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According to the circular flow diagram, households are _____ in the market for goods and services and are _____ in the market for factors of production.buyers: buyers sellers: buyers sellers: sellers buyers: sellers 2.In 2002 you earned $42,000 and the CPI had a value of 192. In 2010 you earned $52,500 and the CPI had a value of 219. Between the two years the inflation rate was _____%. Your nominal income increased by _____% and your real income increased by _____%.Round your answers to the nearest whole number.3. The equilibrium price and quantity of a good have both decreased. Which of the following is a valid explanation?demand increased supply increased demand decreased supply decreased 27989573356004. A Chinese restaurant buys 90 cups of rice for a total of $10; they buy soy, fish and oyster sauces for a total of $20; they buy assorted vegetables for $40. They create 65 meals with these ingredients and sell each one for $8. How much does this process contribute to GDP? 5. In the market for two-bedroom apartments, the price of houses has increased. You would expect the equilibrium price of apartments to _____ and the equilibrium quantity sold to ____.increase: decrease increase: increase decrease: decrease decrease: increase 6. Twenty pounds of fish purchased by Bob's Fish Shack (a local restaurant) to make fish and chips is best described asa financial good. a used good. an intermediate good. a final good.7.All else the same, as the baby boom generation (born 1946 - 1964) enters retirement age, the natural rate of unemployment will declineTrue False8. Vietnam and Thailand both produce bicycles and sweaters. In Vietnam each worker in a day can produce either 5 bicycles or 20 sweaters. In Thailand each worker in a day can produce either 10 bicycles of 30 sweaters. Each country has constant opportunity cost of production and each has 100 workers.The two countries decide to completely specialize and then engage in trade. With specialization Vietnam will produce _____ bicycles and _____ sweaters, and Thailand will produce _____ bicycles and _____ sweaters.The two countries decide to trade 100 bicycles in exchange for 350 sweaters. After trade Vietnam will consume _____ bicycles and _____ sweaters, and country Y will consume _____ bicycles and _____ sweaters.left5829309. Firm B produces 200 bicycles at a cost of $300 each. Firm B sells 150 bicycles to consumers for $500 each. They do not sell the remaining bicycles in this time period. What is the contribution to GDP? Enter a whole number. 10. Consider the production possibilities frontier for a country that produces two goods (tons of good X and tons of good Y) as given by the information in the table below:Good X(tons)Good Y(tons)04001003502002003000Based on the information in the table, the opportunity cost of producing one more unit of good X is _____ and the opportunity cost of producing one more unit of good Y is _____.constant: increasing increasing: increasing constant: decreasing constant: constant11. A person has the following items on their balance sheet:Student loan $12,000Car $8,500Checking deposits $8,500Credit card debt $5,000Savings deposits $10,000Cash $550What is the value of this person's wealth? Enter a whole number._____ 12. Three goods are produced and consumed in an economy during years 1 and 2. The table shows prices (P1 and P2) for each good and the quantities produced (Q1 and Q2) for each good. The base year is year 1.GoodP1Q1P2Q2Milk(gallons)$440$4.4045Chicken(pounds)$220$2.5025Onions(bags)$510$4.8015Enter numbers rounded to the nearest whole number in each blank. Nominal GDP in year 1 is $_____ and nominal GDP in year 2 is $_____. Real GDP in year 1 is $_____ and real GDP in year 2 is $_____.Based on the GDP deflator method, the inflation rate is _____%.13. Suppose that in two months’ time the minimum wage is set to increase by $1 per hour. This is likely tobenefit some workers who are presently earning the minimum wage. benefit all workers who are presently earning the minimum wage. cause a reduction in unemployment. have no effect on unemployment.14. Gabriela has hired a worker to stand on the corner and wave a sign advertising her business. It costs her $12 per hour to have this worker stand on the corner. Gabriela is trying to decide how many hours per day she should hire this worker to stand on the corner. Each customer spends an average of $5 when they visit her store. She has been tracking her daily customers as a function of the