Econ Final - Odd chapters

Accumulating capital a. requires that society sacrifice consumption goods in the present. b. allows society to consume more in the present. c. decreases saving rates. d. involves no tradeoffs.

A

Inventors often obtain patents on new products and processes, thereby turning new ideas into a. private goods and increasing the incentive to engage in research. b. private goods but decreasing the incentive to engage in research. c. public goods and increasing the incentive to engage in research. d. public goods but decreasing the incentive to engage in research.

A

Nominal GDP will definitely increase when a. prices increase and output increases. b. prices increase and output decreases. c. prices decrease and output increases. d. All of the above are correct.

A

The money supply decreases if a. households decide to hold relatively more currency and relatively fewer deposits and banks decide to hold relatively more excess reserves and make fewer loans. b. households decide to hold relatively more currency and relatively fewer deposits and banks decide to hold relatively fewer excess reserves and make more loans. c. households decide to hold relatively less currency and relatively more deposits and banks decide to hold relatively more excess reserves and make fewer loans. d. households decide to hold relatively less currency and relatively more deposits and banks decide to hold relatively less excess reserves and make more loans.

A

Which of the following are human capital and physical capital, respectively? a. for an accounting firm: the accountants' knowledge of tax laws and computer hardware b. for a grocery store: grocery carts and shelving c. for a school: chalkboard and desks d. for a library: the building and the reference librarians' knowledge of the Internet

A

Which of the following is not included in U.S. GDP? a. The market value of an oil change that Ben performs on his own car. b. The market value of an oil change at Speedy Lube. c. The market value of oil purchased by Ben. d. Production of foreign citizens living in the United States that work in an oil packaging facility.

A

Which type of money has intrinsic value? a. commodity money b. fiat money c. both commodity money and fiat money d. neither commodity money nor fiat money

A

A nation's standard of living is best measured by its a. real GDP. b. real GDP per person. c. nominal GDP. d. nominal GDP per person.

B

In a fractional-reserve banking system, an increase in reserve requirements a. increases both the money multiplier and the money supply. b. decreases both the money multiplier and the money supply. c. increases the money multiplier, but decreases the money supply. d. decreases the money multiplier, but increases the money supply.

B

Net exports equal a. exports plus imports. b. exports minus imports. c. imports minus exports. d. GDP minus imports.

B

Paper dollars a. are commodity money and gold coins are fiat money. b. are fiat money and gold coins are commodity money. c. and gold coins are both commodity monies. d. and gold coins are both fiat monies.

B

Sandra uses her sewing machine, thread, and yards of denim to produce jean skirts. The sewing machine is an example of​ a. ​labor. b. physical ​capital. c. ​human capital. d. ​natural resources.

B

The deadweight loss associated with a monopoly occurs because the monopolist a. maximizes profits. b. produces an output level less than the socially optimal level. c. produces an output level greater than the socially optimal level. d. equates marginal revenue with marginal cost.

B

The existence of money a. reduces specialization. b. makes trade easier. c. allows for barter. d. hinders production.

B

Tom is an organic gardener. For several years, he produced only for his own consumption. Last year, he sold his vegetables at a farmer's market. This year, he sold all of his vegetables to a company producing organic vegetable soup. When is the value of Tom's vegetables included in GDP? a. ​None of his production is included in GDP, since it is considered home production. b. ​Only when he sells his vegetable at the farmer's market. c. ​Only when he sells his vegetables to the organic soup company. d. When he sells his vegetables at the farmer's market and when he sells the vegetables to the organic soup company.

B

When prisoners use cigarettes or some other good as money, cigarettes become a. commodity money, but do not function as a unit of account. b. commodity money and function as a unit of account. c. fiat money, but do not function as a unit of account. d. fiat money and function as a unit of account.

B

A bank which must hold 100 percent reserves opens in an economy that had no banks and a currency of $150. If customers deposit $50 into the bank, what is the value of the money supply? a. $50 b. $100 c. $150 d. $200

C

A government-created monopoly arises when a. government spending in a certain industry gives rise to monopoly power. b. the government exercises its market control by encouraging competition among sellers. c. the government gives a firm the exclusive right to sell some good or service. d. Both a and c are correct.

C

Commodity money is a. backed by gold. b. the principal type of money in use today. c. money with intrinsic value. d. receipts created in international trade that are used as a medium of exchange.

C

If a pharmaceutical company discovers a new drug and successfully patents it, patent law gives the firm a. partial ownership of the right to sell the drug for a limited number of years. b. partial ownership of the right to sell the drug for an unlimited number of years. c. sole ownership of the right to sell the drug for a limited number of years. d. sole ownership of the right to sell the drug for an unlimited number of years.

C

Monopolies use their market power to a. charge prices that equal minimum average total cost. b. increase the quantity sold as they increase price. c. charge a price that is higher than marginal cost. d. dump excess supplies of their product on the market.

C

Two economists found empirical evidence that when the price of rice decreased in the Hunan province of China, local residents consumed less rice than before the price decrease. The study provides a real-world example of a(n) a. normal good. b. inferior good that is not a Giffen good. c. Giffen good. d. luxury good.

C

Unemployment compensation is a. part of GDP because it represents income. b. part of GDP because the recipients must have worked in the past to qualify. c. not part of GDP because it is a transfer payment. d. not part of GDP because the payments reduce business profits.

C

Without price discrimination, the monopolist sells every unit at the same price. As a consequence, Question 5Select one:a. marginal revenue is equal to price. b. marginal revenue is equal to average revenue. c. price is greater than marginal revenue. d. Both a and b are correct.

C

Educated people may generate ideas that increase production. These ideas a. produce a return to society from education that is greater than the return to the individual. b. could justify government subsides for education. c. are external benefits of education. d. All of the above are correct.

D

Productivity a. is nearly the same across countries, and so provides no help explaining differences in the standard of living across countries. b. explains very little of the differences in the standard of living across countries. c. explains some, but not most of the differences in the standard of living across countries. d. explains most of the differences in the standard of living across countries.

D

Transfer payments a. are payments that flow from government to households. b. are not made in exchange for currently produced goods or services. c. alter household income, but they do not reflect the economy's production. d. All of the above are correct.

D

Which of the following is an example of commodity money? a. ​Rare baseball cards b. ​Euros c. ​Stocks d. ​The gold standard

D

Which of the following is included in the consumption component of GDP? a. household purchases of appliances. b. household purchases of medical care. c. household purchases of food. d. All of the above are included in the consumption component of GDP.

D

​When prices rise, a. real estate is a better unit of account than money. b. money is a worse medium of exchange than real estate. c. ​money is a better store of value than real estate. d. ​real estate is a better store of value than money.

D