Practice Exam Econ
What is Mike's new salary if he earned $40,000 last year, the consumer price index increased from 120 to 125, and his salary is adjusted by the rate of inflation annually? a) $41,667 b) $40,125 c) $38,400 d) $51,800
a) $41,667
If personal comsumption is $200, investment is $50, government purchases total $60, imports equal $30, and exports equal $50, then GDP equals a) $390 b) $330 c) $380 d) $290
b) 330
in the market for widgets, more sellers exit the market at the same time that consumer preferences are changing, such that people like widgets a lot LESS than before. If the rate at which sellers are exiting the market is slower than the rate that consumer preferences are changing, we can expect... a) a decrease in the equilibrium price and increase in equilibrium quantity. b) a decrease in the equilibrium price and quantity c) no change in the equilibrium price and an increase in the equilibrium quantity of widgets. d) an increase in the equilibrium price and quantity of widgets
LOOK BACK
Gasoline is produced from crude oil. All things equal, if the supply of crude oil falls, the equilibrium price of gasoline will __________ and the equilibrium quantity will ____________. a) increase; decrease b) decrease; increase c) increase; increase d) decrease; decrease
OFFICE HOURS
If both the supply of and the demand for a good decrease simultaneously, but the decrease in demand is greater than the decrease in supply, then the equilibrium price ______ and equilibrium output _________ a) falls; may rise, fall or stay the same (X) b) may rise, fall, or stay the same; rise c) falls; falls d) may rise, fall, or stay the same; falls.
OFFICE HOURS
If the supply of a good increases while the demand for that good decreases, the equilibrium quantity will a) remain unchanged b) be indeterminate c) increase d) decrease
OFFICE HOURS
the _________________ curve is vertical at full employment a) SRAS b) LRAS c) LRAD d) SRAD
b) LRAS
Suppose Robert has a wage contract subject to an escalator clause. He earned $22 per house last year. In the same year, the consumer price index rose from 120 to 126. Based on the given information, what should his new wage be? a) $23.10 per hour b) $24 per hour c) $24.40 per hour d) $22.50 per hour
a) $23.10 per hour
In the market for electric vehicles, more manufactures are releasing electric models at the same time that consumer preferences are changing towards EVs. if manufacturers are releasing new electric models at a faster rate than consumer preferences are changing towards EVs, we can expect a) a decrease in the equilibrium price and an increase in the equilibrium quantity of EVs b) an increase in the equilibrium price and quantity of EVs c) a crease in the equilibrium price and quantity of EV's d) no change in the equilibrium price and an increase in the equilibrium quantity of EVs.
a ) a decrease in the equilibrium price and an increase in the equilibrium quantity of EVs
Suppose that a store sells candy bars for $0.89 for one and $1.50 for two. The marginal cost of the second candy bar will be a) $0.61 b) $1.50 c) $0.89 d) $0.75
a) $0.61
Say someone gave you a used bike valued at $100 as a gift. Unfortunately, you were hoping for a model that sells $300. The opportunity cost to you of keeping the bike is: a) $100 b) $1300 c) $0 d) $300 e) $200
a) $100
Say someone have you a used phone valued at $500 as a gift. Unfortunately you were hoping for a model that sells for $800. The opportunity cost of keeping the phone is a) $500 b) $300 c) $1300 d) $800 e) $0
a) $500
say someone gave you a used phone valued at $500 as a gift. Unfortunately, you were hoping for a model that sells for $800. the opportunity cost to you of keeping the phone is: a) $500 b) $300 c) $1300 d) $800 e) $0
a) $500
John expects to get a raise equal to the increase in the consumer price index (CPI). The CPI has gone from 160 to 164. If John's salary last year was $50,000 what salary does he expect to earn this year? a) $51,250 b) $52,220 c) $52,250 d)$48,750
a) $51,250
John expects to get a raise equal to the increase in the consumer price index. the CPI has gone form 160 to 164. If john's salary last year was $50,000, what salary does he expect to earn this year. a) $51,250 b) $52,220 c) $52,250 d) $48,750
a) $51,250
Karl's Keychain company produces keychains that sell in its stores for $1 each. On January 1, 2015, the company had inventory of 10000 keychains. During 2015, the company produced 900,000 keychains. At the end of the buisness year on Decemeber 31, 2015, the company's inventory of keychains was 8,000. What was the value of Karl's Inventory investment in 2015? a) -$2000 b) $898,000 c) $8000 d) $18000
a) -$2000
Suppose the market basket of goods and services cost $3,500 in 1996 but today cost $4,250. Using 1996 as the base year, the consumer price index for today is a) 121.4 b) 120.0 c) 79.6 d) 82.4
a) 121.4
Suppose in 2015 the cost of purchasing a basket of goods was $50. That same basket costs $70 in 2016. if 2016 is the base year, the consumer price index for 2015 is. a) 71 b) 100 c) 90 d) 140
a) 71 use index formula
Last year, the consumer price index was 115 while the consumer price for this year is 125. the rate of inflation is a) 8.7% b) 9.2% c) 10.8% d) 8%
a) 8.7%
Jennifer received news that she is getting a 5% raise. However, the Bureau of Labor Statistics just reported that prices are rising by 7%. Based on the given information, which of the following is true? a) Jennifer's purchasing power will decline by 2% b) Jennifer's purchasing power will rise by 7% c) Jennifer's purchasing power will rise by 2% d) inflation has no effect on purchasing power.
