ECO210 Quiz 3, Quiz 1, Quiz 2, ECO210 Quiz 4, Quiz 5, quiz7

Which of the following is NOT included in GDP?

C) Intermediate goods sold to producers as input into making a final good.

Who should specialize in making pizza?

C) June can make three pizzas in the time it takes her to make on woven basket.

What happens to the quantity demanded of all goods and services when the price level falls?

A) The quantity demanded of all goods and services in the economy rises.

Which of the following is NOT correct?

A change in price will change the entire demand schedule for a good but will not change the demand curve.

Which of the following is NOT true about factors that cause a change in supply?

A change in the market price of a good will change ALL of the quantities supplied and shift the supply curve.

Which of the following is NOT correct?

A change in the market price of a good will change the supply of that good, which is shown by a shift of the entire supply curve, which means that all quantities supplied at all prices have changed.

Which of the following is NOT true?

A change in the price of a good will change its demand (shift the entire demand curve).

Which of the following is the correct definition of a co-op?

A cooperative or "co-op" is a group of people who pool their resources to buy and sell more efficiently than they could on their own. Co-ops are recognized by the government as legitimate business operations and most receive tax exempt status as a result.

What causes a decrease in the quantity demanded of a good?

A increase in the price of the good.

Which of the following is NOT true about the factors that cause a change in demand?

A normal good is one in which its demand DECREASES as consumer income increases.

Which of the following is NOT true?

A price floor is when the government enforces a market price that is less than the natural equilibrium price.

Which of the following is NOT true?

A quota is one fourth of a dollar.

Which of the following correctly describes a Regressive Tax?

A regressive tax hits low income earners harder than high income earners.

Which of the following is NOT true about taxation?

A regressive tax is one that places a higher tax rate on upper income earners and a very low or nonexistent tax on very lower earners.

Which of the following is NOT true?

A shortage exists when the quantity demanded is just equal to the quantity supplied.

Which of the following is NOT correct about Structural Unemployment?

A) An example of structural unemployment is the situation with Joan who is taking her time seeking a new job that better fits her skill set because she is so confident in her employment prospects.

Which of the following is TRUE about Product Markets?

A) Consumers buy final goods and services in Product Markets. While firms are the buyers in resource markets, consumers (households) are the buyers in product markets.

Which of the following is NOT true about the mixed economic system in the United States?

A) Government spending accounts for over 90% of the total economy.

Which of the following is true about labor as a factor of production?

A) Labor refers to human effort.

Which is the correct definition of Macroeconomics?

A) Macroeconomics looks at the entire economy, not at the multitude of individual markets for the numerous individual goods and services. It looks at high level economic measures such as the level of employment, price levels and Gross Domestic Product.

Which of the following is NOT correct about the Real Interest Rate?

A) On accordance with federal law, the Real Interest Rate is the one stated at the very bottom of the Declaration Page of all standard lending contracts.

Which of the following is NOT true about positive economic statements?

A) Positive economic statements are ones that are true.

Which of the following is correct about Supply Side Economics?

A) Supply side economists believe that cuts in tax rates increase the incentives to work, save and invest; all of which will boost aggregate supply, which lowers price levels and increases output and employment.

Which of the following is NOT correct about the Labor Force.

A) The Labor Force includes every adult that can read and should be working.

Which of the following is NOT true about a Production Possibilities Frontier?

A) The curve on a PPF cannot be shifted outward even if more resources are used or if existing technology is vastly improved

As used in economics, to what does the term "marginal" refer?

A) The word "marginal" refers to the incremental or additional change that results from buying one more unit of something or doing one more specified action.

Which of the following is NOT true about a normative economic statement?

A) This is an accurate example of a normative economic statement: Raising the price of labor will cause a decrease in the amount of labor used by firms.

Which of the following is correct about an Economic Contraction?

A) While expansion is when employment, total national output and total national income is rising, an economic contraction is when these measures are falling. A recession is when the economy contracts for longer than just a few months.

Which of the following is NOT true about corporations?

Although the most common form of business organization, corporations account for less than half of all output and revenue.

Which of the following is correct about an Economic Expansion?

An economic expansion is when employment, total national output and total national income is rising,

Which of the following is NOT true about an externality?

