Study guide


midterm 1 m72108


____  1.    Suppose a tax of $W per unit is imposed on a good, and the tax causes the equilibrium quantity of the good to decrease from X units to Y units. The tax decreases consumer surplus by $Z and it decreases producer surplus by $V. The deadweight loss of the tax is


____  2.    Deadweight loss is or means the


____  3.    If the goods market is highly competitive and the markets for labor and capital goods are highly competitive, where does the producer surplus go? 


____  4.    The deadweight loss from a tax depends on what?


____  5.    For Henry George's land-tax argument to be valid, the land that is taxed must be


____  6.    Suppose that in 2007 an apartment complex converts to a condominium built in 2006, where the renters are now owners of their former apartments.

Was the rent in GDP, and is the purchase of a unit in GDP?


____  7.    Anna, a U.S. citizen, works only in Germany. The value added to production from her employment is included in which accounts?


____  8.    A farmer produces the same output in 2004 as in 2003. His input prices increase by 50 percent, but so does his product price. We can conclude that his well being has increased, decreased, stayed the same, or we don’t know?


____  9.    GDP is used as the basic measure of a society's economic well-being. A better measure of the economic well-being of individuals in society is obtained if


____  10.   Suppose that over the last twenty-five years a country's nominal GDP grew to X times its former size. In the meantime population grew Y percent and prices rose Z percent. What happened to real GDP per person?


____  11.   Consumers begin purchasing houses incorporating steel studs instead of wooden studs after the price of lumber increases. This situation best represents which problem in the construction of the CPI?


____  12.   An increase in the price of domestically produced industrial robots, with no other changes in the economy, will be reflected in which indexes?


____  13.   The real interest rate tells you


____  14.   Both Tom and Jerry work eight hours a day. Tom can produce six baskets of goods per hour while Jerry can produce four baskets of the same goods per hour. It follows that Tom's productivity is what relative to Jerry’s?


____  15.   If your firm has constant returns to scale, then if you doubled all your inputs your firm's output would


____  16.   Using the production function and notation in the text, K/L measures


____  17.   If a country were to increase its saving rate, in the long run it would also increase its


____  18.   If capital goods depreciate at a rate of X percent per year, and people save Y percent of their income, and the total value of capital goods equals GDP, then the increase in the stock of capital goods is what, or can it not be determined?


____  19.   The honorable Economic Development Minister of a country in eastern Europe has a list of things she thinks may explain her country's low growth of real GDP per person relative to other countries. She asks you to pick the one you think most likely explains her country's low growth, or maybe all of them. Which of the following contributed to low growth?


____  20.   If the James Company sells bonds, it is doing what?


____  21.   In a closed economy, private saving is what or related to what?


____  22.   The source of the supply of loanable funds


____  23.   The slope of the demand for loanable funds curve represents the


____  24.   Investment rises and interest rates fall. Which of the following could explain these changes?