a) Jennifer's purchasing power will decline by 2%
Which person is considered to be unemployed? a) Tiffany, who is going for interviews, hoping to get her first job. b) Carmen, who works 3 days a week at her Father's business buy is not paid. c) Ahmed, who is on vacation d) Sarah, who is on strike
a) Tiffany, who is going for interviews, hoping to get her first job.
Which one of these would be included in GDP calculations? a) a laptop computer purchased by a consumer b) flour purchased by a bakery c) a tire purchased by Tesla d) petroleum purchased by a gas station
a) a laptop computer purchased by a consumer
Which of these will shift the aggregate supply curve to the right? a) an increase in the investment of human capital b) the development of a cartel in the production of soybeans c) an increase in corporate taxes d) an increase in the price of garbage collection
a) an increase in the investment of human capital
The opportunity cost of undertaking an activity is defined as the __________ activity. a) benefit forgone by not undertaking the next best b) cost forgone by not undertaking another c) the monetary benefit of undertaking that d) monetary cost of undertaking that
a) benefit forgone by not undertaking the next best
What are the determinants of SRAS a) changes in the input prices, taxes, and businesses and inflationary expectations b) changes in education, taxes, and business and inflationary expectations c) changes in government spending, taxes, and business and inflation expectations d) changes in input prices, taxes, and technology
a) changes in the input prices, taxes, and businesses and inflationary expectations
In the market for cable television, fewer people are subscribing to cable while the cost of providing cable television has increased. As a result we can expect a(n) a) decrease in the equilibrium price and quantity of cable television b) unknow change in the equilibrium price but a decrease in the equilibrium quantity of cable television. c) unknown change in the equilibrium quantity but a decrease in the equilibrium price of cable television. d) increase in the equilibrium price and quantity of cable television.
a) decrease in the equilibrium price and quantity of cable television
Lexi works Monday to Friday from 4 pm to 6 pm in the after school program. She began looking for a full time job last week and has already scheduled 3 job interviews. According to the Bureau of Labor Statistics, Lexi is: a)employed b) a discourage worker c) unemployed d) not in the labor force
a) employed
Assume that Bob reads an article for class concerning the US labor market that reports an increase in entrepreneurial activity. to verify this info, he could refer to the a) household survey b) payroll survey c) weekly jobs report d) current employment statistics survey
a) household survey
If both the supply and demand for a good increase simultaneously, the equilibrium quantity will a) increase b) be indeterminate c) decrease d) remain unchanged
a) increase
A firm will MOST likely decrease the price of its output if the: a) quantity supplied of the goods exceeds the quantity demanded b) demand curve shifts to the right c) supply curve shifts to the left d) quantity demanded of the goods exceeds the quantity supplied
a) quantity supplied of the goods exceeds the quantity demanded
Suppose the Terrific Tube Company ran a very successful advertising campaign. Economic analysis would suggest that the campaign would cause the equilibrium price to ______ and the equilibrium quantity to ______ a) rise; rise b) rise; fall c) fall; fall d) fall; rise
a) rise; rise
A breakthrough in solar energy research that halves the cost of electricity will a) shift the aggregate supply curve to the right b) cause the aggregate supply curve to become vertical c) have no effect on the aggregate supply curve d) shift the aggregate supply curve to the left
a) shift the aggregate supply curve to the right
what would the effect on the equilibrium price and equilibrium quantity of a new housing mortgage interest rates rise and the costs of building a house rise simultaneously? a) the equilibrium price will rise, and the equilibrium quantity will fall b) the equilibrium price cannot be predicted, but the equilibrium quantity will fall c) the equilibrium price will fall, but the equilibrium quantity cannot be predicted. d) the equilibrium price, and the equilibrium quantity will fall.
a) the equilibrium price will rise, and the equilibrium quantity will fall.
