Questions and Answers of Foundations Macroeconomics

In the market for jeans, which of the following events increases the demand for a pair of jeans?A. The wage rate paid to garment workers rises.B. The price of a denim skirt (a substitute for jeans)
Which of the following events illustrates the law of demand? Other things remaining the same, a rise in the price of a good will ________ .A. Decrease the quantity demanded of that goodB. Increase
China’s economic slowdown could help reduce the cost of steel used by U.S. auto makers.Explain how an economic slowdown in China influences the global steel market. What happens to the equilibrium
Bacon is 25 percent cheaper now than a year ago and bacon sales are up 13 percent on the year. At the same time, the bird flu virus is killing millions of chickens, raising egg prices.Explain how
“Raising the minimum wage to $15 an hour will … bring dignity and respect to 2.2 million people, many of whom have been forced to live in poverty for too long,” said Governor Andrew Cuomo.
During Valentine€™s week, more people buy chocolates and chocolates offer their chocolates in special red boxes, which cost more to produce than the everyday box. Set out the three-step
If the price of chocolates is $17.00 a box, describe the situation in the market. Explain how market equilibrium is restored.The table shows the demand and supply schedules for boxes of chocolates in
Concerns about the U.S. winter wheat crop and dry conditions in other wheat-producing nations have increased the price of wheat.Explain how an upcoming harvest influences today’s price of wheat.
What is the effect on the equilibrium in the orange juice market if orange juice becomes more popular and a cheaper robot is used to pick oranges?
What is the effect on the equilibrium price and equilibrium quantity of orange juice if the price of apple juice decreases and the wage rate paid to orange grove workers increases?
Why can we be confident that the market for coffee is competitive and that a decrease in supply rather than the greed of coffee growers is the reason for the 2014 rise in price?
Read Eye on the Price of Coffee and explain how we know that the price increased in 2014 because the supply of coffee decreased and not because the demand for coffee increased.
Are Venezuela’s price controls price floors or price ceilings? Draw a graph to illustrate the shortages of food created by the price controls.The government of Venezuela controls the price of food
Use the demand and supply model to explain how heavy rain will change the prices of corn and soybeans.Heavy rain has delayed the planting of corn and soybean and soggy conditions have slowed the
The table shows the demand and supply schedules for student workers at campus venues. If the college introduces a minimum wage of $11.50 an hour, how many students are employed and how many students
“As more people buy fuel-efficient hybrid cars, the demand for gasoline will decrease and the price of gasoline will fall. The fall in the price of gasoline will decrease the supply of gasoline.”
The table shows the demand and supply schedules for running shoes. What is the market equilibrium? If the price is $70 a pair, describe the situation in the market. Explain how market equilibrium is
If the price of frozen yogurt falls, the quantity of ice cream consumed will decrease and the price of ice cream will rise.Use the laws of demand and supply to explain whether the statements is below
The United States does not allow oranges from Brazil (the world’s largest producer of oranges) to enter the United States. If Brazilian oranges were sold in the United States, oranges and orange
Explain how each of the following events changes the demand for or supply of air travel. Airfares tumble, while long-distance bus fares don’t change.The price of jet fuel rises.Airlines reduce
Mary makes 10 pies and 20 cakes a day and her opportunity cost of producing a cake is 2 pies. Tim makes 20 pies and 10 cakes a day and his opportunity cost of producing a cake is 4 pies. If Mary
The table shows the PPF of an island community. Choose the best statement.A. This community has enough resources to produce 2 pounds of fish and 36 pounds of berries.B. This community cannot produce
Explain why it is not possible for everyone to have free Internet access to education, news, jobs, and more.
Sketch a PPF with education and news on the x-axis and other goods and services on the y-axis before and after the Internet.Everyone should have free Internet access to education, news, jobs, and
Explain how Internet access has changed the production possibilities and the opportunity cost of producing education and news.Everyone should have free Internet access to education, news, jobs, and
If the farm adopted a new technology, which allows it to use fewer resources to fatten chickens, explain how the farm€™s production possibilities will change. Explain how the opportunity
Provide two examples of economics being used as a tool by (a) A student, (b) A business, and (c) A government. Classify your examples as dealing with microeconomic topics and
Suppose that the government introduces a minimum wage of $0.80 an hour. What is the real wage rate, the quantity of labor employed, potential GDP, and unemployment? Does the unemployment arise from
Which of the events increase potential GDP and which decrease potential GDP?Use the following list of events that occur one at a time to workThe Middle East cuts supplies of oil to the United
What is the quantity of labor employed, potential GDP, the real wage rate, and total labor income?The two tables set out information about the economy of Nautica. Use this information to work
Which of the events raise the real wage rate and which of the events lower the real wage rate?Use the following list of events that occur one at a time to work Problem.The Middle East cuts supplies
Which of the events increase the equilibrium quantity of labor and which decrease the equilibrium quantity of labor?Use the following list of events that occur one at a time to work Problem.The
Sort the items into four groups: those that change the production function, those that change the demand for labor, those that change the supply of labor, and those that do not change the production
Calculate the quantity of labor employed, the real wage rate, and potential GDP.Use the information set out in the tables above about the economy of Athabasca to work this Problem. Production
If the labor force participation increases, explain how employment, the real wage rate, and potential GDP change.Use the information set out in the tables above about the economy of Athabasca to work
What was the percentage increase in production from 2012 to 2015, and by what percentage did the price level rise from 2012 to 2015?The base year is 2012. Real GDP in 2012 was $15 trillion. The GDP
Calculate nominal GDP in 2012 and in 2015 and the percentage increase in nominal GDP from 2012 to 2015.The base year is 2012. Real GDP in 2012 was $15 trillion. The GDP price index in 2015 was 105,
Use the information provided to estimate how much of the unemployment in Ames and El Centro in 2009 was cyclical and how much was natural. Explain your assumptions in arriving at your estimates.The
Explain why the natural unemployment rate is not zero and why the unemployment rate fluctuates around the natural unemployment rate.