An externality is a benefit or cost that impacts only the parties directly involved in a transaction, i.e., the buyer and the seller.

Which of the following correctly defines an Externality?

An externality is a cost or benefit that accrues to third parties not directly involved in an economic transaction.

Which of the following is NOT true about what changes demand (what changes all of the quantities demanded in the demand schedule and shifts the demand curve)?

An increase in the price of a product will decrease the demand for the product.That is, it will decrease all of the quantities demanded at each and every price.

Which of the following is NOT correct about a progressive tax?

As income rises, the progressive tax rate falls. Therefore, lower income earners pay a higher tax RATE than higher income earners.

Total Population=400. People working=80. People not working but seeking a job=20. Calculate the Unemployment Rate.

B) 20/(80+20)= 20%

Which of the following is correct about the term "capital" as defined by economists?

B) Economists define capital as physical assets (factories, machinery, etc.) used to produce other physical assets or consumer goods.

Which of the following correctly reflects the function of a resource market?

B) Firms buy labor, capital and natural resources in Resource Markets.

Which of the following is NOT true about Frictional Unemployment.

B) Frictional Unemployment refers to the difference between monthly hiring quotas and the number of qualified job applicants.

Which of the following is NOT true about the term "full employment", as used by economists?

B) Full employment, as used by economists means zero unemployment. Everyone over 16 in the labor force is working at a job.

Which of the productive resources involves the surface of the earth and the valuable resources located just on the surface and below the surface?

B) Land (Natural Resources)

Which of the following provides the correct definition of Microeconomics?

B) Microeconomics studies the phenomenon of individual choice and how markets coordinate those choices. Microeconomics focuses on how prices and quantities sold are determined in defined markets for individual goods.

Which of the following is correct about a Production Possibilities Frontier?

B) Points outside the PPF curve are not attainable with the given level of resources and the current state of technology. Points inside the curve are attainable but not efficient. To shift the PPF outwards, increase total resources or improve technology (or both).

Which of the following is true about scarcity?

B) Scarcity refers to the long term situation whereby the amount desired exceeds the amount freely available. Therefore, any item that can command any price in an open market is technically scarce.

Which concept reflects the benefit gained from having people do a specific task in a production process rather than every single step in that process?

B) Specialization

Which of the following is true about comparative advantage?

B) The Law of Comparative Advantage indicates that the person or country with the lower opportunity cost of making a good should specialize in making that good. If people or countries specialize according to comparative advantage and then engage in trade, both will be better off.

Which of the following is correct about the Unemployment Rate?

B) The Unemployment Rate is calculated by dividing those unemployed but seeking work by the total labor force. The labor force is defined as those either working or actively seeking work.

Which of the following people has the comparative advantage in making pizza?

C) Jimbo can make one pizza or one fourth of a hobby horse in the same amount of time.

Which of the following is the correct definition of a business cycle?

B) The business cycle is the natural ups and downs of total production in an economy. The lowest part of the cycle is called the trough and the highest part is called the peak.

What factor is key to determining which good a person or country should specialize in producing?

B) The person or country with the comparative advantage in making a good should specialize in making that good. The comparative advantage is based on having the lower opportunity cost.

Which of the following statements correctly states the relationship between Comparative Advantage and Specialization?

B) The person or country with the comparative advantage in making a good should specialize in making that good. The comparative advantage is based on having the lower opportunity cost.

Which of the following is correct about the term "full employment", as used by economists.

B) The term "full employment", as used by economists is not a zero unemployment rate. Full employment, as used by economists, just means there is no cyclical unemployment, even if some structural, seasonal or frictional unemployment exists.

The market value of all FINAL goods and services produced within the borders of a country during a particular time period

C) Gross Domestic Product

If the Nominal Interest Rate is 5% and Inflation is 6%, what is the Real Interest Rate?

C) -1% (Negative 1 Percent)

Which of the following is NOT correct about the federal deficit and the federal debt?

C) A federal deficit results in a decline in the federal debt.

What is the correct definition of a Positive Economic Statement?

C) A positive economic statement is one that can proved true or proven false by testing it with reference to facts. It need not be true but simply able to subjected to testing to determine if in fact it is true.

Which shows the total value of all output supplied in relation to the price level?

C) Aggregate Supply

Which of the following is NOT true about natural resources?

