Macroeconomics Exam 1

In a command economy, the __________ either makes most economic decisions itself or at least strongly influences how the decisions are made.

Economic models like the _____________________ are not physical models, but instead are diagrams or graphs or even mathematical equations that represent economic patterns or theories.

If macroeconomics looks at the economy as a whole, it focuses on which of the following?

In countries like _____________ the command economy predominates.

In the ______________, households receive goods and services and pay firms for them.

In the first chapter of The Wealth of Nations, Smith introduces the idea of the __________, which means the way in which the work required to produce a good or service is divided into a number of tasks that are performed by different workers.

The basic difference between macroeconomics and microeconomics is that:

The circular flow diagram of economic activity is a model of the:

Which of the following statements most likely lies within the realm of macroeconomics?

Which of the following is most likely a topic of discussion in macroeconomics?

Which of the following best describes a monetary policy tool?

Which of the following best characterizes the circular flow of income?

Which of the following best describes a fiscal policy tool?

In a market-oriented economy, the amount of a good that is produced is primarily decided by the interaction of:

In a _______________________, most economic decisions about what to produce, how to produce it, and for whom to produce it are made by buyers and sellers.

In the circular flow diagram model:

Macroeconomics:

_____________ a term referring to the fact that for many goods, as the level of production increases, the average cost of producing each individual unit declines.

"If I didn't have class tonight, I would save the $4 campus parking fee and spend four hours at work where I earn $10 per hour." The opportunity cost of attending class this evening is:

Attending college is a case where the ________________ exceeds the monetary cost.

Economists refer to this pattern, the ___________________________________, which means that as a person receives more of a good, the additional or marginal utility from each additional unit of the good declines.

Gomer decides to spend an hour playing basketball rather than studying. His opportunity cost is:

Most choices involve _________________, which involves comparing the benefits and costs of choosing a little more or a little less of a good.

Philosophers draw a distinction between ___________________, which describe the world as it is, and normative statements, which describe how the world should be.

Refer to Figure 2-1. Along the production possibilities frontier, the most efficient point of production depicted is: (WINE AND BREAD)

Refer to Figure 2-2. When the economy moves from Point A to Point B in the diagram below: (CLOTHING AND FOOD)

Referring to Table 2-1: A student has only a few hours to prepare for two different exams this afternoon. The table below shows alternative possible exam scores with three alternative uses of the student's time. The opportunity cost of scoring a 94 on the economics exam rather than a 77 is:

Scarcity exists because of:

The law of ____________________________ explains why people and societies rarely make all-or-nothing choices.

Why is there scarcity?

The slope of the _________________ is determined by the relative price of the two goods, which is calculated by taking the price of one good and dividing it by the price of the other good.

The opportunity cost of an action:

The model that economists use for illustrating the process of individual choice in a situation of scarcity is the _________________, sometimes also called the opportunity set, a diagram which shows what choices are possible.

The lesson of __________ is to forget about the money that's irretrievably gone and instead to focus on the marginal costs and benefits of future options.

The leader of a federal political party made the following campaign promise: "My administration will increase national defense without requiring sacrifices elsewhere in the economy." The promise can be kept if:

The marginal benefit of a slice of pizza is the:

The opportunity cost of attending university is likely to include all except which of the following?

A change in price of a good or service typically causes ________________ for that specific good or service.

A drought decreases the supply of agricultural products, which means that at any given price a lower quantity will be supplied; conversely, especially good weather would shift the _________________________.

A supply curve is a graphical illustration of the relationship between price, shown on the vertical axis, and _________________, shown on the horizontal axis.

After widespread press reports about the dangers of contracting "mad cow disease" by consuming beef from Canada, the likely economic effect on the U.S. demand curve for beef from Canada is:

Any given demand or supply curve is based on the ceteris paribus assumption that _________________________.

But nearly all supply curves share a basic similarity: they slope ________________.

Economists refer to the relationship that a higher price leads to a lower quantity demanded as the _____________________.

If an increase in the price of Good X causes a decrease in the demand for Good Y, we can conclude that:

If the price is below the equilibrium level, then the quantity demanded will exceed the quantity supplied. This is known as ________________.

In economics, the demand for a good refers to the amount of the good that people:

Refer to Figure 3-2. A change from Point A to Point B represents a(n): (PRICE AND QUANTITY)

Refer to Figure 3-1. Using the graph below and beginning on D1, a shift to D2 would indicate a(n): (PRICE AND QUANTITY)

Refer to Figure 3-3. A change from Point A to Point B represents a(n): (PRICE AND QUANTITY)

___________________ are enacted when discontented sellers, feeling that prices are too low, appeal to legislators to keep prices from falling.

Which of the following would reduce the supply of microcomputers?

When __________________, a firm will supply a higher quantity at any given price for its output, and the supply curve will shift to the right.

The downward slope of the demand curve again illustrates the pattern that as _____________ rises, ______________ decreases.

The demand curve for a typical good has a(n):

The _________ is the only price where quantity demanded is equal to quantity supplied.

The _______________ is the quantity where quantity demanded and quantity supplied are equal at a certain price.