In: Other Topics

Submitted By Nina2013
Words 3440
Pages 14
Final exam

1) Among the fundamental concepts in economics are
A) opportunity cost.
B) marginalism.
C) efficient markets.
D) all of the above

2) Which of the following is NOT an opportunity cost of attending college?
A) the tuition you pay
B) the income you could have earned if you didn't attend college
C) the alternative uses of the time you spend studying
D) the cost of the food that you consume while you are attending college

3) A market in which profit opportunities are eliminated almost instantaneously is
A) a laissez-faire market.
B) a capitalist market.
C) a socialist market.
D) an efficient market

4) According to the theory of comparative advantage, specialization and free trade will benefit
A) only that trading party that has both an absolute advantage and a comparative advantage in the production of all goods.
B) all trading parties, even when some are absolutely more efficient producers than others.
C) only that trading party that has an absolute advantage in the production of all goods.
D) only that trading party that has a comparative advantage in the production of all goods.

5) Someone has a comparative advantage in producing a good if they can produce that good
A) in greater quantities.
B) at a lower opportunity cost.
C) using more capital and less labor.
D) without sunk costs.

Refer to the information provided in Figure 2.5 below to answer the questions that follow.

Figure 2.5

6) Refer to Figure 2.5. The economy is currently at Point A. The opportunity cost of moving from Point A to Point B is the
A) 90 LCD televisions that must be forgone to produce 20 additional plasma televisions.
B) 30 LCD televisions that must be forgone to produce 60 additional plasma televisions.
C) 120 LCD televisions that must be forgone to produce 40 additional plasma televisions.
D) 30 LCD televisions…...

Similar Documents


...9/26/2012 Lecture 1 – Introduction to Macroeconomics • Key concepts of macroeconomics Key concepts of macroeconmics • Macroeconomics is the study of the behavior of the economy as a whole. • Aggregate demand and supply What is an economy? -> Google images search: Vietnam Economy • Economy: An economy consists of the economic systems of a country, which allocate the labor, capital, and land resources for manufacturing, production, trade, distribution, and consumption of goods and services. 1 9/26/2012 • Macroeconomics: examines overal level of national income, employment, and prices of an economy. 1. National output/income: total output of an economy is Gross Domestic Product (GDP) 2. Employment: Labor force includes all employed persons and those unemployed individuals who are seeking jobs. 3. Stable prices: consumer price index (CPI), inlfation rate Why national income? • The ultimate objective of economic activity is to provide the goods and services that the population desire. e.g. shelter, foods, education, recreation • • The most comprehenshive measure of the total output in an economy is the gross domestic product (GDP). GDP is the measure of the market value of all final goods and services produced in a country during a year. Gross domestic product growth rate 12 10 8 6 4 2 0 -2 • Why some countries are rich, while others are poor? • Size of GDP? GDP growth rate? • What...

Words: 887 - Pages: 4

The Current Macroeconomic Situation

...The Current Macroeconomics Situation Recession and Depression Jennifer Pearson The Current Macroeconomic Situation Today the current macroeconomic situation in the US is troublesome abroad. The unemployment rate is 7.5% of June 2013; so the average rate ahead is about 5.7%. Instead, the inflationary rate is approximately 2.3% that is 5% less than the past average rate of 2.28%. However, the data shows the dollar buys less and less each passing day. As stated in the Trading Times, ‘’ The Gross Domestic Product (GDP) in the United States expanded 2 percent in the third quarter of 2011 over the previous quarter. I think the government need to utilize an expansionary fiscal policy, by using the money to increase the liquidity in the system. As a matter of fact, always take precaution not to over-do it because there is so much money out there that will make the dollar invaluable. Today’s current downward trend for interest rates should help tighten the economy; instead securities are hard to come by and lowering the interest rate may have minimum effect on small businesses that need capital can’t obtain a loan from a borrower. The Current Macroeconomic Situation in the United States The Federal Open Market Committee (FOMC) discussed in October 2012, that it was verified the unemployment rate seems to be declining. It was also verified that American households spending has risen slowly, but the unemployment rate seems to......

