Econ test (mod 1-4) multiple choice

Use the graph to determine which country has a comparative advantage in producing each good.

A. Country A (wheat) Country B (textiles)

Use the graph to determine which country has an absolute advantage in producing each good.

A. Country A (wheat) Country B (textiles)

Which point(s) on the graph represent efficiency in production? a. BandC b. AandD c. A,B,C,andD d. A,B,C,D,andE e. A,B,C,D,E,andF

C. A,B,C and D

Which of the following is the most likely result of inflation? a. falling employment b. a dollar will buy more than it did before c. people are discouraged from holding cash d. price stability e. low aggregate output per capita

C. People are discouraged from holding cash

For country A, the opportunity cost of a bushel of wheat is a. 1 ⁄2 units of textiles b. 2 ⁄3 units of textiles c. 1 1 ⁄3 units of textiles d. 1 1 ⁄2 units of textiles e. 2 units of textiles

A. 1/2 units of textiles

This production possibilities curve shows the trade-off between consumer goods and capital goods. Since capital goods are a resource, an increase in the production of capital goods today will increase the economy's production possibilities in the future. Therefore, all other things equal (ceteris paribus), producing at which point today will result in the largest outward shift of the PPC in the future? a. A b. B c. C d. D e. E

A. A

Which of the following questions is studied in microeconomics? a. Should I go to college or get a job after I graduate? b. What government policies should be adopted to promote employment in the economy? c. How many people are employed in the economy this year? d. Has the overall level of prices in the economy increased or decreased this year? e. What determines the overall salary levels paid to workers in a given year?

A. Should I go to college or get a job after I graduate?

During the recession phase of a business cycle, which of the followingislikelytoincrease? a. the unemployment rate b. the price level c. economic growth rates d. the labor force e. wages

A. The unemployment rate

The other things equal assumption allows economists to a. avoidmakingassumptionsaboutreality. b. focusontheeffectsofonlyonechangeatatime. c. oversimplify. d. allownothingtochangeintheirmodel. e. reflectallaspectsoftherealworldintheirmodel.

B. Focus in the effects of only one change at a time

Which of the following statements is/are normative? I. The price of gasoline is rising. II. The price of gasoline is too high. III.Gas prices are expected to fall in the near future. a. I only b. II only c. III only d. I and III only e. I, II, and III

B. II only

Suppose that you prefer reading a book you already own to watching TV and that you prefer watching TV to listening to music. If these are your only three choices, what is the opportunity cost of reading? a. watching TV and listening to music b. watching TV c. listening to music d. sleeping e. the price of the book

B. Watching TV

An increase in unemployment could be represented by a movement from point a. D to point C. b. B to point A. c. C to point F. d. B to point E. e. E to point B.

D. B to point E

If the two countries specialize and trade, which of the choices below describes the countries' imports?

D. Country B (wheat) Country A (textiles)

The labor force is made up of everyone who is a. employed. b. old enough to work. c. actively seeking work. d. employed or unemployed. e. employed or capable of working.

D. Employed or unemployed

Which of the following is an example of a resource? I. petroleum II. a factory III. a cheeseburger dinner a. I only b. II only c. III only d. I and II only e. I, II, and III

D. I and II only

Which of the following situations represent(s) resource scarcity? I. Rapidly growing economies experience increasing levels of water pollution. II. There is a finite amount of petroleum in the physical environment. III. Cassette tapes are no longer being produced. a. I only b. II only c. III only d. I and II only e. I, II, and III

D. I and II only

For this economy, an increase in the quantity of capital goods produced without a corresponding decrease in the quantity of consumer goods produced a. cannot happen because there is always an opportunity cost. b. is represented by a movement from point E to point A. c. is represented by a movement from point C to point B. d. is represented by a movement from point E to point B. e. is only possible with an increase in resources or technology.

D. Is represented by a movement from point E to point B

Which of the following might allow this economy to move from point B to point F? a. more workers b. discovery of new resources c. building new factories d. technological advances e. all of the above

E. All of the above

A sustained increase in aggregate output over several decades represents a. an expansion. b. a recovery c. a recession. d. a depression. e. economic growth..

E. Economic growth