks. In a diagram that has the number of workers on the horizontal axis and the number of shoes on the vertical axis, the relationship between the number of workers and the number of shoes starts as ________ and then, after the maximum point, is ________.
a. | positive; negative | |
b. | negative; positive | |
c. | linear; negative | |
d. | positive; linear |
1 points
QUESTION 6
Microeconomics includes the study of the
a. | choices made by individuals and businesses. | |
b. | recessions and inflation in the global economy. | |
c. | aggregate effects on the national economy. | |
d. | reasons why the government changes interest rates. |
1 points
QUESTION 7
When Fresh Express Salads decides to mechanically pick all of its lettuce, it directly answers the ________ question.
a. | when | |
b. | for whom | |
c. | how | |
d. | what |
1 points
QUESTION 8
Proponents of cuts in income tax rates argue that when income tax rates are cut, workers have an incentive to increase their work hours. This argument is based on the assumption that
a. | the opportunity cost of working is negative. | |
b. | the marginal cost of each additional work hour is not important to most workers. | |
c. | workers are irrational. | |
d. | workers make decisions based on the marginal benefit of each hour worked compared to the marginal cost of work. |
1 points
QUESTION 9
A choice made by comparing all relevant alternatives systematically and incrementally is
a. | an opportunity cost. | |
b. | a benefit. | |
c. | a sunk cost. | |
d. | a choice on the margin. |
1 points
QUESTION 10
A normative statement
i. can be tested as to whether it is true or false.
ii. is considered negative.
iii. depends on a person's values.
a. | i, ii, and iii | |
b. | iii only | |
c. | i and iii | |
d. | ii and iii |
1 points
QUESTION 11
Normative statements
i. describe how the world is.
ii. describe how the world ought to be.
iii. depend on people's values and cannot be tested.
a. | iii only. | |
b. | i only. | |
c. | ii and iii. | |
d. | ii only. |
1 points
QUESTION 12
In order to determine whether to major in economics, a rational individual compares the ________ of the decision.
a. | positive benefits and normative costs | |
b. | normative benefits and positive costs | |
c. | marginal benefit and marginal cost | |
d. | opportunity cost and the sunk cost |
1 points
QUESTION 13
If x increases whenever y decreases, then x and y are
a. | positively related. | |
b. | negatively related. | |
c. | not related. | |
d. | related but whether positively or negatively related depends on whether the x variable or the y variable is plotted on the vertical axis. |
1 points
QUESTION 14
Rational choice
a. | is what you must give up get what you want. | |
b. | is made by comparing different incentives. | |
c. | making the choice. | |
d. | provides the answer to only the "how" question. |
1 points
QUESTION 15
Scarcity results from the fact that
a. | choices made in self-interest rare not always in the social interest. | |
b. | not all goals are desirable. | |
c. | people's wants exceed the resources available to satisfy them | |
d. | we cannot answer the major economic questions. |
1 points
QUESTION 16
When Delta decides to quit flying to Lithuania, it directly answers the ________ question.
a. | what | |
b. | why | |
c. | for whom | |
d. | how |
1 points
QUESTION 17
A normative statement
a. | says what is currently believed about the way the world operates. | |
b. | depends on someone's values. | |
c. | cannot use the word "should." | |
d. | must be tested to determine if it is correct. |
1 points
QUESTION 18
Which of the following statements best describes the study of economics? Economics studies how
a. | to organize production so that scarcity does not occur. | |
b. | to create incentives so that scarcity does not exist. | |
c. | firms make profits. | |
d. | we make choices in the face of scarcity. |
1 points
QUESTION 19
Which of the following best defines economics?
a. | Economics teaches how to limit our wants. | |
b. | Economics is concerned with prices and quantities of goods and services, both at the individual level and at the industry level. | |
c. | Economics helps you earn as much money as possible. | |
d. | Economics studies how to choose the best alternative when coping with scarcity. |
1 points
QUESTION 20
In economics, cost is ________, and benefit is ________.
a. | the amount of money that you pay for something; the amount of money that someone else is willing to pay you | |
b. | what you are willing to pay on the margin; what the government pays you when you are unemployed or retired | |
c. | what you must give up to get something; what you are willing to give up to get it | |
d. | the amount of money that you pay on the margin; the amount of money that you receive on the margin |
1 points
QUESTION 21
If Jessie studies economics for two hours instead of going to the movies with her friends, then
a. | the opportunity cost of studying is the missed movie. | |
b. | Jessie is ignoring a sunk cost | |
c. | Jessie is not responding to any incentives. | |
d. | Jesse definitely is making a rational choice. |
1 points
QUESTION 22
Going skiing will cost Adam $80 a day. He also loses $40 per day in wages because he has to take time off from work. Adam still decides to go skiing.
