1ST

• An autoworker is considered __ and earns __.

  • labor; 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 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?

  • Factory
• 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

  • Including a nonmarket transaction
  • Including a nonproduction transaction
  • Including a non-investment transaction
  • 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:

  • Intermediate, but not final goods.
  • Neither intermediate nor final goods
  • Both intermediate and final goods.
  • 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.