Trade
what is autarky?
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
The phase of the business cycle in which real GDP declines is called
A recession
A recession is a decline in
a:the inflation rate that lasts six months or longer.
b: the unemployment rate that lasts for two quarters
C: real GDP that lasts for two consecutive quarters
d: potential GDP that lasts six months or longer.
C: real GDP that lasts for two consecutive quarters
What is the definition for comparative advantage?
The ability to produce a product at a lower opportunity cost than other producers
What is an import? What is an export?
when a country sells goods to another country
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
In which phase of the business cycle will the economy most likely experience rising real output and falling unemployment rates?
Expansion
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
How do we calculate the labor force participation rate?
(# in the labor force/# of working age population) x 100
what is a tariff?
A tax or fee that must be paid on goods that are imported from other countries.
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
If the marginal product of producing jelly is 4 with 1 worker, 3 with 2 workers, and 2 with 3 workers, and the price of a jar of jelly is $5, what is the Marginal Revenue Product for 1,2, and 3 workers? (make a table to help organize the information)
MRP= PxMP
1 worker= 5 x 4= 20
2 workers= 5 x 3= 15
3 workers= 5 x 2= 10
Unemployed 7
Total Population 145
Employed 95
Discouraged Workers 3
The table contains information about a hypothetical economy. All figures are in millions. The amount in the labor force is...
102
--Labor force= Employed and Unemployed
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
True or False
we can impose tariffs on exports
false. tariffs are applied to the exporting country from the importing country
An employer hiring in a competitive labor market should hire additional labor as long as
MRP>wage rate (MRC)
If the wage rate is $8, and the MRP of labor is $12 with 1 worker, $10 with 2 workers, $8 with 3 workers, $6 with 4 workers, and $4 with 5 workers, the firms total labor costs will be?
$24
hire three workers where MRC (wage rate)=MRP. Multiply by their wages
What is the equation to calculate CPI?
(Market Value Basket2/Market Value of Basket1)*100
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
When the world price is below the autarky price, are we importing or exporting?
importing because we have a shortage (similar to how price ceilings work)
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
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
What is the equation to calculate inflation?
Percent change in CPI
(CPInew-CPIold)/CPIold
What are three benefits to trading?
Lower cost alternatives
increased diversity of choices
greater access to resources