number of hours per day the worker waves the sign and has found the following information:HOURSPER DAYTOTAL CUSTOMERS040145249352454555The marginal cost of having the worker stand on the corner for one hour is $ _____ The marginal benefit of having the worker stand on the corner for one hour is $ _____ Gabriela's best choice is to hire this worker for _____ hours assuming her goal is to maximize profit. Gabriela's best choice is to hire this worker for _____ hours assuming her goal is to maximize revenue.15. Jane earned $80,000 at her job 10 years ago and today she earns $100,000. If the inflation rate across the 10-year period was higher than _____ then Jane's purchasing power fell.10 25 12 2016. In an eight-hour day Nicolas can catch 24 pounds of fish or he can repair 15 cars. In an eight-hour day Alejandro can catch 27 pounds of fish or he can repair 18 cars. Nicolas's opportunity cost of repairing one car is _____ pounds of fish.Alejandro's opportunity cost of repairing one car is _____ pounds of fish.Please enter a number, rounded to 2 decimal places as necessary and do not use fractions.17. A country aims to double real GDP per capita in the next 7 years. This means that on average real GDP per capita must grow at ____ per year.2% 10% 7% 4%18. Which of the following would shift the demand curve for laptop computers to the right?A rising number of students decide that tablets like the iPad are a good substitute for a laptop.A reduction in the cost of producing computers causes firms to reduce the price of a laptop.A string of lawsuits forces one of the biggest producers of laptops out of the laptop market.All college students are now required to own a laptop computer19. At the end of the year, Ford realizes it has overproduced Fiestas because 2,500 of them are left unsold. How do we account for the 2,500 leftover cars?The unsold cars are not counted in GDP until they are sold. The cars are considered inventory and their value will increase the investment spending category of GDP this year.The cars are considered durable goods, and their value will increase the consumption spending category of GDP this year.20. Which of the following is a normative statement?An increase in the number of people immigrating to a country will shift the production possibilities frontier outward.The government should decrease income tax rates so people will have more disposable income.An increase in the minimum wage will reduce the number of teenagers who are employed.A law that requires gas to sell for less than $2 per gallon is likely to create shortages. 21. There are 118 unemployed people and 1074 employed people. What is the unemployment rate? Enter a number (measured in percentage terms) rounded to two decimal places. Do not enter a % sign. 22. Bob makes $80,000 per year. If the price index changes from 132 to 142.56 then the inflation rate is equal to ____ and his employer should give him a raise equal to ____ in order to keep his real wage constant.10.56%: $8,448 4%: $3,200 8%: $6,400 7.4%: $5,925.9323. According to the Bureau of Labor Statistics, you are considered to be unemployed if you have no job.True False24. Two goods (A and B) are complements if an increase in the price of good A causes:a decrease the supply of good B. an increase the supply of good B. a decrease the demand for good B. an increase the demand for good B. 25. John B. Retired owns a house on a 10-acre lot filled with peach trees. Each year he hires a few workers to pick the peaches and he sells them to Betty’s Pies for $7,500. Betty uses the peaches to makes pies that she sells for $10,000 to local restaurants. The local restaurants sell the pies (by the slice) to consumers for $14000.As a result of these transactions GDP increases by $______.The value added by John is $_____.The value added by Betty is $_____.The value added by the local restaurants is $_____.26. In the market for pizza, five new restaurants open. You would expect the equilibrium price to _____ and the equilibrium quantity sold to ____.decrease: decrease decrease: increase increase: decrease increase: increase27. Suppose the number of workers who are allowed to legally immigrate into the country to perform seasonal work has doubled. Wages in the affected industries are likely to _____ due to a shift of the labor ______ curve.increase: supply increase: demand decrease: demand decrease: supply28. In 2015, the Bureau of Labor Statistics (BLS) announced that of all adult Americans, 165.32 million were employed, 32.31 million were unemployed, and 51.61 million were not in the labor force. The adult population is how many million? Rounded to the nearest whole number. 