Which of these is included in personal consumption expenditures? a) the purchase of a new TV by a household b) highway construction c) construction of residential housing d) purchases of common stock by an investor.
a) the purchase of a new TV by a household
which of these is included in personal consumption expenditures? a) the purchase of a new TV by a household b) highway construction c) construction of residential housing d) purchases of common stock by an investor
a) the purchase of a new TV by a household
In the market for electric vehicles, more vehicle manufacturers are releasing electric models at the same time that EVs are becoming more popular with consumers. As a result, we can expect an a) unknown change in the equilibrium price but an increase in the equilibrium quantity of EVs b) unknown change in the equilibrium price but a decrease in the equilibrium quantity of EVs c) increase in the equilibrium price and quantity of EVs d) unknown change in the equilibrium quantity but a decrease in the equilibrium price of EVs.
a) unknown change in the equilibrium price but an increase in the equilibrium quantity of EVs
the government can finance a budget deficit by a) buying assets b) buying bonds from the Federal Reserve c) selling assets d) buying bonds from the public
c) selling assets
if both the supply of and the demand for a good increase simultaneously... a) equilibrium quantity increases and the effect on equilibrium price is indeterminate b) the effect on both equilibrium price and equilibrium quantity is indeterminate c) equilibrium price and equilibrium quantity both increase. d) equilibrium price increases and the effect on the equilibrium quantity is indeterminate.
b ) both is indeterminate
If Kim's salary was $50,000 last year, and this year she receives a cost of living increase tied to the consumer price index(CPI), what will her salary be this year assuming the CPI has risen from 110 to 114. a) $50,300 b) $51,818 c) $49,114 d) $50,114
b) $51,818
There are 15 million people living in Marketstan, of whom 9 million are working and 1 million are actively looking for work. What is Marketstan's unemployment rate? a) 15 mil b) 10 mil c) 16 mil d) 5 mil
b) 10 mil
Suppose a market basket of goods costs $10,000 in 2009, the base period, and that same basket of goods now costs $11,200. What is the consumer price index for the current price. a) 120.0 b) 112.0 c) 132.0 d) 89.3
b) 112.0
Which one of these would be included in GDP calculations? a) nails purchased by a building contractor b) a hamburger purchases by a hungry restaurant patron c) petroleum purchased by a refiner from the company that drilled it d) a windshield purchased by General Motors
b) a hamburger purchased by a hungry restaurant patron.
which of these is NOT one of the reasons for the phenomial growth of the U.S. economy? a) open immigration policies b) a reduction in the capital to labor ratio c) high worker productivity d) an increase in human capital
b) a reduction in the capital to labor ratio
Which one of these is included in gross private domestic investment? a) the purchase of a new TV by a household b) an increase in business inventories c) highway construction by a government contractor d) purchases of common stock by investors.
b) an increase in business inventories
Which one of these would NOT lead to higher prices? a) strong consumer demand b) an increase in the supply of food c) an increase in the supply of money d) high gas prices
b) an increase in the supply of food
Figure: interpreting market shifts a) both price and quantity fell b) both price and quantity rose c) only price rose d) only quantity rose
b) both price and quantity rose
which of these is an example of an economic interest? a) putting funds in a certificate of deposit b) building a new sales force training facility. c) purchasing a share of Google stock d) trading bond certificate.
b) building a new sales force training facility.
If the cost of a typical market basket in 2019 is 400 and the cost of a typical market basket in 2020 is 390, then during this period the economy is undergoing a) disinflation b) deflation c) hyperinflation d) inflation
b) deflation
If both the supply of the demand for a good increase simultaneously a) the effect on both equilibrium price and equilibrium quality is indeterminate b) equilibrium quantity increases and the effect on equilibrium c) equilibrium price increases and the effect on equilibrium quantity is indeterminate d) equilibrium price and equilibrium quantity both increase.
b) equilibrium quantity increases and the effect on equilibrium
Investment in structures, equipment, software, and net inventory is known as: a) net investment in durable goods b) gross private domestic investment c) total business spending. d) net business spending
b) gross private domestic product
Everything else the same, if investment expenditures rise by $300 billion and imports increase by $200 billion, then GDP a) increase by $500 billion b) increases by $100 billion c) decreases by $100 billion d) does not change
b) increase by $100 billion
which of these will result if the economy expands beyond the level of full employment a) lower interest rates b) inflation c) unemployment d) a recession
b) inflation
A person will decide to take the day off work if the a) person can make up the missed work the next day b) marginal cost is less than the marginal benefit c) marginal cost exceeds the marginal benefit d) person had additional sick days to spare
b) marginal cost is less than the marginal benefit
If you hire a lawn service to mow your grass, the money you pay for the service is included in the GDP, whereas if you mow your own law, the value of this service is not included in GDP. this fact represents a criticism of the GDP's focus on a) avoidance of double counting b) market-produced goods and services c) final values of goods and services. d) domestic versus national product.