C) All natural resources are renewable or have a supply that man can never exhaust.

Which of the following is NOT correct about Aggregate Supply?

C) An increase in the price level will decrease aggregate supply.

Which of the following is NOT included in Gross Domestic Product of the United States?

C) Cars built in South Korea by Ford and General Motors.

This type of inflation occurs when Aggregate Supply contracts while Aggregate Demand holds steady, as shown by an AS curve that shifts to the left while the AD curve holds steady.

C) Cost Push

This type of inflation results when aggregate demand is increasing faster than supply, as shown by an aggregate demand curve shifting to the right while the aggregate supply curve is stationary.

C) Demand Pull

What is occurring when output, prices, income and production are falling?

C) Economic Contraction

Which of the following is NOT true?

C) Frictional unemployment tends to be long term and constitutes the most difficult type of unemployment to resolve.

Which of the following lists the four major categories of economic resources used in the production of consumer goods?

C) Land, labor, capital and entrepreneurial skill.

Which of the following is NOT true about Microeconomics and Macroeconomics?

C) Microeconomics studies the performance of the economy as a whole.

Which of the following is correct about Opportunity Cost?

C) Opportunity Cost is highly subjective and varies according to the personal perspective of each individual.

Which of the following is NOT true about unemployment?

C) Part time workers working less than 20 hours per week are counted as unemployed by the Bureau of Labor Statistics.

Which of the following is true about points inside and outside of the PPF?

C) Points outside the PPF are not attainable with the given level of resources the given state of technology being used.

What measure is determined by the intersection of Aggregate Demand and Aggregate Supply?

C) Price Level

In which type market do firms buy labor, capital and natural resources?

C) Resource Market

Which of the following is NOT true about specialization?

C) Specialization degrades the skill set of workers forced to work under a specialized system of production.

What is the effect on the PPF from an increase in natural resources, labor and capital?

C) The PPF line will shift outwards.

Which of the following correctly defines and describes a federal deficit?

C) The amount of government spending that exceeds government revenue in one fiscal year.

Which of the following is the correct method to determine comparative advantage?

C) The country with the lower opportunity cost of making steel is said to have the comparative advantage in making steel.

Which of the following provides a correct example of Normative Economics?

C) The government should provide a minimum total welfare payment to poor people that is at least 80% of the local minimum wage salary.

Which of the following is NOT correct about how tariffs impact consumers and domestic producers?

Consumers benefit because they are able to buy imports they value above domestic versions at a cheaper price.

Which of the following is NOT true about the cooperative form of business organization?

Cooperatives are always formed as Chapter J subsidiaries of preferred stock companies.

Which are of the following does NOT contribute to understating the true level of unemployment?

Counting people over 16 who don't have a job but are actively seeking a job as employed but unemployable.

Which of the following is correct about the partnership form of business organization?

Partnerships are the least common business form.

Which of the following is NOT true about an outward shift of the PPF?

D) A sudden and unexpected decrease in the capital stock is the most effective method of shifting the PPF outward.

Which of the following is NOT true about Aggregate Demand?

D) An increase in the price of walnuts will decrease the aggravated demand for walnuts.

Which of the following does NOT correctly state the types of inflation? Question options:

D) Cost Push inflation is caused by increases in prices of most consumer goods.

This type of unemployment occurs as job seekers need time to explore the market. It occurs when the economy is growing and people are more likely to switch to a job that better fits their skills, rather than clinging desperately to their existing job, which may not utilize their full skill set.

D) Frictional

This interest rate is calculated by subtracting the inflation rate from the nominal interest rate. It is is just the nominal or stated interest rate adjusted for inflation.

D) Full Employment Interest Rate

Which of the following is NOT correct about GDP per capita?

D) If population grows faster than output and employment, GDP per capita will increase.

As used by economists, which of the following is the correct definition of capital?

D) Physical assets (factories, machinery, tools etc.) used to produce other physical assets or consumer goods.

This type of unemployment results from changes in tastes, technology and taxes. Although it is difficult for those affected but is actually a sign of a dynamic, healthy economy.

D) Structural

Which of the following provides the correct definition and description of the Labor Force?

D) The Labor Force does NOT include adults who are not actively seeking a job, such as retirees and those who have returned to school. A parent who chooses to stay home to care for young children and is not actively seeking employment is NOT included in the Labor Force.