Words: 322 - Pages: 2

Macroeconomic Theory

...Macroeconomic Theory: Econ 2220 1 Math For Econ 2220 B 1 1.1 Shifts of a Curve vs. Movement along a Curve Parameter and variable y = f (x, a) (1) Suppose y is a function of x, and where a is a parameter, which represents the impact of other exogenous variables. Given a certain value of a, we can plot the function y = f (x, a) as a curve in a two-dimension graph. A change in x implies a movement along the curve, while a change in a means a shift of the curve. 1.2 An example Suppose the firm’s daily output, Y , depends on both the number of workers that the firm employs, N , and the number of machines that the firm uses, K. The relation between input and output is specified as the following, √ √ Y =2 K N (2) Output Y is a function of both the number of machines, K, and the number of workers, √ √ N . For example, if there are 100 machines and 4 workers, the output Y = 2 100 4 = 2 × 10 × 2 = 40. Now suppose we are concerned with the relation between output and the number of workers employed. That means that we hold the number of machines constant and study the relation between Y and N . Graphically, we plot Y against N , where N is on the horizontal axis. If we hold K constant at 100, the relation reduces to √ √ √ Y = 2 100 N = 20 N (3) It is shown as the solid curve in Figure 1. If the firm increases the number of workers employed from 4 to 9, the output would increase from 40 to 60. In the graph, the combination of Y and N moves along the solid curve...

Words: 2198 - Pages: 9


...MACROECONOMIC ANALYSIS ECON 545 Keller Graduate School of Management April 13, 2014 Introduction The idea Edgar has for opening up four new gas stations is based on a well based argument making it viable as a profitable business venture. The evaluation on the American consumer to accept the high price for gas oil prices forms the first approach towards establishing a business. Gasoil businesses in the world run as cartel where it supply and prices are determined by the few stakeholders in the industry. The stakeholders form an agreement among their competitors on the price, making and, marketing of the product (Fredy, 2010). The cartel though the production affects the GDP growth rate. Gross domestic product represents the monetary value of the goods produced in the country within a year. The enterprise runs as an oligopoly. An oligopoly represents a business type where there are few sellers in the market. The few sellers are due to the restriction imposed on entry to a monopoly. The production rights are restricted by the producer and the producer also controls the prices of the commodity (Brake, 2011). Unemployment will be apparent as the restriction holds down people with the relevant skills to join in the trade. Price control is done through price fixing and determining the market share. The market shares will go a long way to influencing international trade. International trade represents trade past the nation boundaries (Derik, 2010) . The main purpose of...

Words: 1229 - Pages: 5

Macroeconomic Environment

...macro environment    macro data market environment Definitions (2)Add to FlashcardsSave to FavoritesSee Examples 1. The major external and uncontrollable factors that influence an organization's decision making, and affect its performance and strategies. These factors include the economic factors; demographics; legal, political, and social conditions; technological changes; and natural forces. 2. Specific examples of macro environment influences include competitors, changes in interest rates, changes in cultural tastes, disastrous weather, or government regulations. Macroeconomic Factors and the Management Environment by Leo Sun As a new business manager, the first thing you must be in tune with is the state of microeconomics and macroeconomics. While we are trained to pay attention to the former, the latter can often catch us by surprise and sink our business instantly. Microeconomic factors are company-specific trends. These are the factors in your business that keep it afloat. Revenue, earnings and margin are the key micro factors at your company. The size of your workforce, the production volume of your products and your advertising campaigns are all micro factors as well. In short, micro factors are parts of your business that can be fine-tuned and changed by the management. Macroeconomic factors are national and global events which are out of your control. The September 11th terrorist attacks, the financial meltdown of 2008-2009 and the European sovereign debt......

Words: 344 - Pages: 2

Macroeconomic Variables

...Macroeconomic Variables MBA -502 Economics for Business The financial services industry is influenced by a vast number of variables. These variables affect the way people invest their money, how much they invest, what types of investments they choose, etc. The Principal Financial Group is not immune to these variables. Some of the macroeconomic variables that directly affect the products and services Principal offers are unemployment, inflation, government regulation, interest rates, and consumer income. Unemployment will affect the services and products that are provided by the Principal because those individuals who are not making a steady income will most likely not be customers. By the same token, customers who were employed that have become unemployed will either cease to be customers of Principal or may withdraw money from existing accounts. While these loans will be paid back with interest, they diminish the amount of money the Principal has to place that money in more lucrative investments. According to Stephen D. Simpson “… the experience of unemployment (either direct or indirect) can alter how workers plan for their futures…”. Inflation will cause the price of goods and services to rise. For the average consumer, this means that the more they spend on food, gas, housing, etc. the less money they have to spend on investments. While retirement savings are an important part of saving for the future, high inflation causes day to day living...

