ECON 201A Final Exam

Which of the following would not shift the demand curve for beef?

A reduction in the price of cattle feed.

Suppose the price of good X increases. If X and Y are substitutes, then, in the market for good Y, we would expect:

An increase in both the equilibrium price and quantity.

If cookies are a normal good and incomes increase, we would expect:

An increase in equilibrium price and equilibrium quantity.

Which of the following lists includes only capital resources ?

Autos owned by a car rental firm; computers at the Hertz car rental agency; the vans that shuttle rental customers to and from the airport

Two months ago, the Maryville Shirt company sold 2000 shirts at $30 per shirt. Last month the company raised its price to $35 per shirt and sold 3000 shirts. Evidently the company experienced a(n):

Increase in demand

GDP deflator

Nominal GDP/Real GDP x 100

Sue wants to buy the latest novel by her favorite author. The economic perspective suggests that Sue will buy the book if:

The marginal benefit of the book the is more than its marginal cost

What is median income?

The middle income of the range of U.S. incomes

Which of the following will not produce an outward shift of the production possibilities curve?

The reduction of unemployment

Which of the following exemplifies a microeconomic question?

Will a new type of electronic reader or tablet increase the number of buyers

In the past few years, the demand for donuts has greatly increased. This increase in demand might best be explained by:

a change in buyer tastes.

microeconomic

choices made by individual firms and industries

human capital

culinary school

A demand curve:

indicates the quantity demanded at each price in a series of prices.

Answer the question on the basis of the data given in the following production possibilities table: Refer to the table. For these data, the law of increasing opportunity costs is reflected in the fact that:

larger and larger amounts of capital goods must be sacrificed to get additional units of consumer goods.

land

lettuces and fresh vegetables

real GDP

nominal GDP/price index/100

real income

nominal revenue/price

Joey sold a gold coin for $1,000 that he bought a year ago for $1,000. He says, "At least I didn't lose any money on my financial investment." His economist friend points out that in effect he did lose money because he could have received a 3 percent return on the $1,000 if he had bought a bank certificate of deposit instead of the coin. The economist's analysis in this case incorporates the idea of:

opportunity costs`

physical capital

oven and gas range

future value

present value x (1+g)^n (g=growth rate % and n=number of periods)

The law of demand states that, other things equal:

price and quantity demanded are inversely related.

are enacted when discontented sellers, feeling that prices are too low, appeal to legislators to keep prices from falling.

price floors

The downward slope of the demand curve again illustrates the pattern that as rises, decreases.

price, quantity demanded

Allocative efficiency is concerned with:

producing the combination of goods most desired by society.

Other things equal, if the price of a key resource used to produce product X falls, the:

product supply curve of X will shift to the right.

When economists say that people act rationally in their self-interest, they mean that individuals:

pursue opportunities to increase their utility

refers to the total number of units that are purchased by consumers at a specific price.

quantity demanded

When economists talk about supply, they are referring to a relationship between price received for each unit sold and the

quantity supplied

factors of production

resources used to make goods and services

entrepreneurial ability

restaurant owner

If the price is below the equilibrium level, then the quantity demanded will exceed the quantity supplied. This is known as

shortage

Refer to the graph below depicting the marginal benefit and marginal supply for water shoes (the waterproof type you can go tiding pooling in without cutting your feet.) If the current output of shoes is Q1, then:

society would consider additional units of shoes to be more valuable than alternative uses of those resources

macroeconomics

studies the economy as a whole

An increase in the excise tax on cigarettes raises the price of cigarettes by shifting the:

supply curve for cigarettes leftward

Even though local newspapers are very inexpensive, people rarely buy more than one of them each day.This behavior can best be explained as

the marginal benefit of reading a second newspaper is less than the marginal cost

If there is a shortage of product X, and the price is free to change:

the price of the product will rise.

The process of observing real-world behavior, developing hypotheses, testing them against facts, then using the results to construct theories is called:

the scientific method

When the price of a product rises, consumers with a given money income shift their purchases to other products whose prices are now relatively lower. This statement describes:

the substitution effect

A severe freeze has once again damaged the Florida orange crop. The impact on the market for orange juice will be a leftward shift of:

the supply curve

If new manufacturers enter the computer industry, then

the supply curve shifts to the right.

GDP is

the value of all final goods and services produced domestically.

According to the law of supply:

there is a direct relationship between price and the quantity supplied.

labor

waiters and waitresses

Next, over ten years, how much more will an Associates Degree earn? What would you do with this additional money?

weekly median income) x 52 = Annual median income(Annual Median Income with Associates Degree) - (Annual Median Income High School Diploma ) = Annual differenceAnnual difference x 10 = Ten year difference in earnings

Refer to the answer for Billie in the previous question. If Billie had bought the used iPhone for $90, her consumer surplus would have been___ dollars.

$110 (200-90)

Billie buys a used iPhone for $120 and has a consumer surplus of $80. What was her maximum willingness to pay?

$200

growth formula

((real GDP year 2 - real GDP year 1)/real GDP year1) x 100%

Brianna says that "gas prices are rising because there aren't enough oil refineries." Claire argues that "gas prices are rising because of the growing demand for gasoline in the U.S." We can conclude that:

Both statements are positive

What are the economic goals of the United States?

Economic growth, low unemployment and low inflation

If an increase in the price of Good X causes a decrease in the demand for Good Y, we can conclude that:

Goods X and Y are complement goods.

Nominal GDP equation

Price x Quantity

The approximate real GDP estimate for 2019 is $19 trillion dollars. Some economists argue that the United States as a mature economy has a new, lower average growth rate of 1.2%. Using this date and the growth equation preceding this question, estimate the size of the U.S. real GDP when the average college student will retire (assuming five years of school and a 30 year career, therefore in 35 years.) Report your answer in trillions and to the nearest tenth. (For example if your answer is $20.4444 trillion, input your answer as 20.4

Recall the equation used is (original amount) x (1 + growth rate in decimal form) to the number of years power. For this problem $19 trillion x (1.012) to the 35th power. Therefore, $19 trillion x (1.51816) = 28.8

Which of the following is a positive economic statement?

Stock prices rose to new record in the last month for the fourth month in a row (fact); normative statement=opinion

Consider the market for oranges. Suppose that both of the following occur simultaneously: (i) the price of apples (a substitute for oranges) decreases; and (ii) world-wide droughts reduce the harvest of oranges by 30%. Then, in the market for oranges we would expect:

The equilibrium price of oranges could either increase or decrease, but equilibrium quantity will definitely decrease.

The shift of the budget line from cd to ab in the figure is consistent with:

a decrease in money income

After widespread press reports about the dangers of contracting "mad cow disease" by consuming beef from Canada, the likely economic effect on the U.S. demand curve for beef from Canada is:

a shift of the demand curve for beef to the left.

rational self interest

assumption that humans will make choices to maximize their utility

An economist for a bicycle company predicts that, other things equal, a rise in consumer incomes will increase the demand for bicycles. This prediction assumes that:

bicycles are normal goods.

Suppose that Juanita receives a $20 gift card for the local coffee shop, where she only buys lattes and scones. If the price of a latte is $4 and the price of a scone is $2, then we can conclude that Juanita:

can buy 5 lattes or 10 scones if she chooses to buy only one of the two goods

The is the only price where quantity demanded is equal to quantity supplied.

equilibrium price

economic cost

explicit+implicit costs (direct + opportunity costs)

Which of the following would reduce the supply of microcomputers?

higher wage rates for the workers that assemble the computers