b) market produced goods and services
the ___________ is the total accumulation of past budget deficits less surpluses. a) budget deficit b) national debt c) public debt d) budget surplus
b) national debt
In the national income account, which of these is NOT classified as government spending. a) services paid by US senators b) payments to Social Security recipients c) services provided by police officers d) purchases of military hardware
b) payments to Social Security recipients
Which activity would NOT qualify a person as being in the labor force? a) submitting applications through the internet b) reading help wanted ads c) going on interviews d) using social media to reach out to employers.
b) reading help wanted ads
economic growth is most commonly measured by a) genuine progress indicator per capita b) real GDP per capita c) GDP per capita
b) real GDP per capita
economic growth is most commonly measured by a) genuine progress indicator per capital b) real GDP per capita c) GDP per capita d) GDP
b) real GDP per capita
all of these are considered expansionary fiscal policies EXCEPT a (n) a) decrease in personal taxes b) reduction in unemployment compensation c) increase in transfer payments d) increase in government spending
b) reduction in unemployment compensation
Janet is receiving a 5% pay raise. If the rate of inflation is 2%, then Janets purchasing power is a) impossible to determine b) rising c) falling d) unaffected.
b) rising
over the past 10 years, laptop computer prices have decreased while the quantity has increased. this indicates that a) increases demand has created a market incentive to reduce the price b) supply has increased more than demand c) demand has increased more than supply d) demand and supply have increases proportionately.
b) supply has increased more than demand
Suppose in the market for iPhones, the following tow changes take place (1) the cost of making iPhones falls, and (2) the price of smartphone data plans falls. What happens to the equilibrium price and equilibrium quantity? a) the equilibrium price and the equilibrium quantity rise. b) the equilibrium price is indeterminate, but the equilibrium quantity rises. c) the equilibrium price falls, but the equilibrium quantity is indeterminate. d) the equilibrium price rises, but the equilibrium quantity is indeterminate.
b) the equilibrium price is indeterminate, but the equilibrium quantity rises.
Labor productivity is NOT a major determinate of a) living standards b) the money supply c) economic growth d) per capita GDP
b) the money supply
The opportunity cost of buying a ticket to a major league baseball game and then going to the game is a) the time spent at the game b) the next best alternative that could have been undertaken c) all other alternative activities that could have been undertaken. d) the price of the ticket.
b) the next best alternative that could have been undertaken
Sujata has a stopover in Iceland and can chose one of three tours: visit the thermal springs, hike the glaciers, or view the Northern Lights. If Sujata chooses the Northern Lights, her opportunity cost would be : a) zero as long as the northern lights was her top choice b) the value of visiting the thermal springs if that was her second choice after the northern lights c) the value of visiting the thermal springs if that was her last choice among the three tours. d) the combined value of visiting the thermal springs and the glaciers.
b) the value of visiting the thermal springs if that was her second choice after the northern lights
John chose to buy a pizza. If he hadn't bought the pizza, he would have bought either a hot dog or hamburger. John's opportunity cost of buying the pizza is a) both the hot dog and the hamburger b) whichever alternative, the hot dog or the hamburger, has the next highest value to john. c) the hot dog d) the hamburger
b) whichever alternative, the hot dog or the hamburger, has the next highest value to john
the corner bakery has doughnuts, cookies, or cake pops. Your opportunity cost of buying the cake pop would be a) you enjoyment of the donuts and cookies b) your enjoyment of the donuts c) your enjoyments of the cookies d) your enjoyment of the donuts or cookies
b) your enjoyment of the donuts
The corner bakery has donuts, cookies or cake pops. Your opportunity cost of buying the cake pop would be: a) your enjoyment of the donuts b) your enjoyment of the donuts or the cookies c) your enjoyment of the cookies d) your enjoyment of the donuts and the cookies
b) your enjoyment of the doughnuts or the cookies
If personal consumption is $100, investment is $25, government purchases total $25, imports equal $20, and exports equal $10, then GDP equals: a) $150 b) $160 c) $140 d) $180
c) $140
Last year, Megan's salary was $65,000. The CPI increased from 109 to 115. If Megan received a cost-of-living adjustment, what would her salary be? a) $61,320 b) $61,553 c) $68,578 d) $67,564
c) $68,578
Last year, Megan's salary was $65,000. The CPI increased from 109 to 115. If Megan received a cost-of-living adjustment, what would her salary be? a) $61,553 b) $61,320 c) $68,578 d) $67,564
c) $68,578
Karls keychain company produces keychains that sell in its sotres for $1. on Jan 2015, the company had an inventory of 10,000 keychains. During 2015, the company sold 900,000 keychains. at the end of the buisness year on Dec 31, 2015, the company's inventory of keychains was 6,000. How much did karl contribute to GDP? a) $904,000 b) $906,000 c) $896,000 d) $900,000
c) $896,000
Supposed a market basket of goods costs $10,000 in 2009, the base period, and that same basket of goods now costs $11,200. What is the consumer price index for the current period a) 120.0 b) 132.0 c) 112.0 d) 89.3
c) 112.0
suppose a market basket of goods costs $10,000 in 2009, the base period, the base period, and that same basket of goods now costs $11,200. What is the CPI for the current period? a) 120.0 b) 132.0 c) 112.0 d) 89.3
c) 112.0
An economy has a population of 226,500 people, of whom 12,500 are unemployed and actively seeking work, and 35,000 people work full-time. This economy's unemployment rate is a) 6.5% b) 5.5% c) 21.1% d) 21%
c) 21.1%
Heather has one employee in her sweater shop who can sew six sweaters a day. When she hires a second person, the two employees can make ten sweaters together. Thinking at the margin, the extra benefit received from hiring a second worker is _____ sweaters. a) 6 b) 16 c) 4 d) 10
c) 4
in 2009, a market basket of goods and services cost $100 in Merryland while the same basket cost $200 in Berryland. in 2010, the cost in Merryland was $150 in Berryland, and the cost was $225. Based on the given information, which statement is TRUE? a) the rate of inflation is 4 times as large in Merryland as in Berryland b) the countries have the same rate of inflation c) Berryland has more inflation than Merryland d) neither country underwent inflation.