29. Three goods are consumed in an economy during years 1 and 2. The table shows prices (P1 and P2) for each good, and it shows the market basket that is used to calculate the consumer price index. The base year is year 1.GoodP1P2BasketMilk(gallons)$4$4.2012Chicken(pounds)$2$2.2020Carrots(bags)$3$3.605Enter numbers in each blank, rounded to two decimal places as necessary.?The cost of the basket in year 1 is $_____The cost of the basket in year 2 is $_____The value of the CPI in year 1 is _____ The value of the CPI in year 2 is _____The overall inflation rate is _____%.30. Congress passes a law that requires employers to provide health benefits to workers. Suppose this law results in a $3 per hour increase in the cost of hiring workers. The law is likely to ____ the demand for labor and _____ the equilibrium wage paid to workers.decrease: decrease decrease: increase increase: increase increase: decrease31. Which counts in the investment category of GDP?i. Firm X buys a new computer for the officeii. John buys a newly constructed houseiii. A restaurant buys some fish to create a special menu itemiv. Bill takes $5,000 from his savings account and buys stock in Firm Ball of these i i and ii i, ii, and iii 32. Consider the following information about Ricardo and Fred’s production possibilities:Ricardo's washed carsRicardo's waxed carsFred's washed carsFred's waxed cars0200851546101084155122200160The table identifies the different combinations of cars that can be washed or waxed in a day for each person. Based on the information given, ____ has an absolute advantage in washing cars and _____ has a comparative advantage in washing cars.Ricardo: Ricardo Ricardo: Fred Fred: Fred Fred: Ricardo33.Countries with unemployment insurance programs are likely to have higher levels of frictional unemployment.True False 34. The official unemployment rate does not include discouraged workersTrue False35. Assume the growth rate of real GDP falls from 4% to 2%. This means thatthe economy is in a recession. the price level is falling. the level of production is growing more slowly. the level or production has fallen. 36. Suppose you observe that the price of ice cream has gone up. Which of the following would not be a valid explanation of the increase in the price of ice cream?milk prices have increased there are fewer ice cream stores in the area it is summer time a popular new diet claims ice cream is bad for you37. At an annual growth rate of 5% it will take _____years for a country’s GDP to double. If GDP starts at a value of $5 billion, then in 56 years we would expect the value of GDP to be _____times larger. Enter whole numbers.38. There are 207 unemployed people, 1217 employed people, and the adult population is 1824. What is the labor force participation rate? Enter a number (measured in percentage terms) rounded to two decimal places. Do not enter a % sign.______. 39. Consider the production possibilities frontier below. Which points are efficient?left8890B, C, and D A, B, and C B and C A40. The labor force is made up of all people who are at least 16 years old and are capable of working.True False41. If GDP has a value of $18.39 trillion and the population is 323.96 million then what is the value of GDP per capita. Round your answer to the nearest whole number. 42. Jonas can produce 50 pounds of meat or 100 pounds of potatoes in a given amount of time. Amelia can produce 60 pounds of meat or 240 pounds of potatoes in the same given amount of time. Amelia has a comparative advantage in producing:meat both goods neither good potatoes43. In 1998 a dozen eggs sold for $1.20 and the price index was 162. In 2018 a dozen eggs sold for $1.77 and the price index was 247. Based on this information, the nominal price of the eggs was lower in _____ and the real price of the eggs was lower in _____.2018: 2018 2018: 1998 1998: 1998 1998: 201844. Which of the following is an example of an explicit cost?the 8 hours of sleep you had last night the 5 hours of work you gave up so you could study for an exam the $100 you paid for your textbook the 2 hours of sleep you gave up when you got up early to go to the gym45. You have been offered a job in Tampa making $52921 per year. The CPI in Tampa is 106. You have been offered a job in San Francisco and are in negotiations over the salary. The CPI in San Francisco is 165. If all that matters is the money, how much do you