AP Macro Vocabulary

D. normative economics.

The economizing problem is one of deciding how to make the best use of: A. virtually unlimited resources to satisfy virtually unlimited wants.

Refer to the above graphs.

The French term "laissez-faire" means: A. "there is no free lunch."

B. marginal benefits that exceed marginal costs.

C. land, labor, capital, and entrepreneurial ability.

Specialization in production is important primarily because it: A. allows society to have fewer capital goods.

C. it reduces turnover among minimum wage workers, prompts employers to use them more efficiently, and thus raises their average productivity.

Real wages in the United States in the long run: A. have increased slower than increases in output per worker.

Which of the following activities is excluded from GDP, causing GDP to understate a nation's well-being?

Real wages in the United States in the long run: A. have increased slower than increases in output per worker.

B. cannot be determined from available data on nominal wages and the price level.

D. normative economics.

C. contradicts the economic perspective.

D. increasing the price of complementary resources.

AACSB: Analytic Blooms: Level 1 Remember Difficulty: 1 Easy Learning Objective: 13-05 List the major causes of wage differentials.

AACSB: Analytic Blooms: Level 1 Remember Difficulty: 1 Easy Learning Objective: 01-04 List the categories of scarce resources and delineate the nature of the economizing problem.

A. inverse, inverse B. inverse, direct C. direct, inverse D. direct, direct

An increase in consumer desire for strawberries is most likely to: A. reduce the supply of strawberries.

C. has been downward because labor's share of the domestic income has fallen.

Assume the Ajax Mining Company hires 80 percent of the nonunion labor force of Mother Lode, New Mexico.

C. has been downward because labor's share of the domestic income has fallen.

A. Increasing the price of products that are complements for the one it is producing.

Occupational licensing: A. often restricts occupational entry and raises the incomes of license holders.

Unions might support a higher minimum wage because: A. their constitutions obligate them to do so.

Economists would describe this employer as a: A. monopolist.

C. human beings are inherently insecure.

D. production costs were minimized.

B. government action is necessary if the economy is to achieve full employment and full production.

D. purposefulness.

B. social science concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity.

D. a budget line.

C. increase the price of substitute inputs.

AACSB: Reflective Thinking Blooms: Level 1 Remember Difficulty: 1 Easy Learning Objective: 24-02 Describe the relationships among GDP; net domestic product; national income; personal income; and disposable income.

D. employers substitute lower fringe benefits for higher pay, keeping their compensation costs the same.

B. sellers can manipulate market price by causing product scarcities.

AACSB: Analytic Blooms: Level 1 Remember Difficulty: 1 Easy Learning Objective: 01-04 List the categories of scarce resources and delineate the nature of the economizing problem.

Which of the following tactics is most associated with the demand-enhancement union model?

D. allows society to trade by barter.

Tom Atoe grows fruits and vegetables for home consumption.

Since 1980, labor union membership in the United States has been: A. decreasing absolutely but increasing as a percentage of the labor force.

Nominal GDP is: A. the sum of all monetary transactions that occur in the economy in a year.

B. rationality.

B. stock of capital.

Which of the following is a fundamental characteristic of the market system?

C. bilateral monopolist.

B. prohibit employers from discriminating against minority groups in hiring workers.

B. investments in education result in higher earnings.

D. "Those who get utility from them."

C. has been downward because labor's share of the domestic income has fallen.

According to some supporters of the minimum wage, it has very small or even nonexistent negative employment effects because: A. the demand for minimum wage labor is highly elastic.

C. positive changes in inventories.

C. command systems are superior to market systems in the allocation of resources.

D. reduces employment.

Marginal costs exist because: A. the decision to engage in one activity means forgoing some other activity.

D. increasing the price of complementary resources.

D. private ownership of all capital.

Noncompeting groups of workers are the result of: A. geographic immobilities.

The simple circular flow model shows that: A. households are on the selling side of the resource market and on the buying side of the product market.

A. unselfish behavior.

If an exclusive union is successful in restricting the supply of labor, the: A. number of job opportunities in the firm or industry will increase.

A. teachers B. transportation workers C. sales workers D. legal workers

C. What goods and services will be produced?

D. net exports is always a positive amount.

B. wide-spread dispersion of economic power.

C. differences in the innate and acquired abilities of workers.

Construction workers frequently sponsor political lobbying in support of greater public spending on highways and public buildings.

B. a positive relationship between the two.

In the figure above are two linear production possibilities curves for countries Alpha and Beta.

A. Increasing the price of products that are complements for the one it is producing.

If the consumer's money income is $20, which of the following combinations of goods is unattainable?

D. are usually impulsive and unpredictable.

Why are economists concerned about inflation?

D. they feel a higher minimum wage will lower labor's tax payments for welfare programs.

D. the GDP would then have to be deflated for changes in the price level.

B. gross domestic investment exceeds depreciation.

Assume that pizza is measured in slices and beer in pints.

C. tell government which industries need to be subsidized.

C. functions essentially the same as inclusive unionism.

The largest component of national income is: A. interest.

The system that measures the economy's overall performance is formally known as: A. GDP assessment B. Final output and income statistics C. Business cycle measurement D. National income accounting

Economics may best be defined as the: A. interaction between macro and micro considerations.

According to age-earnings data, A. high earnings are due to motivation and innate ability, rather than education.

One reason for this is to: A. increase the elasticity of demand for construction workers.

The presence of market failures implies that: A. individuals and firms should strive to be self-sufficient rather than specialize.

B. laissez-faire capitalism.

C. it reduces turnover among minimum wage workers, prompts employers to use them more efficiently, and thus raises their average productivity.

Also, suppose that this labor force is highly immobile.

Nominal GDP is: A. the sum of all monetary transactions that occur in the economy in a year.

Which of the following is a fundamental characteristic of the market system?

D. understate economic welfare because it includes expenditures undertaken to offset or correct pollution.

When economists say that people act rationally in their self interest, they mean that individuals: A. look for and pursue opportunities to increase their utility.

The economizing problem is one of deciding how to make the best use of: A. virtually unlimited resources to satisfy virtually unlimited wants.

C. functions essentially the same as inclusive unionism.

B. is used to circumvent the problem of a lack of coincidence of wants among potential buyers and sellers.

C. empirical testing of value judgments through the use of logic.

D. it promotes specialization by overcoming the problems with barter.

For economists, the word "utility" means: A. versatility and flexibility.

The fact that the major indicator of enterprise success in the Soviet Union and pre-reform China was the quantity of output implied that: A. product quality was neglected.

B. cannot be determined from available data on nominal wages and the price level.

National income accountants can avoid multiple counting by: A. only counting final goods.

D. employers substitute lower fringe benefits for higher pay, keeping their compensation costs the same.

A. Which products will be in scarce supply and which in excess supply?

D. reduces employment.

C. conflicts with policies designed to equalize the distribution of income.

Barter: A. entails the exchange of goods for goods.

C. increase the price of substitute inputs.

If an exclusive union is successful in restricting the supply of labor, the: A. number of job opportunities in the firm or industry will increase.

Real wages in the United States in the long run: A. have increased slower than increases in output per worker.

The economist's analysis in this case incorporates the idea of: A. opportunity costs.

C. the law of diminishing returns.

C. keeps inefficient producers in business.

According to the concept of the "invisible hand," if Susie opens and operates a profitable childcare center, then: A. this demonstrates that consumer sovereignty is not present in this market.

D. understate economic welfare because it includes expenditures undertaken to offset or correct pollution.