c) Berryland has more inflation than Merryland
if a country's currency appreciates, what impact will it have on aggregate demand or aggregate supply? a) LRAS will fall because imports will rise b) LRAS will rise because investments returns will rise c) SRAS will rise due to lower prices on imported inputs d) AD will rise because the currency will buy more abroad
c) SRAS will rise due to lower prices on imported inputs
If the producers of cotton shirts face higher cotton prices, which of the following is likely to occur? a) the supply of cotton shirts increases, the equilibrium price of cotton shirts falls, and the equilibrium quantity rises. b) the supply of cotton shirts increases, the equilibrium price of cotton shirts rises, and the equilibrium quantity falls. c) The supply of cotton shirts decreases, the equilibrium price of cotton shirts rises, and the equilibrium quantity falls. d) the supply of cotton shirts decreases, the equilibrium price of cotton shirts rises, and the equilibrium quantity rises.
c) The supply of cotton shirts decreases, the equilibrium price of cotton shirts rises, and the equilibrium quantity falls.
Which one of these would be included in GDP calculations? a) nails purchased by a building contractor b) petroleum purchased by a refiner from the company that drilled it. c) a hamburger purchased by a hungry restaurant patron d) a windshield purchased by General Motors
c) a hamburger purchased by a hungry restaurant patron
which one of these would be included in GDP calculations? a) nails purchased buy a building contractor b) petroleum purchased by a miner form the company that drilled it c) a hamburger purchased by a hungry restaurant patron d) a windshield purchased by General Motors
c) a hamburger purchased by a hungry restaurant patron
Because people make decisions on the margin, when deciding whether to purchase a second car, they would therefor compare the a) additional benefit expected from a second car with the total cost of the 2 cars b) none of these are correct c) additional benefit expected from a second car with the additional costs of the second car. d) dollar cost of having two cars with the potential income the two cars may generate.
c) additional benefit expected from a second car with the additional costs of the second car.
which of these will shift the Aggregate supply curve to the right? a) an increase in the price of garbage collection b) the development of capital of a cartel in the production of soybeans c) an increase in the investment of human capital d) an increase in corporate taxes
c) an increase in the investment of human capital
Suppose mike has 3 hours of time to spend so he ranks the following activities in order of priority: 1 see a move, 2 attend a ball game, 3 study economics. Assume that each activity takes three hours. what is mikes opportunity cost of seeing a movie? a) studying economics b) attending a ball game and studying economics c) attending a ball game d) either attending a ball game or studying economics.
c) attending a ball game
if both the supply and the demand for a good increase simultaneously, the equilibrium price will a) decrease b) increase c) be indeterminate d) remain unchanged.
c) be indeterminate
An airline finds that its morning flights are half-empty, but the mid-afternoon flights are full. Which would be the MOST plausible statement for an economist to make? a) fewer flights should be scheduled in the afternoon to force travelers to take morning flights. b) nothing can be done because of consumer sovereignty c) cut the prices of early morning flights and raise the prices of afternoon flights. d) nothing can be done because travelers are inflexible with their schedules.
c) cut the prices of early morning flights and raise the prices of afternoon flights.
The supply of coffee has increased twice as much as the demand for coffee has increased. as a result, we can predict a(n): a) increase in equilibrium price, but equilibrium quantity decreases b) decrease in equilibrium price, and equilibrium quantity c) decrease in equilibrium price, but equilibrium quantity increases d) decrease in equilibrium price, but equilibrium quantity is indeterminate
c) decrease in equilibrium price, but equilibrium quantity increases.