a. | The $80 price of skiing is a sunk cost and so did not affect Adam's decision. | |
b. | He loses a total of $120 per day, so his decision is irrational. | |
c. | His decision is rational if Adam's marginal benefit of spending a day skiing is greater than his marginal cost. | |
d. | Adam's lost $40 per day in wages is a sunk cost and so did not affect his decision. |
1 points
QUESTION 23
If a curve falls and then rises, it
a. | has a maximum. | |
b. | has a linear relationship. | |
c. | has a minimum. | |
d. | has a constant slope relationship. |
1 points
QUESTION 24
In 2003, Michael Jordan decided to retire from professional basketball. Which of the following was an opportunity cost of his decision?
a. | the avoidance of pain and injury from playing one more year | |
b. | the time he could spend with his family while retired | |
c. | the lost salary from playing one more year | |
d. | the value of new employment opportunities that would await him |
1 points
QUESTION 25
Which of the following statements is a normative statement?
a. | Military spending as a percent of government spending decreased by 5 percent in the 1990s. | |
b. | Every American household should have health care insurance coverage. | |
c. | Welfare reform has decreased the amount the government spends on welfare. | |
d. | The price of computers fell last year. |
QUESTION 1
Rosina Gonzales quit her job in Pennsylvania and moved to California to be close to her family. She is currently looking for work, so she would be considered
frictionally unemployed. | ||
cyclically unemployed. | ||
a discouraged worker. | ||
seasonally unemployed. |
1 points
QUESTION 2
Discouraged workers
are counted as unemployed workers when the unemployment rate is calculated. | ||
would decrease the unemployment rate if they were added to the number of unemployed workers. | ||
are counted as one-half of a worker in the unemployment statistics. | ||
would increase unemployment rate if they were added to the number of unemployed workers. |
1 points
QUESTION 3
In measuring the unemployment rate, part-time workers are ________ and discouraged workers are ________.
included as employed; included as unemployed | ||
excluded; excluded | ||
excluded; included as unemployed | ||
included as employed; excluded |
1 points
QUESTION 4
Mary has decided that the she does not like Iowa and has decided to quit her job as a medical technician and move to Arizona. Mary's unemployment as she searches for a new job is best classified as
frictional. | ||
cyclical. | ||
structural. | ||
seasonal. |
1 points
QUESTION 5
When a golf caddy in Minnesota (where golf courses close in the winter) is unemployed in December, it is most likely the case that the golf caddy is
cyclically unemployed during long droughts. | ||
frictionally unemployed during spring and summer. | ||
structurally unemployed during spring and summer. | ||
seasonally unemployed. |
1 points
QUESTION 6
After graduating from college, Yunis, age 22, started working for his parent's real estate business as an unpaid assistant. He works 25 hours a week helping manage rental units . In the Current Population Survey, Yunis is considered
part of the labor force and employed. | ||
part of the labor force and unemployed. | ||
a discouraged worker. | ||
not part of the labor force. |
1 points
QUESTION 7
The working-age population includes
youngsters between the ages of 14 and 16 if they are working at least part time. | ||
only employed people over the age of 16. | ||
those in jails and hospitals. | ||
employed and unemployed people over the age of 16. |
1 points
QUESTION 8
Involuntary part-time workers are workers who
work less than 35 hours but would like to work full time. | ||
work more than 35 hours but would like to work less than 35 hours. | ||
work less than 35 hours by choice. | ||
work have lost their jobs within the last four weeks and are seeking another job. |
1 points
QUESTION 9
Frictional unemployment is the result of
the normal process of jobs being created and destroyed. | ||
an economic recession. | ||
people not getting along (having friction) with their employers. | ||
the economic decline of major industries |
1 points
QUESTION 10
Bill just graduated with his degree in economics. Through Career Services he submitted his resume to several companies and he will visit them during the next two weeks. Bill is considered
not in the labor force. | ||
cyclically unemployed. | ||
frictionally unemployed. | ||
structurally unemployed. |
1 points
QUESTION 11
Harry works at the video rental store for 20 hours per week. He's asked his boss to allow him to work 40 hours per week, but has been told that business is too slow. Harry is considered
an involuntary part-time worker. | ||
a marginally attached worker. | ||
a discouraged worker. | ||
not in the labor force. |
1 points
QUESTION 12
Discouraged workers who are over 16 years old are
i.not counted as unemployed.
ii.part of the working-age population.
iii.part of the labor force.
i and ii | ||
ii and iii | ||
ii only | ||
i only |
1 points
QUESTION 13
Higher unemployment benefits create
higher seasonal unemployment as workers switch jobs. | ||
a lower number of job leavers. | ||
incentives for longer job searches and higher frictional unemployment. | ||
incentives for shorter job searches and higher structural unemployment. |
1 points
QUESTION 14
Seasonal unemployment includes people who become unemployed from
changes in the business cycle. | ||
technological changes. | ||
the seasonal weather patterns. | ||
normal changes in the labor force. |
1 points
QUESTION 15
Cyclical unemployment is
higher when the economy is expanding. | ||
always greater than the total of structural and frictional unemployment. | ||
the total of structural and frictional unemployment. | ||
created by a recession. |
1 points
QUESTION 16
Which of the following people would be classified as employed in the Current Population Survey?