Where do sales and inventories of existing homes appear in the circular flow of expenditure and income? Explain how an increase in sales of existing homes and a low inventory of existing homes
Where do new-home sales appear in the circular flow of expenditure and income? Explain how a surge in new home sales affects real GDP.Purchases of new U.S. homes surged in December and 2015 was the
Explain where these activities appear in the National Income and Product Accounts of Japan.
Explain where these activities appear in the National Income and Product Accounts of the United States.Mitsubishi Heavy Industries makes the wings of the new Boeing 787 Dream liner in Japan. Toyota
The table above shows the PPF of an island community. This community€™s opportunity cost of producing 1 pound of fish ______.A. Is the increase in the quantity of berries gathered as the
The table above shows the PPF of an island community. Choose the best statement.A. When a drought hits the island, its PPF shifts outward.B. When the islanders discover a better way of catching fish,
The table above shows the PPF of an island community. Choose the best statement.A. Suppose that this community produces 3 pounds of fish and 20 pounds of berries. If it decides to gather more
The income gap has widened in China. In 2014, the pay of workers in the coastal regions increased by 9.7 percent while that of workers in the inland regions grew by 9 percent. Explain how the
Compare the scale of agricultural production in the advanced and developing economies. In which is the percentage higher? In which is the total amount produced greater?
On a diagram of the circular flow model, indicate in which real or money flow each entry in the list belongs.General Motors’ pays its workers wages.IBM pays a dividend to its stockholders.You buy
How is the personal distribution of income in India changing?Poor India makes millionaires at fastest pace India, with the world’s largest population of poor people, also paradoxically created
Why might incomes of $1 a day and $2 a day underestimate the value of the goods and services that these households actually consume?Poor India makes millionaires at fastest pace India, with the
Which of the following classifications is correct?A. City streets are consumption goods because they wear out with use.B. Stocks are capital goods because when people buy and sell them they make a
Which of the following statements about U.S. production is correct?A. Construction accounts for a larger percentage of total production than does manufacturing. B. Real estate
Which of the following items is not a factor of production?A. An oil rig in the Gulf of MexicoB. A ski jump in UtahC. A bank loan to a farmerD. An orange grove in Florida
What is human capital?A. A fruit pickerB. Unskilled laborC. Your professor’s knowledge of the economyD. An auto assembly line robot
Which of the following statements is correct?A. Labor earns wages and entrepreneurship earns bonuses.B. Land earns interest and capital earns rent.C. Entrepreneurship earns interest and capital earns
How are goods and services produced in the global economy?A. Developing countries use less human capital but just as much physical capital as advanced economies.B. Emerging economies use more
In the circular flow model, which of the following items is a real flow?A. The flow of government expenditures to firms for the goods boughtB. The flow of income from firms to households for the
If the farm uses its resources efficiently, what is the opportunity cost of an increase in chicken production from 300 pounds to 500 pounds a year? Explain your answer.Use the table, which shows a
The table shows the quantities of corn and beef that a farm can produce in a year. Draw a graph of the farm€™s PPF. Mark on the graph:An inefficient combination of corn and beef label this
The people of Food land have 40 hours of labor a day to bake pizza and bread. The table shows the maximum quantity of either pizza or bread that Food land can bake with different quantities of labor.