The ability to use physical resources in creative ways to produce goods and services is known as: a) labor b) physical capital c) entrepreneurial ability, technology, and ideas d) natural resources
c) entrepreneurial ability, technology, and ideas
Arlina got a 5% raise while the rate of inflation was 6%. Arlina's standard of living: a) fell by 3% b) rose by 2% c) fell by 1% d) rose by 1%
c) fell by 1%
Joan is trying to gather information on the membership at her Zen Center. She estimates that it will cost around $1000 to gather the info but expects the info to lead to increased membership revenue of $1100. Based on this info, Joan should a) not gather the information since it will cost money and the Zen Center is not a for profit organization b) gather the info regardless of the cost c) gather the info since the net gain will be $100 d) not gather the info since she will only gain $100
c) gather the info since the net gain will be $100
If the supply of a good increases while the demand for that good decreases, the equilibrium price will a) be indeterminate b) remain unchanged c) increase d) decrease
c) increase
developing countries tend to have a) limited amounts of both labor and capital b) larger amounts of both labor and capital c) low capital to labor ration d) limited labor supplies but lots of capital
c) low capital to labor ration
When quantity demanded in a market equals quantity supplied, then the a) market is in temporary disequilibrium b) equilibrium price is less than expected by buyers. c) market is in equilibrium d) market will not clear without further price adjustments.
c) market is in equilibrium
which simulation indicated that total output in a country has grown the most when the starting output is the same in all situations? a) output per worker grows by 11% while the labor force remains constant b) output per workers grows by 4% while the labor force grows by 12% c) output per worker grows by 10% while the labor force grows by 10% d) output per worker remains constant while the labor force grows by 11%
c) output per worker grows by 10% while the labor force grows by 10%
in the short run, the aggregate supply curve is ____________ because input prices are _________________ a) vertical, not completely flexible b) positively sloped, completely flexible c) positively sloped, not completely flexible d) vertical; completely flexible
c) positively sloped, not completely flexible
A firm wil MOST likely decrease the price of its output if the a) demand curve shifts to the right b) supply curve shifts to the left c) quantity supplied of the good exceeds the quantity demanded d) quantity demanded of the good exceeds the quantity supplied.
c) quantity supplied of the good exceeds the quantity demanded
A firm will MOST likely decrease the price of its output if the: a) demand curve shifts to the right b) supply curve shifts to the left c) quantity supplied of the goods exceeds the quantity demanded d) quantity demanded of the goods exceeds the quantity supplied.
c) quantity supplied of the goods exceeds the quantity demanded
assume initially the economy is at full employment. if AD increases, the aggregate price level and costs will ________________, and ultimately the SRAS curves shift to the ____________ a) fall ; right b) rise ; right c) rise ; left d) fall ; left
c) rise ; left
You can buy a game for $25 at the Campus store or $15 at a nearby shopping mall. You can buy a computer for $1000 at the campus store or for $990 as the nearby mall. Should your "where to buy" decision be the same or different in the 2 cases? a) Different because the computer is a higher surplus item b) the same because the opportunity cost of buying at the campus store is zero. c) the same because the marginal costs and marginal benefits are the same in each case. d) different because buying the game at the shopping mall provides a greater percentage discount.
c) the same because the marginal costs and marginal benefits are the same in each case.
When the prices are falling, real GDP tend to be __________ than nominal GDP for the same year a) lower b) the same c) we can't answer with the given info d) greater.
c) we can't answer with the given info
The student center has bagels, burritos, or burgers for lunch. All the same price. You have a burger today, but if they were out, you would have gotten a bagel. Your opportunity cost of the burger is: a) your enjoyment of the bagel and burrito b) your enjoyment of the bagel or the burrito c) your enjoyment of the bagel d)your enjoyment of the burrito
c) your enjoyment of the bagel
Suppose that a store sells candy bars for $0.89 for one and $1.50 for two. the marginal cost of the second candy bar is a) $0.89 b) $0.75 c) $1.50 d) $0.61
d) $0.61
If a student were not studying economics, he could be doing one of the following: sleeping in ($5), playing cards with his friends($10), or working ($8). The opportunity cost of studying economics is a) $8 b) $5 c) $23 d) $10
d) $10
Say someone gave you a used bike valued at $100 as a gift. Unfortunately, you were hoping for a model that sells for $300. The opportunity cost to you of keeping the bike is: a) $1,300 b) $300 c) $0 d) $100 e) $200
d) $100
If personal consumption is $50, investment is $65, government purchases total $85, imports equal $45, and exports equal $90, then GDP equals: a) $335 b) $350 c) $155 d) $245
d) $245
If personal consumption is $200, investment is $50, government purchases total $60, imports equal $30, and exports equal $50, then GDP equals: a) $380 b) $290 c) $390 d) $330
d) $330
Admission prices to dollywood are $50 for 1 day, $80 for a 2 day, and $100 for an annual pass. Based on these prices, the marginal cost of visiting dollywood the second day is _________, and the third day is _________, and the fourth day is _____________. a) 40,33.33,25 b) 80, 100, 100 c) 30, 10, 10 d) 30, 20, 0
d) 30,20,0
if in the past, you always painted your own house, but now you hire a painting contractor to do the work, what effect does this have on GDP? a) GDP at first rises but then falls b) GDP falls as a result of this changed c) GDP is unaffected by this change d) GDP rises a result of this change.
