ECON FINAL

(Table: Production Possibilities Schedule I) Use Table: Production Possibilities Schedule I. The opportunity cost of producing the fourth plane is _____ trains. Alternatives: A B C D E F Planes Produced: 0 1 2 3 4 5 Trains Produced: 30 28 24 18 10 0 a. 2 b. 4 c. 6 d. 8

D

Question 10. see graph

See Graph (A)

1. Scarcity occurs in economics because: a. we often do not have sufficient resources to achieve our objectives. b. the wants of individual consumers are limited. c. there are poor people even in rich countries. d. taxes keep prices higher than they would otherwise be

A

14. Which factor would shift the aggregate demand curve to the LEFT? a. monetary policy that raises the interest rate b. an increase in the aggregate price level c. an increase in consumer wealth d. stronger consumer optimism about income

A

16. In the local market for coffee, if a newly opened Starbucks competes with two local coffee shops (the Java Joint and Cup O Joe), the _____ curve shifts to the _____. a. supply; right b. demand; left c. supply; left d. demand; right

A

21. Which item would NOT be part of GDP? a. used car sales b. new residential construction c. a new truck purchased by a building contractor d. cable TV service purchased for a home

A

25. (Table: The Consumer Price Index) Use Table: The Consumer Price Index. The approximate rate of inflation in year 3 is: Year Consumer Price Index 1 80 2 (base year) 100 3 105 4 125 5 150 a. 5%. b. 10%. c. 19%. d. 20%.

A

26. Inflation can be measured by the: a. percentage change in the consumer price index. b. absolute change in the consumer price index. c. absolute change in the GDP deflator. d. percentage change in GDP.

A

31. The Republic of Livonia has an adult population of 100 million; 60% of Livonia's population is employed, and 10% of the people are unemployed. The labor force participation rate in Livonia is _____%. a. 70 b. 60 c. 7 d. 10

A

35. A negative supply shock leads to a(n) _____ in aggregate output and a(n) _____ in the aggregate price level. a. reduction; increase b. increase; reduction c. reduction; reduction d. increase; increase

A

23. If real GDP rises while nominal GDP falls, then prices on average have: a. risen. b. fallen. c. stayed the same. d. decreased and then been offset by an equal increase.

B

30. A survey reveals that, on a small island, 40 people have jobs, 10 people are not working but are looking for jobs, and 30 people are neither working nor looking for work. The unemployment rate on the island is _____%. a. 12.5 b. 20 c. 25 d. 50

B

32. Jayden has a part-time job. He would prefer to have a full-time job but has been unable to find one. Jayden is classified as: a. a discouraged worker. b. underemployed. c. unemployed. d. out of the labor force

B

11. A shift of the demand curve for fried chicken would NOT be caused by a change in: a. income. b. the price of fried chicken. c. the price of pizza. d. the popularity of fried chicken.

B

12. If spaghetti and meatballs are complements, when the price of spaghetti rises, the demand curve for meatballs: a. shifts to the right. b. shifts to the left. c. is unaffected. d. shifts to the right and then moves back.

B

13. The demand for bottled water decreases at a time when people believe bottled water prices will soon fall. The change in demand is most likely attributable to a change in: a. income. b. consumer expectations. c. consumer preferences. d. prices of other goods.

B

17. Gross domestic product is the value of all _____ produced in an economy over a given period. a. goods and services b. final goods and services c. intermediate goods and services d. consumer goods and services

B

33. Last week, Saanvi quit her job as a copywriter at an advertising agency. She has spent the past few days browsing the help-wanted ads but hasn't found anything that matches her skills. Saanvi is BEST classified as: a. structurally unemployed. b. frictionally unemployed. c. a discouraged worker. d. out of the labor force.

B

The law of demand implies that: a. consumers will buy more at higher prices. b. consumers will buy more at lower prices. c. sellers will offer more on the market at lower prices. d. sellers will offer less on the market at higher prices.

