Macroeconomics Spring Final

A characteristic of centrally planned economies is that: a. The price is relatively unimportant in allocating resources b. Output reflects the pattern of consumer spending c. Income is fairly distributed among individuals d. There are many incentives for innovation and hard work

A.

A point on the production possibilities curve is: a. Attainable and resources are fully employed b. Attainable, but resources are employed c. Unattainable, but resources are unemployed d. Unattainable and resources are fully employed

A.

In the circular flow model, households earn their incomes in the: a. Resource markets b. Product markets c. Capitalist markets d. Money markets

A.

The centrally planned system used by the former Soviet Union and pre-reform China lacked: a. Entrepreneurship b. Production targets c. Allocation by directive d. Government price setting

A.

The economies of Ireland and France are: a. Similar in that they are both basically command systems b. Similar in that they are both basically market systems c. Different in that Ireland has a command system while France has a market system d. Different in that France has a command system while Ireland has a market system

A.

When studying human behavior, economists assume rational self-interest. This means that: a. People make decisions based on some desired results b. People are quite selfish, and are not concerned about others c. People always make the right decisions d. People have all the information they need to make a decision

A.

Which would not be considered as a capital resource be an economist? a. A van used by a mother to transport the family around b. An office computer used by an accountant c. A crane used by a building contractor d. A razor used by a barber

A.

Which is an illustration of macroeconomic question? a. Should the salaries of financial be regulated by the government? b. Are increasing wage demand by workers contributing to price inflation? c. What is the least costly way to produce automobiles and trucks in the United States? d. Will the introduction of a new computer chip change the demand for computers?

B.

All of the following would affect the position of a country'e production possibilities curve, except: a. The amount of labor available b. The level of unemployment c. The amount of the capital stock d. Technological progress

B.

Economist would classify all of the following as land except: a. Two thousand acres of virgin forest b. A hydroelectric dam c. Crude oil reserves d. Iron ore deposits

B.

Refer to the above figure. If box A represents households, B the product market, and C businesses, and is flow (3) represent revenues, then (4) would represent ____ while flow (5) would represent____. a. Resources: goods and services b. Goods and services: resources c. Costs: resources d. Goods and services: costs

B.

Refer to the above table. The total opportunity cost of the three units of tank is: a. 200 units of autos b. 350 units of autos c. 650 units of autos d. 1000 units of autos

B.

The ceterisparibus assumption is employed in economic analysis to: a. State economic goals b. Simplify the complex world c. Evaluate an economic system d. Approximate real-world conditions

B.

The posthoc, ergo propter hoc fallacy consists of: a.. Using an example to prove a different point b. Inferring causality from chronological sequence c. Jumping to conclusions from an inadequate number of cases d. Arguing for or against the person rather that the position being supported

B.

If economic resources are perfectly interchangeable between the two products shown on a production possibilities graph: a. The economy will always be at full employment b. More of one product can be produced without producing less of the other product c. The production possibilities curve would be straight line d. The two production are equal value to the economy

C.

If the total costs of producing 1,500 units of output is $15,000 and this output sold to consumers for $16,5000, then the firm would earn profits of: a. $1,000 b. $16,5000 c. $1,500 d. $15,000

C.

McDonald's introduced the "Big Mac" in 1968 and it turned out to be a hit, but the "Arch Deluxe" introduced in 1996 was not. The success or failure of a product in the market system is determined by: a. Capitalism and entrepreneurship b. Specialization and exchange c. Consumer sovereignty and dollar votes d. Capital goods and roundabout production

C.

Opportunity cost is best defined as: a. Marginal cost minus marginal benefit b. The time spent on an economic activity c. The value of the best forgone alternative d. The money cost of an economic decision

C.

Refer to the above table. In moving from possibility C to D, the cost of a tank in terms of autos is: a. 50 b. 100 c. 200 d. 300

C.

The idea in economics that "there is no free lunch" means that: a. Businesses would go bankrupt if they offered free lunches b. The thought of free lunch is often better than the reality of consuming it c. There are opportunity costs involved when scarce resources are used up for free lunches d. Businesses use free lunches to attract customers but this advertising practice is inefficient

C.

The production possibilities curve represents: a. The maximum amount of labor and capital available for production b. The combinations of goods and services among which consumers are indifferent c. The maximum combinations of products that can be produces with fixed resources and technology d. The maximum rate of growth of capital and labor in an economy over time

C.

Which of the following is considered as an economic resource? a. The ice cream that kids buy at the ice cream parlor b. The TV sets in people's homes c. The land that are designated as national parks by the government c. The shoppers at the mall

C.

Which question is an example of a macroeconomics question? a. What is the level of industrial concentration in the US automobile industry? b. What economic incentives can be used to reduce the cost of health care in the nation? c. What policies would be recommended for stimulating nation economic growth? d. What market conditions are expected for milk in the nation this year?

C.

Which question is an illustration of a macroeconomic question? a. Is a business unresponsive to the demands of consumers? b. Is a consumer boycott an effective means of reducing product prices? c. Is the level of employment in the economy sensitive to the quantity of consumer spending? d. Are oil companies engaging in a rip-off of the consumer by charging exorbitantly high prices for gasoline?

C.

Which would be a normative economic statement? a. The poverty rate hit a new high last year b. Prices are increasing at a rate of 3 percent a year c. THis administration needs to raise taxes to pay for childcare programs d. Retail sales were flat last month and continue on their downward trend

C.

On a production possibilities curve, the single optimal or best combination of out put for any society: a. Is at a point near the top of the curve b. Is at the precise midpoint of the curve c. Is at a pint near the bottom of the curve d. Depends upon the preferences of society

D.

One element of the command system is: a. Capitalism b. Free markets c. Private ownership d. Central planning

D.

The economising problem is essentially one of deciding how to make the best use of: a. Limited resources to satisfy limited economic wants b. Unlimited resources to satisfy unlimited economic wants c. Unlimited resources to satisfy limited economic wants d. Limited resources to satisfy unlimited economic wants

D.

The role of an assumption in an economic theory is to: a. Add realism b. Prove the theory c. Cover special cases d. Simplify the theory

D.

The term dollar votes in a market system means: a. Inflation will occur if consumers don't spend wisely b. Voter may be offered dollars to help elect certain political candidates c. Government is responsible for determining what will be considered legal tender d. Consumers vote for certain products by how they spend their incomes

D.

When a state government chooses to build more roads, the required resources are no longer available for spending on public education. This dilemma illustrates the concept of: a. Production expenses b. Unemployment issues c. Unintended consequences d. Opportunity cost

D.

When an economist says that there is, "too much of a good thing," the economist is suggesting that: a. Economic goals are conflicting b. Economic goals are complementary c. The marginal cost of the thing is less that the marginal benefit d. The marginal benefit of the thing is less than the marginal cost

D.

Which expression is another way of saying "marginal benefit"? a. Benefits given up b. Unintended gain c. Employment benefits d. Extra benefit

D.

Which of the following is a factor of production? a. Money b. Interest c. Rent d. Capital

D.

The construction and use of capital goods to aid in the production of consumer goods illustrates the: a. Division of labor b. Specialization of resources c. Coordinating and regulating function of price d. Roundabout but more efficient production

d.