ECONOMICS

• An autoworker is considered labor and earns wages
• In economics, positive statements are about, the way things are.
• Factor payment for entrepreneur is called profit
• Normative economics seeks to understand but not to make judgment. FALSE
• Which of the following is a microeconomic topic?

  • the reasons for a decline in average prices
  • the cause of why total employment may decrease
  • the effect of the government budget deficit on inflation
  • the reasons why Kathy buys less orange juice
• Microeconomics focuses on all of the following EXCEPT

  *

  • the purchasing decisions that an individual consumer makes.
  • the effect of an increase in the tax on cigarettes on cigarette sales.
  • the effect of increasing the money supply on inflation.
  • the hiring decisions that a business makes.
• Why is scarcity central to understanding economics? Because there are insufficient resources to satisfy everyone's needs and wants
• Economics is best defined as the study of how people, businesses, governments, and societies, make choices to cope with scarcity.
• Positive and normative statements differ in that; positive statements can be tested, whereas normative statements cannot.
• Which of the following is a macroeconomic issue?

  • how Philippine government budget deficits affect interest rates
  • the cause of a decline in the price of peanut butter
  • what determines the amount a firm will produce
  • how a rise in the price of sugar affects the market for sodas
• Macroeconomics is concerned with

  *

  • The level of output of goods and services
  • the general level of prices
  • The growth of income
  • all of the above
• The term used to emphasize that making choices in the face of scarcity involves a cost is;

  • opportunity cost.
• What is the fundamental problem of every society?

  scarcity
• In broad terms the difference between microeconomics and macroeconomics is that; microeconomics studies decisions of individual people and firms and macroeconomics studies the entire national economy
• "The rich should pay higher income tax rates than the poor" is an example of a normative statement.
• Which of the following is an example of capital?

  *

  • Money
  • Factory
  • Labor
  • None of these
• Inflation and unemployment topics belong to the study of microeconomics. FALSE
• The value of net exports is: an injection into the economy if exports exceed imports
• Scarcity requires that people must; make choices.
• To include the value of parts used in producing the automobiles turned out during a year in gross domestic product for that year would be an example of Multiple counting
• The most fundamental economic problem is scarcity.
• Real GDP (or GDP in "constant prices") means; GDP has been adjusted for price level changes
• Consider the profits of Japanese management working at a Honda plant in the United States. The profits__ in US GDP and __ in US GNP(GNI).

  • count, do not count
• The risk bearer in the production process is called

  • entrepreneur
• Inflation and unemployment topics belong to the study of microeconomics. FALSE
• GDP includes:

  • Final, but not intermediate goods
• On Saturday morning, you rank your choices for activities in the following order: go to the library, work out at the gym, have breakfast with friends, and sleep late. Suppose you decide to go to the library. Your opportunity cost is

  • working out at the gym, having breakfast with friends, and sleeping late.
• The difference between GDP and GNI is essentially the difference between:

  • location of production and ownership of resources.