B

6. Fiscal policy that decreases aggregate demand is: a. balanced. b. supplemental. c. contractionary. d. expansionary.

C

20. In 2019, consumer spending was $7,000, government purchases of goods and services was $2,500, and investment spending was $1,500. If GDP for 2019 was $10,300, exports were _____ and imports were _____. a. $800; $100 b. $100; $200 c. $100; $800 d. $500; $300

C

27. You read in the newspaper that the consumer price index for 2019 is 120. You conclude that a typical market basket in 2019 would have cost _____ more than the same market basket purchased in _____. a. 20%; 2010 b. 120%; 2010 c. 20%; the base year d. 120%; the base year

C

29. You are a college student and NOT working or looking for work. You are: a. unemployed. b. in the labor force but unemployed. c. not part of the labor force. d. counted in the labor force as underemployed.

C

34. Ibraham quit his job in retail management and moved to Florida with his partner, a physician who has now opened a new practice there. He is not successful in his job search in the first four months in his new location. Ibraham's unemployment is: a. structural. b. cyclical. c. frictional. d. seasonal.

C

36. A decrease in aggregate demand will generate _____ in real GDP and _____ in the price level in the short run. a. an increase; no change b. a decrease; no change c. a decrease; a decrease d. no change; an increase

C

10. (Table: Matcha Tea and Coho Salmon Production Possibilities II) Use Table: Matcha Tea and Coho Salmon Production Possibilities II. This table shows the maximum amounts of matcha tea and Coho salmon, both measured in pounds, that Colombia and Washington can produce if each produces just one good. Washington has an absolute advantage in the production of: Matcha Tea Coho Salmon Colombia 40 20 Washington 10 10 a. matcha tea only. b. Coho salmon only. c. both matcha tea and Coho salmon. d. neither matcha tea nor Coho salmon.

D

22. The inflation-adjusted measure of aggregate output typically used by economists is called: a. aggregate output. b. nominal gross national product. c. net domestic product. d. real gross domestic product

D

28. Assume that the consumer price index is 72.6 for 2018 and 82.4 for 2019. What was the inflation rate between these two years? a. 0.88% b. 9.8% c. 11.9% d. 13.5%

D

3. Delaware schools offered cash bonuses to students who scored high on the state's standardized exams (Delaware Comprehensive Assessment System, or DCAS). The cash bonuses are motivated by which economic principle? a. Choices are necessary because resources are scarce. b. The true cost of something is its opportunity cost. c. "How much" is a decision at the margin. d. People usually respond to incentives, exploiting opportunities to make themselves better off.

D

37. Which of the following exemplifies an expansionary fiscal policy? a. an increase in the money supply that decreases interest rates b. an increase in taxes that reduces the budget deficit and decreases consumption c. a decrease in government spending d. an increase in unemployment benefits

D

38 see graph

See graph (A)

Question 19 see graph

See graph (A)

Question 8 see graph

See graph on sheet (B)

24. see graph

See table (D)

40 see graph

see graph (C)

39 see graph

see graph (D)

4. Increases in total output realized when individuals specialize in particular tasks and trade are known as: a. gains from trade. b. the profits obtained from sales of a good or service. c. marginal analysis in the field of specialization. d. a trade-off between labor and capital.

A

18. An intermediate good would be: a. a new boat to be used for vacations. b. lumber used to build a house. c. payments to military personnel. d. a professor's salary.

B

2. For an economist, the cost of a good is: a. the dollar amount of money you paid to get it. b. what you gave up to get it. c. always equal to the true market value of the good. d. the quantity of resources used to produce it.

B

5. Roommates Samara and Zendaya are hosting a Christmas party and have to make snacks for their guests and ornaments for themselves. Samara and Zendaya know that to finish both tasks as quickly as possible, each should focus on just one task, but they don't know who should do what. Samara and Zendaya should determine which roommate: a. has the absolute advantage in preparing snacks. b. has the comparative advantage in preparing snacks. c. can make the most snacks in a given amount of time. d. can make all the snacks in the least amount of time.

B