April, who just graduated from college and is looking for work | ||
Jason, who was laid off from work less than 6 months ago but who has stopped looking for work | ||
Rich, who is working 20 hours a week but wants a full-time job | ||
Misty, who just quit her job to return full time to school |
1 points
QUESTION 17
People who are willing and able to work but are not looking for work because they have been discouraged by their previous futile efforts are called
discouraged workers. | ||
involuntarily unemployed. | ||
part-time lookers. | ||
unemployed workers. |
1 points
QUESTION 18
Discouraged workers are included in the calculation of the
i.unemployment rate.
ii.labor force participation rate.
iii.working-age population.
i and ii | ||
i only | ||
iii only | ||
ii only |
1 points
QUESTION 19
As firms search for the best employee to fill an opening and the unemployed search for the job that best fits their skills, the economy experiences
changes in the business cycle. | ||
cyclical unemployment. | ||
frictional unemployment. | ||
structural unemployment. |
1 points
QUESTION 20
Suppose the U.S. population is 275 million. If 210 million people are of working age, 135 million are employed, and 6 million are unemployed, what is the labor force participation rate?
64 percent | ||
67 percent | ||
76 percent | ||
49 percent |
1 points
QUESTION 21
During a recession the unemployment rate generally ________ and during an expansion the unemployment rate generally ________.
rises; rises | ||
rises; does not change | ||
falls; rises | ||
rises; falls |
1 points
QUESTION 22
In January of 2001, the population of the United States was 276.8 million, the working-age population was 210.2 million, the total number of people employed was 140, and the total number of people unemployed was 5.0 million. What was the labor force participation rate?
56 percent | ||
69 percent | ||
78 percent | ||
67 percent |
1 points
QUESTION 23
If Brian, age 24, had no job but was available for work and had looked for a job the week before the survey, Brian is classified in the Current Population Survey as
unemployed. | ||
employed. | ||
a discouraged worker. | ||
not in the labor force. |
1 points
QUESTION 24
Julie works part-time for economic reasons. She would be considered
an involuntary part-time worker. | ||
not in the labor force. | ||
a job seeker. | ||
a discouraged worker. |
1 points
QUESTION 25
Suppose the population is 300 million people, the labor force is 200 million people, the number of people employed is 185 million, and the working-age population is 170 million people. What is the unemployment rate?
5 percent | ||
7.5 percent | ||
8.8 percent | ||
92.5 percent |
1 points
QUESTION 1
Rosina Gonzales quit her job in Pennsylvania and moved to California to be close to her family. She is currently looking for work, so she would be considered
frictionally unemployed. | ||
cyclically unemployed. | ||
a discouraged worker. | ||
seasonally unemployed. |
1 points
QUESTION 2
Discouraged workers
are counted as unemployed workers when the unemployment rate is calculated. | ||
would decrease the unemployment rate if they were added to the number of unemployed workers. | ||
are counted as one-half of a worker in the unemployment statistics. | ||
would increase unemployment rate if they were added to the number of unemployed workers. |
1 points
QUESTION 3
In measuring the unemployment rate, part-time workers are ________ and discouraged workers are ________.