d) GDP rises as a result of this change.
which of these is likely to have the smallest impact on a country's growth in real GDP per capita? a) a 10% growth in the labor force b) a 10% growth in technology c) equal rates in growth in technology, the population and the labor force all will have an equal impact on economic growth d) a 10% growth in the population
d) a 10% growth in the population
in the market for widgets, more sellers exit the market at the same time that consumer preferences are changing, such that people like widgets a lot MORE than before. If the rate at which sellers are ENTERING the market is FASTER than the rate that consumer preferences are changing, we can expect... a) an increase in the equilibrium price and quantity of widgets b) a decrease in the equilibrium price and quantity of widgets. c) no change d) a decrease in the equilibrium price and an increase in equilibrium quantity of widgets.
d) a decrease in the equilibrium price and an increase in equilibrium quantity of widgets.
The price of apples has recently fallen in the marketplace. From this information, we can safely infer that a) the supply of apples recently decreased b) a shortage of apples must have existed at the previous price c) the demand for apples recently increased d) a surplus of apples must have existed at the previous price.
d) a surplus of apples must have existed at the previous price
which fiscal policy will increase Aggregate supply a) increasing tax rates on business b) increasing tax rates on consumers c) instituting more regulations on businesses d) allocating more money for federal student loans.
d) allocating more money for federal student loans (increases money supply)
Which of these is included in gross private domestic investment? a) the purchase of a new TV by a household b) purchases of common stock by investors c) highway construction by a government contractor d) an increase in business inventories.
d) an increase in business inventories.
which of these does NOT increase productivity? a) improvements in labor quantity b) research and development c) capital investment d) an increase in the money supply
d) an increase in the money supply
What impact will a falling price level have on real GDP? a) real GDP will rise b) real GDP will fall c) real GDP will fall and then rise d) changes in the price level do not impact real GDP.
d) changes in the price level do not impact real GDP.
if a government collects $1400 in tax revenue and spends $1600, it has a a) public debt of $200 b) surplus of $200 c) balanced budget of $200 d) deficit of $200
d) deficit of $200
Everything else the same, if investment expenditures rise by $300 billion and imports increase by $300 billion, then GDP a) increases by $600 billion b) increases by $300 billion c) decreases by $600 billion d) does not change
d) does not change
A person will decide not to attend a concert if the marginal cost of attending the concert: a) is the same as the cost of staying home b) is less than the marginal benefit c) is less than the cost of attending a different concert d) exceeds the marginal benefit
d) exceeds the marginal benefit
When the supply of surfboards increases and the demand for surfboards falls simultaneously, the price of surfboards will: a) rise b) fall initially and then rise as demand increased to meet the increased supply c) either rise or fall d) fall
d) fall
to have long term economic growth, the production function suggests a) increasing government oversight of business decisions b) redistributing income from the wealthy to the poor c) keeping interest rates high to encourage saving d) increasing the availability of technology, capital and labor
d) increasing the availability of technology, capital and labor
If the British pound appreciates against the dollar, England buys ______________ U.S goods, causing the U.S. aggregate demand curve to shift to the ______________ a) fewer; right b) fewer; left c) more;left d) more;right
d) more;right
What impact will a rising price level have on nominal GDP a) nominal GDP will fall and then rise b) nominal GDP will fall c) changes in the price level do not impact nominal GDP d) nominal GDP will rise.
d) nominal GDP will rise.
When the supply of coffee decreases and the demand for coffee increases simultaneously, the price of coffee will: a) either rise or fall b) fall c) fall initially and then rise as demand increases to meet the increased supply d) rise
d) rise.
If a market is NOT at equilibrium: a) supply will shift until the market reaches equilibrium b) both supply and demand will shift until the market reaches equilibrium c) demand will shift until the market reaches equilibrium d) the price will change, and in response, market participants will move along the existing supply and demand curves until the market reaches equilibrium.
d) the price will change, and in response, market participants will move along the existing supply and demand curves until the market reaches equilibrium.
