Consumer/Producer Surplus
Resources
Business Cycle
Wage Determination
Trade
100
What is Autarky?
No trading
100
Marginal Revenue Product measures...
A: amount by which the addition of one more worker increases a firms total revenue
B:Decline in product price that a firm must accept to sell the extra output of one more worker
C: Increase in total resource cost resulting from the hire of one extra unit of a resource
D: increase in total revenue resulting from the production of one more unit of a product
A: amount by which the addition of one more worker increases a firms total revenue
100
The phase of the business cycle in which real GDP declines is called
A recession
100
A recession is a decline in
a:the inflation rate that lasts six months or longer.
b: the unemployment rate that lasts six months or longer.
C: real GDP that lasts six months or longer.
d: potential GDP that lasts six months or longer.
C: real GDP that lasts six months or longer
100
What is the definition for comparative advantage?
The ability to produce a product at a lower opportunity cost than other producers
200
What is the definition of consumer suplus?
the difference between the total amount that consumers are willing and able to pay for a good or service
200
The MRP curve for labor...
A: intersects the firm's labor demand curve from above
B: is the firms labor demand curve
C: lies below the firms labor demand curve
D: Lies above the firm's labor demand curve
B: is the firms labor demand curve
200
In which phase of the business cycle will the economy most likely experience rising real output and falling unemployment rates?
Expansion
200
if the nominal wages of carpenters rose by 5 percent in 2013 and the price level increased by 3 percent, then the real wages of carpenters
increased by 2%
5-3=2
200
What is the definition of Absolute advantage
Given a set amount of resources, we can produce more than our competitors
300
What is the definition of Producer surplus
a difference between how much of a good the producer is willing to supply versus how much he receives in the trade.
300
Assume labor is the only variable input and that an additional input of labor increases total output from 72 to 80 units. If the product sells for $6 per unit in a purely competitive market, the MRP of this additional worker is...
48
(80-72)/1=8*6=48
300
3 workers
300
Unemployed 7
Total Population 145
Employed 95
Discouraged Workers 3
The table contains information about the hypothetical economy of Scoob. All figures are in millions. The labor force in Scoob is
102
--Labor force= Employed and Unemployed
300
When determining the terms of trade, how do we know who makes what? And How do we calculate this?
Whoever has the lowest opportunity cost in producing that good.
OR
Whoever has the comparative advantage in producing that good
opportunity cost= Given up/produce
400
True or False:
We can impose tariffs on exports?
False. Tariffs are applied to the exporting country from the importing country
400
An employer hiring in a competitive labor market should hire additional labor as long as
MRP>wage rate
400
24$
400
What is the equation to calculate CPI?
(Market Value Basket2/Market Value of Basket1)*100
400
If quantity supplied is greater than the quantity demanded, do we import or export?
If quantity demanded is greater than the quantity supplied, do we import or export?
Export
Import
500
When is consumer surplus greater, assuming the world price is below equilibrium, at the world price or the domestic price?
consumer surplus is greater at the world price
500
Harry owns a barbershop and charges $6 per haircut. By hiring one barber at $10 per hour, the shop can provide 24 haircuts per eight-hour day. By hiring a second barber at the same wage rate, the shop can now provide a total of 42 haircuts per day. The MP of the second barber is
18 haircuts
MP=change in TP/change in Q
(42-24)/1=18
500
The industries or sectors of the economy in which business cycle fluctuations tend to affect output most are
A: military goods and capital goods
B: services and nondurable consumer goods
C: clothing and education
D: capital goods and durable goods
D: capital goods and durable consumer goods
500
What is the equation to calculate inflation?
Percent change in CPI
(CPInew-CPIold)/CPIold
500
What are three benefits to trading?
Lower cost alternatives
increased diversity of choices
greater access to resources