Words: 897 - Pages: 4

Macroeconomic Analysis

... profit by selling the homes and renting the shops. Before you can find time to answer Uncle Dan’s e-mail, you read the piece “Will the Fed’s New Policies Revitalize the Housing Market?” on page 896 of the textbook. Recognizing the costs and risks for Uncle Dan in making the switch, you decide to research the economy in terms of GDP growth rate, interest rates, level of unemployment, the business cycle, fiscal policy, monetary policy, international trade, and demographics. You decide to educate yourself about macroeconomics so that you can provide Uncle Dan with the most informed advice possible. Macroeconomic Paper as a Professional Report Your paper should be organized into five parts as listed below. 1. Title Page: Name, class, and date 2. Introduction to situation but do NOT copy the scenario. Briefly summarize the situation and identify the macroeconomic issue(s) to be decided from the perspective of the organization. 3. Business Cycles, Unemployment, Inflation, International - Comparative Advantage, Exchange Rates, Trade, Etc., Monetary Policy and Interest Rates, and Fiscal Policy and Unemployment Identify the variables that are critical in addressing the issue(s). Gather and present the relevant data on the variables by searching the DeVry Online Library. Ask a librarian for help if needed. Use in-text citation to report the source(s) of the data. Graphs may be included here. 4. Recommendations and Economic Justification...

Words: 1083 - Pages: 5

Macroeconomic Factors

...Macroeconomic factors are large scale events or trends which affect the economy (for example recession and unemployment). Macroeconomic factors affect many things and are therefore closely monitored by governments, businesses and investors. Jamaica's economy faces many challenges to growth: high crime and corruption, large-scale unemployment and underemployment, and a debt-to-GDP ratio of about 140%. Government Fiscal Policy Gross Domestic Product - GDP The Jamaican economy is heavily dependent on services, which accounts for nearly 80% of GDP. The country continues to derive most of its foreign exchange from tourism, remittances, and bauxite/alumina. Remittances and tourism each account for 30% of GDP, while bauxite/alumina exports make up roughly 5% of GDP. The bauxite/alumina sector was most affected by the global downturn while the tourism industry and remittance flow remained resilient. Debt Management The attendant debt servicing cost consumes a large portion of the government's budget, limiting its ability to fund the critical infrastructure and social programs required to drive growth. Jamaica's economic growth rate in the recent past has been stagnant, averaging less than 1% per year for over 20 years. Jamaica's onerous public debt burden is largely the result of government bailouts to ailing sectors of the economy, most notably to the financial sector. In early 2010, the Jamaican Government initiated the Jamaica Debt Exchange to retire high-priced domestic...

Words: 580 - Pages: 3

Malaysia Macroeconomic

...Page INTRODUCTION 2 Economic growth and living standards in Malaysia. 3 -7 Unemployment in Malaysia 7 - 10 Inflation in Malaysia 10 - 12 Summary 13 References 13 -14 1. Introduction Macroeconomics can be best understood in contrast to microeconomics which considers the decisions made at the level of a specific subgroups or individuals. Macroeconomics considers the behavior of an economy at the aggregate level or how all of these decisions sum together. It looks at the bigger picture and involves the study of the economy as a whole. More specifically, it is a study of national economies and the determination of national income. The study of macroeconomics are focusing on several factors that are: * Real output – determine the reason of the economic growth and their differences between various countries. * Productivity – the average labour productivity. * Economic growth – causes of decline and growth. * Unemployment – types, reason and how to overcome it. * Inflation – Causes, reason of different rate either from time to time and from one country to another. In order to greasing the engine of the economy, government used several policies such as: * Financial or monetary policies to influences supply...

Words: 3314 - Pages: 14


...Macroeconomic Picture of Agriculture sector in Indian Economy Theodore Schultz began his acceptance speech for the 1979 Nobel Prize in Economics observing: “Most of the people in the world are poor, so if we knew the economics of being poor we would know much of the economics that really matters. Most of the world's poor people earn their living from agriculture, so if we knew the economics of agriculture we would know much of the economics of being poor” (Shultz, 1979). Existing empirical evidence on the impact of macroeconomic variables on agriculture remains mixed and inconclusive. This paper re-examines the dynamic relationship between monetary policy variables and agricultural prices using alternative vector auto regression (VAR) type model specifications. Directed acyclic graph theory is proposed as an alternative modeling approach to supplement existing modeling methods. Similar to results in other studies, this study Â’s findings show that over the time period analyzed (1975–2000), changes to money supply as a monetary policy tool had little or no impact on agricultural prices. The primary macroeconomic policy instrument that affects agricultural prices is the exchange rate, which is shown to be directly linked to interest rate, a source of monetary policy shock. The Transmission of Exchange Rate Changes to Agricultural Prices (July 2009) provides empirical evidence that price and exchange rate transmission for agricultural products is low in most...

