ECON 22060 Chapter Notes - Chapter 5: Economic Efficiency, Market Failure, Macroeconomics
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21. The English word that comes from the Greek word for "one who manages a household" is
A- market
B- consumer
C- producer
D- economy
B- should be counted only to the extent that they are more expensive at college than elsewhere. C- usually exceed the opportunity cost of going to college. D- plus the cost of tuition, equals the opportunity cost of going to college. |
B- in most economies, wealthy people consume disproportionate quantities of goods and services. C- governments restrict the production of too many goods and services. D- resources are limited. |
B- markets guiding economic activity. Today many countries that did not have this system have implemented it. C- government guiding economic activity. Today many countries that had this system have abandoned it. D- government guiding economic activity. Today many countries that did not have this system have implemented it. |
B- we should agree with Senator Johnson. C- a good decision requires that we recognize both viewpoints. D- there are no tradeoffs between equity and efficiency. |
B- it does not matter if they charge $10 or $15. C- they would do better charging $15 than $10. D- they should raise the price even more. |
B- helps to explain how the economy is organized. C- incorporates all aspects of the real economy. D- Both (a) and (b) are correct. |
B- households provide firms with labor, land, and capital. C- firms provide households with output. D- firms provide households with profit. |
B- grew rapidly, due to several increases in the minimum wage during those decades. C- grew rapidly, due to government policies that discouraged the importation of foreign products during those decades. D- grew slowly, due to the slow growth of the output of goods and services per hour of U.S. workers' time during those decades. |
Question 30. 30. For economists, statements about the world are of two types: |
A- assumptions and theories.
B- true statements and false statements.
C- specific statements and general statements.
D- positive statements and normative statements.
A. Based on the model, firms earn revenue when ______________(firms, households) purchase ___________(goods and services, labor and capital) in markets for goods and services.
B. Suppose Kate earns $800 per week working as a doctor for the Medical Clinic. She uses $9 to order a mojito cocktail at Little Havana. Little Havana pays Hubert $300 per week to wait tables. Hubert uses $175 to purchase medical services from the Medical Clinic.
a. Identify whether each of the following events in the scenario occurs in the market for factors of production or the market for goods and services.
Event | The market for Factors of Production | The market for goods and services |
Kate spends $9 to order a mojito cocktail. | Ā | Ā |
Hubert spends $175 to purchase medical services for the Medical Clinic. | Ā | Ā |
Hubert earns $300 per week working for Little Havana. | Ā | Ā |
b. Which of the elements of this scenario represent a flow from a firm to a household? This could be a flow of dollars, inputs, or output.
Ā Ā Ā Kate's labor,Ā The Mojito Kate receives,Ā The $175Hubert's spend to purchase Medical services from the Medical Clinic.
c.Ā The actual economy is more complicated than the one illustrated in the previous circular-flow diagram of a simple economy. True/False.