included as employed; included as unemployed | ||
excluded; excluded | ||
excluded; included as unemployed | ||
included as employed; excluded |
1 points
QUESTION 4
Mary has decided that the she does not like Iowa and has decided to quit her job as a medical technician and move to Arizona. Mary's unemployment as she searches for a new job is best classified as
frictional. | ||
cyclical. | ||
structural. | ||
seasonal. |
1 points
QUESTION 5
When a golf caddy in Minnesota (where golf courses close in the winter) is unemployed in December, it is most likely the case that the golf caddy is
cyclically unemployed during long droughts. | ||
frictionally unemployed during spring and summer. | ||
structurally unemployed during spring and summer. | ||
seasonally unemployed. |
1 points
QUESTION 6
After graduating from college, Yunis, age 22, started working for his parent's real estate business as an unpaid assistant. He works 25 hours a week helping manage rental units . In the Current Population Survey, Yunis is considered
part of the labor force and employed. | ||
part of the labor force and unemployed. | ||
a discouraged worker. | ||
not part of the labor force. |
1 points
QUESTION 7
The working-age population includes
youngsters between the ages of 14 and 16 if they are working at least part time. | ||
only employed people over the age of 16. | ||
those in jails and hospitals. | ||
employed and unemployed people over the age of 16. |
1 points
QUESTION 8
Involuntary part-time workers are workers who
work less than 35 hours but would like to work full time. | ||
work more than 35 hours but would like to work less than 35 hours. | ||
work less than 35 hours by choice. | ||
work have lost their jobs within the last four weeks and are seeking another job. |
1 points
QUESTION 9
Frictional unemployment is the result of
the normal process of jobs being created and destroyed. | ||
an economic recession. | ||
people not getting along (having friction) with their employers. | ||
the economic decline of major industries |
1 points
QUESTION 10
Bill just graduated with his degree in economics. Through Career Services he submitted his resume to several companies and he will visit them during the next two weeks. Bill is considered
not in the labor force. | ||
cyclically unemployed. | ||
frictionally unemployed. | ||
structurally unemployed. |
1 points
QUESTION 11
Harry works at the video rental store for 20 hours per week. He's asked his boss to allow him to work 40 hours per week, but has been told that business is too slow. Harry is considered
an involuntary part-time worker. | ||
a marginally attached worker. | ||
a discouraged worker. | ||
not in the labor force. |
1 points
QUESTION 12
Discouraged workers who are over 16 years old are
i.not counted as unemployed.
ii.part of the working-age population.
iii.part of the labor force.
i and ii | ||
ii and iii | ||
ii only | ||
i only |
1 points
QUESTION 13
Higher unemployment benefits create
higher seasonal unemployment as workers switch jobs. | ||
a lower number of job leavers. | ||
incentives for longer job searches and higher frictional unemployment. | ||
incentives for shorter job searches and higher structural unemployment. |
1 points
QUESTION 14
Seasonal unemployment includes people who become unemployed from
changes in the business cycle. | ||
technological changes. | ||
the seasonal weather patterns. | ||
normal changes in the labor force. |
1 points
QUESTION 15
Cyclical unemployment is
higher when the economy is expanding. | ||
always greater than the total of structural and frictional unemployment. | ||
the total of structural and frictional unemployment. | ||
created by a recession. |
1 points
QUESTION 16
Which of the following people would be classified as employed in the Current Population Survey?
April, who just graduated from college and is looking for work | ||
Jason, who was laid off from work less than 6 months ago but who has stopped looking for work | ||
Rich, who is working 20 hours a week but wants a full-time job | ||
Misty, who just quit her job to return full time to school |
1 points
QUESTION 17
People who are willing and able to work but are not looking for work because they have been discouraged by their previous futile efforts are called
discouraged workers. | ||
involuntarily unemployed. | ||
part-time lookers. | ||
unemployed workers. |
1 points
QUESTION 18
Discouraged workers are included in the calculation of the
i.unemployment rate.
ii.labor force participation rate.
iii.working-age population.
i and ii | ||
i only | ||
iii only | ||
ii only |
1 points
QUESTION 19
As firms search for the best employee to fill an opening and the unemployed search for the job that best fits their skills, the economy experiences
changes in the business cycle. | ||
cyclical unemployment. | ||
frictional unemployment. | ||
structural unemployment. |
1 points
QUESTION 20
Suppose the U.S. population is 275 million. If 210 million people are of working age, 135 million are employed, and 6 million are unemployed, what is the labor force participation rate?
64 percent | ||
67 percent | ||
76 percent | ||
49 percent |
1 points
QUESTION 21
During a recession the unemployment rate generally ________ and during an expansion the unemployment rate generally ________.
rises; rises | ||
rises; does not change | ||
falls; rises | ||
rises; falls |
1 points
QUESTION 22
In January of 2001, the population of the United States was 276.8 million, the working-age population was 210.2 million, the total number of people employed was 140, and the total number of people unemployed was 5.0 million. What was the labor force participation rate?
56 percent | ||
69 percent | ||
78 percent | ||
67 percent |
1 points
QUESTION 23
If Brian, age 24, had no job but was available for work and had looked for a job the week before the survey, Brian is classified in the Current Population Survey as
unemployed. | ||
employed. | ||
a discouraged worker. | ||
not in the labor force. |
1 points
QUESTION 24
Julie works part-time for economic reasons. She would be considered
an involuntary part-time worker. | ||
not in the labor force. | ||
a job seeker. | ||
a discouraged worker. |
1 points
QUESTION 25
Suppose the population is 300 million people, the labor force is 200 million people, the number of people employed is 185 million, and the working-age population is 170 million people. What is the unemployment rate?
5 percent | ||
7.5 percent | ||
8.8 percent | ||
92.5 percent |
1 points