Trade Agreement – Principles of Macroeconomics Final Exam

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Trade Agreement, Tax, Poor Fuel Economy, Principles of Macroeconomics Final Exam

The key terms in this Principles of Macroeconomics course include Trade Agreement, United States, Vietnam, Tax, Poor Fuel Economy, Cost, Additional Labor, Additional Benefit, Additional Cost, Principles of Macroeconomics Final Exam


If the United States creates a trade agreement with Vietnam, we know that

Vietnam can get no benefit, since its workers are not as productive as the United States’.

Vietnam will benefit, but trade with a less developed, Third World country will not help the United States.

physical and cultural differences between the two countries are too great to benefit from trade.

Vietnam and the United States can both benefit.

Vietnam can get no benefit, since its businesses have less capital than the United States’.


A new tax on gasoline causes a reduction in the purchase of new vehicles with poor fuel economy. This is an example of what type of incentive?

negative direct

positive direct

positive indirect

The tax does not provide an incentive.

negative indirect


Decision makers engage in marginal thinking by

ignoring benefits, which are a subjective determination.

comparing the sum of the cost and benefit of all units produced.

comparing the average cost and benefit of all units produced.

comparing the benefit of one additional unit with its cost to produce.

focusing on mass production, which often keeps costs down.


Shoppers at supermarkets often abandon their empty shopping carts at various locations in the parking lot, despite the risk of damage to vehicles or the additional labor cost of retrieving those carts. How might an economist explain this behavior?

The perceived potential benefit of going to a cart return location is less than the time and energy cost to the shopper.

People are generally lazy and gravitate toward any decision with the lowest cost.

Once a shopper leaves the parking lot, the abandoned cart becomes someone else’s problem.

People go to the supermarket when they have the energy to shop only, without considering the cost of returning their carts.

Because food prices are always subsidized by the government, shoppers are ignorant of additional costs.


If the United States creates a trade agreement with Vietnam, we know that

Vietnam can get no benefit, since its workers are not as productive as the United States’.

Vietnam will benefit, but trade with a less developed, Third World country will not help the United States.

physical and cultural differences between the two countries are too great to benefit from trade.

Vietnam and the United States can both benefit.

Vietnam can get no benefit, since its businesses have less capital than the United States’.


A new tax on gasoline causes a reduction in the purchase of new vehicles with poor fuel economy. This is an example of what type of incentive?

negative direct

positive direct

positive indirect

The tax does not provide an incentive.

negative indirect


Decision makers engage in marginal thinking by

ignoring benefits, which are a subjective determination.

comparing the sum of the cost and benefit of all units produced.

comparing the average cost and benefit of all units produced.

comparing the benefit of one additional unit with its cost to produce.

focusing on mass production, which often keeps costs down.


Shoppers at supermarkets often abandon their empty shopping carts at various locations in the parking lot, despite the risk of damage to vehicles or the additional labor cost of retrieving those carts. How might an economist explain this behavior?

The perceived potential benefit of going to a cart return location is less than the time and energy cost to the shopper.

People are generally lazy and gravitate toward any decision with the lowest cost.

Once a shopper leaves the parking lot, the abandoned cart becomes someone else’s problem.

People go to the supermarket when they have the energy to shop only, without considering the cost of returning their carts.

Because food prices are always subsidized by the government, shoppers are ignorant of additional costs.