FSU Hammock Macro Final
B - ANS-"An 10% increase in the minimum wage will increase unemployment by 1%. This
statement is...
A. consistent with the economics of price ceilings.
B. a positive economic statement.
C. a normative economic statement.
D. a negative externality.
B D - ANS-This is a multiple answer question, which means that there may be more than one
correct answer. Select all the answers that are correct.
Which of the following are examples positive economic statements?
A. The unemployment rate is too high.
B. The unemployment rate is 4%.
C. If the price of gasoline rises above $3.00, that is too high.
D. A decrease in the price of gasoline will cause the quantity supplied to fall, ceteris paribus.
C - ANS-The opportunity cost of an action is
A. the monetary payment the action required.
B. the total time spent by all parties in carrying out the action.
C. the value of the best opportunity that must be sacrificed in order to take the action.
D. the cost of all alternative actions that could have been taken, added together.
b - ANS-The opportunity cost of going to college is
A. the total spent on food, clothing, books, transportation, tuition, lodging, and other expenses.
B. the value of the best opportunity a student gives up to attend college.
C. zero for students who are fortunate enough to have all of their college expenses paid by
someone else.
D. zero, since a college education will allow a student to earn a larger income after graduation.
B - ANS-point A is
A. unattainable.
B. inefficient.
C. efficient.
D. preferable to point B.
A - ANS-Mateo values his camper at $4,000, and Nicole values it at $9,000. If Nicole buys it
from Mateo for $7,000, which of the following is true?
A. Mateo gains $3,000 of value, and Nicole gains $2,000 of value.
B. Mateo gains $7,000 of value, and Nicole loses $7,000 of value.
C. Mateo gains $7,000 of value, and Nicole gains $6,000 of value.
D. Mateo and Nicole both gain $7,000 of value.
, D - ANS-The production possibilities curve illustrates the basic principle that
A. an economy's capacity to produce is unrelated to its population.
B. if all the resources of an economy are being used efficiently, more of one good can be
produced only if more of another good is produced.
C. an economy will automatically move toward a point at which all of its resources are being
used inefficiently.
D. if all the resources of an economy are being used efficiently, more of one good can be
produced only if less of another good is produced.
B - ANS-The market for printed economic textbooks is in equilibrium. As incomes rise, students
buy fewer printed textbooks, and buy more e-books instead. You can conclude (ceteris paribus)
that...
A. printed textbooks are normal goods
B. printed textbooks are inferior goods.
C. printed textbooks are complements for e-books.
D. e-books are inferior goods.
B - ANS-Consider the demand curve for blue jeans. The price of blue jeans goes down. Ceteris
paribus, which of the following will occur?
A. The quantity of blue jeans demanded falls.
B. The quantity of blue jeans demanded rises.
C. The demand for blue jeans falls.
D. The demand for blue jeans rises.
B - ANS-The Law of Demand is...
A. a law of nature, like the law of gravity.
B. a general tendency in human behavior.
C. mostly false, except in a few circumstances.
D. always true, but only for computer programs.
C - ANS-According to the law of supply,
A. more of a good is desired by consumers as the price falls.
B. less of a good is desired by consumers as the price rises.
C. more of a good will be offered by suppliers as the price rises.
D. less of a good will be offered by suppliers as the price rises.
A - ANS-Which of the following would most likely increase the supply of beef?
A. lower prices of grains used to feed cattle
B. lower prices for chicken, a substitute for beef
C. new medical research suggesting that beef causes more serious health problems than was
previously thought
D. an increase in the cost of transporting beef products to the consumer market
B - ANS-"An 10% increase in the minimum wage will increase unemployment by 1%. This
statement is...
A. consistent with the economics of price ceilings.
B. a positive economic statement.
C. a normative economic statement.
D. a negative externality.
B D - ANS-This is a multiple answer question, which means that there may be more than one
correct answer. Select all the answers that are correct.
Which of the following are examples positive economic statements?
A. The unemployment rate is too high.
B. The unemployment rate is 4%.
C. If the price of gasoline rises above $3.00, that is too high.
D. A decrease in the price of gasoline will cause the quantity supplied to fall, ceteris paribus.
C - ANS-The opportunity cost of an action is
A. the monetary payment the action required.
B. the total time spent by all parties in carrying out the action.
C. the value of the best opportunity that must be sacrificed in order to take the action.
D. the cost of all alternative actions that could have been taken, added together.
b - ANS-The opportunity cost of going to college is
A. the total spent on food, clothing, books, transportation, tuition, lodging, and other expenses.
B. the value of the best opportunity a student gives up to attend college.
C. zero for students who are fortunate enough to have all of their college expenses paid by
someone else.
D. zero, since a college education will allow a student to earn a larger income after graduation.
B - ANS-point A is
A. unattainable.
B. inefficient.
C. efficient.
D. preferable to point B.
A - ANS-Mateo values his camper at $4,000, and Nicole values it at $9,000. If Nicole buys it
from Mateo for $7,000, which of the following is true?
A. Mateo gains $3,000 of value, and Nicole gains $2,000 of value.
B. Mateo gains $7,000 of value, and Nicole loses $7,000 of value.
C. Mateo gains $7,000 of value, and Nicole gains $6,000 of value.
D. Mateo and Nicole both gain $7,000 of value.
, D - ANS-The production possibilities curve illustrates the basic principle that
A. an economy's capacity to produce is unrelated to its population.
B. if all the resources of an economy are being used efficiently, more of one good can be
produced only if more of another good is produced.
C. an economy will automatically move toward a point at which all of its resources are being
used inefficiently.
D. if all the resources of an economy are being used efficiently, more of one good can be
produced only if less of another good is produced.
B - ANS-The market for printed economic textbooks is in equilibrium. As incomes rise, students
buy fewer printed textbooks, and buy more e-books instead. You can conclude (ceteris paribus)
that...
A. printed textbooks are normal goods
B. printed textbooks are inferior goods.
C. printed textbooks are complements for e-books.
D. e-books are inferior goods.
B - ANS-Consider the demand curve for blue jeans. The price of blue jeans goes down. Ceteris
paribus, which of the following will occur?
A. The quantity of blue jeans demanded falls.
B. The quantity of blue jeans demanded rises.
C. The demand for blue jeans falls.
D. The demand for blue jeans rises.
B - ANS-The Law of Demand is...
A. a law of nature, like the law of gravity.
B. a general tendency in human behavior.
C. mostly false, except in a few circumstances.
D. always true, but only for computer programs.
C - ANS-According to the law of supply,
A. more of a good is desired by consumers as the price falls.
B. less of a good is desired by consumers as the price rises.
C. more of a good will be offered by suppliers as the price rises.
D. less of a good will be offered by suppliers as the price rises.
A - ANS-Which of the following would most likely increase the supply of beef?
A. lower prices of grains used to feed cattle
B. lower prices for chicken, a substitute for beef
C. new medical research suggesting that beef causes more serious health problems than was
previously thought
D. an increase in the cost of transporting beef products to the consumer market
