Suppose that the typical consumer basket consists of 10 bushels of peaches and 15 bushels of pecans and that the base year is 2000

If a nation has an absolute advantage in the production of a good,

it can produce that good using fewer resources then its trading partner

Which goods will a nation typically import?

those goods in which the nation has a comparative advantage

Canada and the U.S. both produce wheat and computer software. Canada is said to have comparative advantage in producing wheat if

the opportunity cost of producing a bushel of wheat is lower for Canada than it is for the U.S.

Please use the data provided below to answer this and the following question:

Which of the statements is true?

Australia has an absolute advantage in the production of both food and electronics

Korea should

specialize in electronics production, export electronics, and import food

In a competitive market, the price of the product

none of the above

A market is a

group of demanders and suppliers of a particular good or service

The law of supply clearly states that

an increase in price of the product leads to an increase in quantity supplied, other things equal

Suppose rose are currently selling for $40 per dozen, but the equilibrium prose of roses is $30 per dozen.  We would expact

surplus to exist and the market price of roses to decrease

Suppose roses are currently selling for $40.00 per dozen. The equilibrium price of roses is $30.00 per dozen. We would expect a

surplus to exist and the market price of roses to decrease

What would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean pickers fell and the price of tea fell?

price will fall and the effect on quantity is ambiguous

Which of the following is the correct definition of GDP?

none of the above are correct

Which of the following is not included in GDP?

market value of vegetables grown in your garden

If the price of a hot dog is $2 and the price of a hamburger is $4, then 30 hot dogs contribute as much to GDP as_____ hamburgers

15

The value of housing service provided by the economy’s stock of houses is

counted and is based on an estimate of its rental value

Over the last few decades Americans have chosen to cook less at home and eat more at restaurants. This change in behavior, by itself,

increased measured GDP

Which of the following transactions added to U.S. GDP in 2010?

your friend bought a new house which, according to reliable estimates, could be rented for $1,500 a month

An Italian company operates a pasta restaurant in San Francisco. The value of the output produced by this pasta restaurant is included in:

U.S. GDP only

Which is the largest component of GDP?

consumption

Which of the following examples of household spending is categorized as investment rather than consumption?

expenditures on new housing

Real GDP

evaluates current production at the prices that prevailed in some specific year in the past

When economists talk about growth in the economy, they measure that growth with the

percentage change in real GDP

Suppose GDP consists of wheat and rice. In 2002, 20 bushels of wheat are sold at $4 per bushel, and 10 bushels of rice are sold at $2 per bushel. If the price of wheat was $2 per bushel and the price of rice was $1 per bushel in 2001, the base year, nominal 2002 GDP is

$100, real 2002 GDP is $50, and the GDP deflator is 200

If a country reported a nominal GDP of 85 billion in 2002 and 100 billion in 2001 and reported a GDP deflator of 100 in 2002 and of 105 in 2001, then from 2001 to 2002 real output

and prices both fell

The term "inflation" is used to describe a situation in which

the overall level of prices in the economy is increasing

The CPI is a measure of the overall cost of

goods and services bought by a typical consumer

Please use the data provided below to answer this and the following question:

Suppose that the typical consumer basket consists of 10 bushels of peaches and 15 bushels of pecans and that the base year is 2000. What is the consumer price index for 2001?

120

What was the inflation rate in 2001?

20 percent

According to economic studies CPI

overstates inflation

The largest component in the basket of goods and services used to compute the CPI is

housing