Words: 670 - Pages: 3

Macroeconomic Terms

... representation of the relationship between price and quantity demanded.” (Colander, p. 78) “Aggregate demand is the total demand by domestic and foreign households and firms for resources from abroad” Economics Online, n.d.) | | Macroeconomics | Macroeconomics – is the study of the economy as a whole. It takes into consideration the inflation, unemployment, business cycles, and growth. | | Microeconomics | Microeconomics – is the study of individual choice, and how that choice is influenced by economic forces. It looks into price of and policies of the firms, households' decisions, and markets allocate resources. | | Circular Flow Model | | | Supply Curve | Supply Curve is a graph showing the level of supply of a product at certain set price points. The supply line is draw on the upward slope. In the short run the curve the increase in price will show an increase in supply. As the market attracts new producers the supply curve will go down and prices will more than likely increase | | Demand Curve | Demand Curve is a graph showing the quantity of demand of a products according to certain set price points. The demand line is drawn in a downward slope. As the demand price increases the quantity of demand decreases. | |...

Words: 418 - Pages: 2

Macroeconomic Environment

...INTRODUCTION **** marketing definition Macro economics is the study of the behaviour and trends in the economy as a whole involving the analysis of six major forces to identify possible opportunities and threats available to the organisation. To illustrate these forces, the hypothetical “Bamboo Company” (located in Sydney New South Wales) will be used. This organisation has prided itself on the use of recyclable and renewable resources where possible and as a result, has developed the Bambicycle. This entry level hybrid bicycle combines the best attributes of a road bike and a mountain bike in one as well as being constructed by bamboo which is one of the world’s fastest growing renewable resources. An analysis of the six macroeconomic influences with reference to the Bamboo Company are as follows: THE DEMOGRAPHIC ENVIRONMENT Demographics is the statistical study of the population as a whole, consisting of the following variables and how they will affect the bicycle marketing environment: – The changing age structure of population “Australia's population, like that of most developed countries, is ageing as a result of sustained low fertility and increasing life expectancy” (Australian Bureau of Statistics [ABS], 2010a para 7). The proportion of the population aged 65 years and over is projected to increase from 13% in 2007 to between 23% and 25% in 2056, and 25% and 28% in 2101 (ABS, 2010c para 15) with the...

Words: 3455 - Pages: 14

Macroeconomic Homework

... Vietnam National University, Hanoi UNIVERSITY OF ECONOMICS AND BUSINESS Macroeconomics Home work 1. Measuring a Nation’s Income Section 1: Multiple choice questions 1. In producing a sweater, a man who shears sheep pays a farmer $4 for a sheep. The shearing shop sells the wool to a knitting mill for $7. The knitting mill buys the wool and makes it into a fine fabric and sells it to a sweater-making firm for $13. The sweater-making firm sells the sweater to a clothing store for $20, and the clothing store sells the sweater, gift wrapped, for $50. What is the contribution to GDP of the previous sales transactions? a. $4. b. $44. c. $50. d. $94. 2. Susie grows corn in her backyard garden to feed her family. The corn she grows is not counted in GDP because a. it was not produced for the marketplace. b. it is an intermediate good which Susie will process further. c. the corn has no value. d. it reduces the amount of corn she will buy at the store. 3. Which of the following would be counted in U.S. GDP? a. the purchase of an historical house b. the purchase of a haircut c. the purchase of a $1000 government savings bond d. the value generated when you wash your car in your driveway 4. If private investment increased by $50 billion while GDP remained the same, which of the following could have occurred, all else being the same? a. Consumption spending decreased by $50...

Words: 6193 - Pages: 25

Macroeconomic Terms

...| | | |government collects. All | | | |of this is used in the | | | |study of macroeconomics. | | |Monetary Policy |Monetary Policy is a term|| | |that the Federal Reseve |y | | |refers to describe the | | | |amount of money and | | | |credit that is |Monetary Policy Basics | | |circulatimg in the U.S. | | | |economy. | ......

Words: 564 - Pages: 3

Macroeconomic Terms

... policy through which a central bank influences a nation's money supply. /051904.asp Monetary Policy is the macroeconomic policy laid down by the central bank. It involves management of money supply and interest rate and is the demand side economic policy used by the government of a country to achieve macroeconomic objectives like inflation, consumption, growth and liquidity. m/definition/monetary-policy Copyright © 2015 by University of Phoenix. All rights reserved. 1 Macroeconomic Terms ECO/372 Version 8 Aggregate Demand (AD) Curve The aggregate demand curve represents the total quantity of all goods (and services) demanded by the economy at different price levels Macroeconomic s Macroeconomics refers to the 'big picture' study of economics, so looking at concepts like industry, country, or global economic factors. Macroeconomics includes looking at concepts like a nation's Gross Domestic Product (GDP), unemployment rates, growth rate, and how all these concepts interact with each other. m/article/1052/macroeconomicsvs-microeconomics-d1412/ Microeconomics Microeconomics refers to more individual or company specific studies in economics. How businesses establish prices, how taxes will impact...

Words: 657 - Pages: 3