have to make in San Francisco to be indifferent between the two locations? Enter a number rounded to two decimal places. Do not enter a dollar sign.46. Maria needs to buy a new computer. Store A has the computer advertised for $1,000 while Store B has the computer advertised for $900. It takes twice as long to get to store B as it does to get to Store A. Maria shouldbuy from the cheaper store as long as he can do it on a weekend and avoid taking time off of work.buy the computer at Store B because it is cheaper. buy the computer at Store A because it is closer. factor in the cost of his time when making the decision about which store to buy from. 47. Nominal GDP increased from $12.5 trillion in 2005 to $14 trillion in 2009. This means that:people in the U.S. produced more goods and services in 2009 than in 2005. Either of these could be true. the prices of all goods and services were higher in 2009 than in 2005. Both of these must be true.48. Martin and Pam need to repair a fence that runs around their 10-acre farm and one of them will be reducing their weekly work hours in order to complete the project. Martin can repair ? of a foot of fence per hour. Pam can repair 2 feet of fence in two hours. Martin makes $10 per hour at work. Pam makes $25 per hour at work. In this case _____ has the lower opportunity cost of repairing fence and therefore _____ should take the time off and complete the project.Martin: Pam Pam: Martin Pam: Pam Martin: Martin 49. In the T-Account, assets (credits) are recorded on the right side and liabilities (debits) are recorded on the left side.True False50.YearConsumer Price Index (CPI)Real Value of the bonus paymentCost of Living Adjusted Payment2010100$2,500$2,5002011108????2012115????An individual receives a bonus of $2,500 per year for each of three years. Calculate the real value of the bonus payment in 2011 and 2012 (measured in base year dollars), and the cost of living adjusted payment in 2011 and 2012.The real value is $_____ in 2011 and $_____ in 2012.The cost of living adjusted payment is $_____ in 2011 and $_____ in 2012. 51. Jonas can produce 50 pounds of meat or 100 pounds of potatoes in a given amount of time. Amelia can produce 60 pounds of meat or 240 pounds of potatoes in the same given amount of time. If Amelia and Jonas decide to engage in specialization and exchange, then we can expect 1 pound of meat to sell for:2 pounds of potatoes 5 pounds of potatoes 3 pounds of potatoes 4 pounds of potatoes 52. In an eight-hour day Nicolas can catch 24 pounds of fish or he can repair 15 cars. In an eight-hour day Alejandro can catch 27 pounds of fish or he can repair 18 cars. If both men decide to follow their comparative advantage, then Nicolas will gain from trade if he can sell 100 units of the good, he is specializing in for at least ____ units of the other good. Enter a number rounded to 2 decimal places as necessary.______.53. Which counts in the consumption category of GDP?i. Jane goes to Old Navy and buys a t-shirt produced in Vietnamii. John visits the doctor and pays $100iii. Bill buys a textbook from a friend who took the class the previous semesteriv. Bob saves $100 from his last paycheckii i and ii i, ii, and iv all of these54. Which counts in the government spending category of GDP?i. City J pays $2 million for garbage serviceii. The federal government pays $2 million in social security paymentsiii. A state government pays $2 million to unemployed workersiv. The federal government paid $2 million to build a new roadi, iii, and iv iv all of these i and iv55. There are 210 unemployed people and 2074 employed people. What is the unemployment rate? Enter a number (measured in percentage terms) rounded to the nearest whole number. Do not enter a % sign._____. 56. Congress passes legislation that increases the federal minimum wage from $7.25 to $9.00. For firms that hire large quantities of unskilled labor this can be expected to cause ____ in the price of the goods and services they sell due to a shift of the __________ curve.an increase: supply a decrease: supply an increase: demand a decrease: demand57. The table shows the salary an individual earns in given years and the CPI value for that year.YearSalaryCPI1969$20,52046.7197943,26572.6198985,529124.0199995,250166.62009120,844214.5The salary earned?by the worker in 1969 is equivalent to $_____in 1999 dollars? Enter a whole number.Was the worker better off in 1969 or 1999? Enter one of the years _____ ................
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