Which of the following provides the correct definition of "opportunity cost?"

D) The best single alternative given up in order to buy a good or to spend an hour doing a particular activity.

In which direction does the supply curve shift when there is an increase in supply?

Downward to the right.

Which of the following is NOT true about the various types of unemployment?

For economists, the term "full employment" means that all able bodied adults are employed.

Which of the following is NOT true about factors that change the equilibrium price?

If both supply and demand increases, it is certain that the equilibrium price will increase.

Which of the following provides the correct definition of Progressive Taxation?

In progressive taxation, tax as a percentage of income increases as income level increases. The tax rate rises as certain income levels are surpassed.

What causes the quantity supplied of a good to rise?

Increase in the market price of the good.

Which of the following is NOT an accurate definition?

Inflation occurs when the price of one or two key consumer goods increases.

John is a high school dropout with amazing self taught computer skills and a three year old thriving business setting up and maintaining computer systems. Joan just graduated from dental college but just decided to learn how to set up computer systems. Judy is a doctor who worked her way through college and medical school setting up and maintaining computer systems. Based on the concept of opportunity cost, who should set up and maintain the computer system at the newly formed large scale private medical practice Judy just joined?

John, because he has the lower opportunity cost of setting up computer systems. Although Judy has more experience, she would have to sacrifice $500 per hour of medical income to save her firm just $100 per hour of computer set up costs. Likewise, Joan is giving up $300 per hour of dental income for each hour she earns $50 for providing computer set up services.

Which of the following is NOT true about leading economic indicators.

Leading economic indicators always predict when a recession will begin, within 30 days or better.

Which of the following will cause the Equilibrium Price to rise?

No change in supply but an increase in demand.

Which of the following is NOT true of the production possibilities frontier (PPF)?

Points between the PPF curve and the X and Y axes are not attainable.

Which of the following is NOT correct about price ceilings?

Price ceilings benefit all consumers because everyone can get the good at the lower government mandated price.

Which of the following is NOT true about price floors?

Price floors result in shortages, which hurts producers.

Which of the following causes a shortage?

Price is held below the equilibrium price resulting in quantity demanded exceeding quantity supplied.

Which of the following is the correct definition and description of Private Goods?

Private goods are exclusive because sellers have the legal right to exclude those who refuse to pay. Private goods are said to be rival in consumption because the amount consumed by one party is unavailable to another for consumption.

Which type of good is most likely to be provided by the government because it is valued by society but very unlikely to ever be provided by a private sector firm?

Public Good.

Which of the following is NOT correct about Public Goods?

Public Goods are provided by publicly held corporations with massive subsidies from the government.

Which of the following is NOT true about private and public goods?

Public goods are those whose consumption by one party precludes consumption by another. Also, public goods are those whose consumption can be denied to nonpayers.

Which of the following is correct about stagflation?

Stagflation occurs when aggregate supply contracts, resulting in higher inflation and lower output. Decreases in agricultural output and oil supplies contributed to stagflation in the 1970's.

Which curve has a positive slope where the quantity increases as the price increases?

Supply Curve

Which of the following is NOT true about the impact of tariffs and quotas?

Tariffs and quotas allow consumers to save money.

Which of the following is NOT true about Gross Domestic Product (GDP)?

The best measure of a country's standard of living is average median income per medianiated household.

Which of the following causes a surplus?

The minimum price is set above the equilibrium price resulting in quantity supplied exceeding quantity demanded.

Which of the following will NOT change the supply of lead pencils?

The price of pencils.

Which of the following is correct about the sole proprietorship?

The sole proprietorship is the most common business form but it only generates a tiny portion of all business sales.

Which of the following is correct about the top 1% of income earners?

The top 1% of income earners pay over a third of all tax revenues.

What is the difference between the information in the Supply Schedule of a good and its Supply Curve?

There is no difference.

Which of the following is NOT true about private and public goods?

To be a public good, it need only be nonrival or nonexcludable, not both.

Which of the following indicates that the U.S. has a Mixed Economic System?

While most production is achieved through profit seeking private firms, Federal agencies regulate safety in the workplace, safety of food and medicines, water standards, and ensure maximum competitiveness in the overall economy.