Make a graph of the production possibilities frontier with malaria control on the x-axis and other goods and services on the y-axis.Malaria can be controlled The World Health Organization’s
Is the $208 million that electricity producers will spend to comply with the new rules part of the opportunity cost of producing electricity?Representatives Waxman of California and Markey of
Describe how the opportunity cost of controlling malaria changes as more resources are used to reduce the number of malaria cases.Malaria can be controlled The World Health Organization’s
Explain how the following events influence U.S. production possibilities:Some retail workers are re-employed building dams and wind farms.More people take early retirement.Drought devastates
Is the $821 billion that the government would spend on incentive programs and compensation for higher energy prices part of the opportunity cost of producing electricity?Use the following
In the African nation of Senegal, to enroll in school a child needs a Birth Certificate that costs $25. This price is several weeks’ income for many families. Explain how this requirement is likely
Which of the entries in the list are consumption goods and services? Explain your choice.List• An interstate highway•
Is the $846 billion that electricity producers would pay for the right to emit greenhouse gasses part of the opportunity cost of producing electricity?Representatives Waxman of California and Markey
Would the Waxman-Markey law achieve production efficiency?Representatives Waxman of California and Markey of Massachusetts proposed a law to limit greenhouse gas emissions from electricity generation
If Tom and Abby specialize and trade 15 balls for 1 racket, what are the gains from trade?Figure 3.3 (on below) shows Tom€™s production possibilities and Figure 3.4 (on the next page) shows
Which of the entries in the list are capital goods? Explain your choice.List• An interstate highway• An
In the circular flow model, explain the real flow and/or the money flow in which each item below belongs. Illustrate your answers on a circular flow diagram. You buy a coffee at Starbucks.The
What is Tom€™s opportunity cost of producing a racket? What is Abby€™s opportunity cost of a racket? Who has a comparative advantage in producing rackets? Who has a comparative
Use the following information gathered by a BLS labor market survey of four households to work the following Problem.Household 1: Candy worked 20 hours last week setting up her Internet shopping
Read Eye on the Environment and describe a trade off faced when deciding how to generate electricity and whether to use wind power.
Which of the entries in the list are factors of production? Explain your choice.
Boeing’s Dream liner has had a rocky start.1. Why doesn’t Boeing manufacture all the components of the Dream liner at its own factory in the United States?2. Describe some of the changes in what,
The global economy has seen a fall in the number of landlines and rapid growth in the number of smartphones. In the United States, 41 percent of households have no landline and 90 percent have a
Read Eye on the Dream liner and then answer the following questions:How many firms are involved in the production of the Dream liner and how many are identified in the figure ?Is the Dream liner a
Why you can get a free college education in Germany but not in California Even American students can get a free college degree in Germany, where high taxes pay for colleges. Despite college being
The pace at which new businesses are created in the U.S. economy and the percentage of U.S. jobs in young firms has fallen. Ryan Decker and others, “The Role of Entrepreneurship in U.S. Job
Define the factor of production called capital. Give three examples of capital, different from those in the chapter. Distinguish between the factor of production capital and financial capital.
With more job training and more scholarships to poor American students, which special factor of production is likely to grow faster than in the past?
Which factor of production earns the highest percentage of total U.S. income? Define that factor of production. What is the income earned by this factor of production called?
Which of the following items are not factors of production? Explain why not.Vans used by a baker to deliver bread1,000 shares of Amazon.com stockUndiscovered oil in the Arctic Ocean
Which of the following items are not capital goods? Explain why not. An auto assembly lineA shopping mallA golf ball
Which of the following items are not consumption goods and services? Explain why not. A chocolate barA ski liftA golf ball
The scientific method uses models to ___________.A. Clarify normative disagreementsB. Avoid the need to study real questionsC. Replicate all the features of the real worldD. Focus on
Which of the following best illustrates your marginal benefit from studying?A. The knowledge you gain from studying 2 hours a night for a monthB. The best things forgone by studying 2 hours a night
A rational choice is ___________.A. The best thing you must forgo to get somethingB. What you are willing to forgo to get somethingC. Made by comparing marginal benefit and marginal costD. The best
Which of the following is not a key idea in the economic way of thinking?A. People make rational choices by comparing costs and benefits.B. Poor people are discriminated against and should be treated
Of the three big questions, what, how, and for whom, which of the following is an example of a how question?A. Why do doctors and lawyers earn high incomes?B. Why don’t we produce more small cars
Which of the following defines economics?Economics is the social science that studies ___________.A. The best way of eliminating scarcityB. The choices made to cope with scarcity, how incentives
Which of the following describes the reason why scarcity exists?A. Governments make bad economic decisions.B. The gap between the rich and the poor is too wide.C. Wants exceed the
Explain whether the Clean Power Plan has an opportunity cost.Use the following news clip Obama unveils major climate change policy Obama’s Clean Power Plan, which will set federal limits on carbon
Explain why someone might oppose the Clean Power Plan when its benefits exceed its costs.Use the following news clip Obama unveils major climate change policy Obama’s Clean Power Plan, which will
What are the $8.4 billion of costs arising from using less coal to produce electricity? Who bears these costs: the users of electricity or the owners of power plants, or both the users and the
What are the more than $34 billion of benefits from using less coal to produce electricity? Who receives these benefits: the users of electricity or the owners of power plants, or both the users and
Think about each of the items in the list and explain how they affect incentives and might change the choices that people make:A hurricane hits Central Florida.The World Series begins tonight but a

Showing 1000 - 1100 of 1140