Scott, who has a PhD in physics, waits on tables for a living. Scott is categorized as a) unemployed b) not in the labor force c) a discouraged worker d) underemployed.
d) underemployed.
Opportunity costs exist because a) there are opportunities to find ways to reduce costs b) sellers are unwilling to give up their product without a price c) buyers always have an opportunity to go to another seller d) using resources for one activity means that their use elsewhere must be given up
d) using resources for one activity means that their use elsewhere must be given up
Opportunity costs exist because a) there are opportunities to find ways to reduce costs. b) sellers are unwilling to give up their product without a price c) buyers always have an opportunity to go to another seller d) using resources for one activity means that their use elsewhere must be given up
d) using resources for one activity means that their use elsewhere must be given up
Opportunity cost exist because a) buyers always have an opportunity to go to another seller b) there are opportunities to find ways to reduce costs. c) sellers are unwilling to give up their product without a price d) using resources for one activity means that their use elsewhere must be given up.
d) using resources for one activity means that their use elsewhere must be given up.
Aggregate Supply increases when a) business expectations are pessimistic b) there is a decrease in firms market power c) subsidies are reduced d) input prices rise
f
Physical capital includes a) the ability to take physical resources and use them in creative ways to produce goods and services. b) land and raw resources that come from the earth c) the physical talents of people d) manufactured products that are used to produce other goods and services
f
There are 15 million people living in Marketstan, of whom 9 million are working and 1 million are actively looking for work. What is Marketstan's unemployment rate? a) 10% b) 11.1% c) 1% d)
f
Which of these will shift the SRAS curve to the right? a) an increase in the price of oil b) an increase in immigration from other countries c) an increase in the actual price level d) an increase in the minimum wage
f
if an economy is producing at a level beyond full employment using contractionary fiscal policy to reduce AD means a tradeoff between _________________ price levels and ______________ output a) higher; lower b) higher;higher c) lower;lower d) lower;higher
f
if an economy is producing at a level beyond full employment, using contractionary fiscal policy to reduce AD means a tradeoff between ______________ price levels and ______________ output a) lower;lower b) higher;lower c) lower;higher d) higher;higher
f
if interest rates falls, the burden of a nation's public debt will ___________ and it will be _____________ difficult to service its debt a) rise;more b) rise;low c) fall;more d) fall;low
f
if interest rates rise, the burden of a nation's public debt ______________ and the probability of a default ___________ a) falls;rise b) rises;rises c) falls;falls d) rises;falls
f
in the short run, the aggregate supply curve is _________________ because input prices are _____________ a) positively sloped; not completely flexible b) vertical ; not completely flexible c) positively sloped ; completely flexible d) vertical ; completely flexible
f
when the economy is underperforming and policymakers pursue expansionary fiscal policy, they express a willingness to trade off _____________ output for a _______________ price level. a) higher;lower b) lower;lower c) lower;higher d) higher;higher
f
which event will shift the AD curve to the right? a) an increase in imports b) a new government program implemented to eliminate poverty c) a decrease in exports d) a rise in the interest rate
f
which fiscal policy will increase Aggreate supply a) allocating more money for federal student loans b) instituting more regulations on business c) increasing tax rates on consumers d) increasing tax rates on businesses
f
which of these is an example of contractionary fiscal policy? a) sending taxpayers a $600 rebate b) building a new interstate highway c) increasing federal spending to renovate college campuses d) reducing military spending
f
which of these will increase aggregate supply? a) the secretary of education finalizes rules that make it more difficult students to obtain federal loans b) the president raises tariffs on Chinese imports c) the president asks Congress for a $200 billion for rebuilding roads and bridges d) the EPA announces new, tighter standards for lead in dust on floors and windowsills.
f
which of these will shift the SRAS curve to the right? a) an increase in the actual price level b) an increase in the price of oil c) an increase in immigration from other countries d) an increase in the minimum wage
f
When Main Street Bank buys new automatic teller machines, the quantity of _____ in the economy increases. a) entrepreneurial ability, technology and ideas b) labor c) physical capital d) land and natural resources
office
an increase in demand causes the equilibrium price to _________ and the equilibrium quantity to _______. a) rise; fall b) rise; rise c) fall; rise d) fall; fall
office hours
Karl's Keychain company produces keychains that sell for $1 each. On Jan 1, 2015, the company had an inventory of 8,000 keychains. During 2105, the company sold 900,000 keychains. At the end of the business year on Dec 31, 2015, the companies inventory of keychains was 9,000. What was the value of Karl's total production and inventory investment in 2015? a) production = $891,000, inventory investment = $17,000 b) production = $900,000; inventory investment - $9,000 c) production = $901,000; inventory investment = $1,000 d) production = $899,000; inventory investment = $1,000
office hours Perhaps c