Econ 1500 exam 1 Tyler Bowles

Which of the following play a role in determining where oranges will be produced in the U.S.? A. Self interest. B. Economic decision rule. C. Adam Smith's Invisible Hand. D. All of the above are correct.

D

Which of the following represents an economy's output or GDP? A. The total income households receive from providing all of the factors of production to businesses. B. The wages households receive from providing labor to businesses. C. The market value of an economy's production of final goods and services. D. Both A and C are correct.

D

Which of the following was mentioned in the Chapter 3 lecture as an example of an American institution? A. English Common Law. B. The Electoral College. C. A culture of innovation and work. D. All of the above.

D

Which statement is not consistent with the law of supply? A. More of a good will be supplied, the higher the price, other things constant. B. Less of a good will be supplied, the lower the price, other things constant. C. Quantity supplied of a good is directly related to the good's price. D. Quantity supplied of a good is inversely related to the good's price.

D

Why do farmers in Idaho produce potatoes not oranges? A. It is in their self interest to do so. B. Tradition. C. Potato production is profitable, Oranges would not be. D. Both A and C are correct.

D

A given increase in the price of natural gas will cause? A. decrease in quantity demanded. B. decrease in quantity supplied. C. an increase in supply and a decrease in demand. D. Both A and B are correct

A

A machinist who loses her job due to imports and cannot find another job due to the lack of jobs for machinists would most likely be classified as which type of unemployment? A. Structural B. Cyclical C. Frictional D. Classical

A

Classical economics would argue: A. that labor markets clear and therefore unemployment will not be a problem in the long run? B. Laissez Faire is the appropriate response to increases in the unemployment rate. C. supply is critical, demand is not. D. All of the above are correct.

A

During the Covid recession, the unemployment rate reached 14.7% or 23 million people in April 2020. This level of unemployment: A. includes some cyclical unemployment. B. comprised of only frictional unemployment. C. comprised of only structural unemployment. D. comprised of only structural and frictional unemployment.

A

Households (i.e., consumers): A. ultimately determine the answer to the question, What to produce? B. are on the demand side of factor market and the supply side of goods market. C. are on the supply side of both the factor market and goods market. D. None of the above are correct.

A

Households are on the: A. supply side of factor markets and the demand side of goods markets. B. demand side of factor markets and the supply side of goods markets. C. supply side of both factor markets and goods markets. D. demand side of both factor markets and goods markets.

A

If the price in a market is above its equilibrium level, there will be a: A. surplus and downward pressure on price. B. surplus and upward pressure on price. C. shortage and downward pressure on price. D. shortage and upward pressure on price.

A

In the U.S. market based economy, most economists would consider which of the following is an example of the U.S. government properly conducting its role as a referee? A. Prosecuting Sam Bankman-Fried for fraud. B. Building a highway. C. Building aircraft carriers. D. Subsidizing the production of sugar.

A

In the context of the circular flow model, in which market does the supply and demand for baby formula interact to determine the price of baby formula? A. Goods B. Resources C. Factors D. Both A and B are correct.

A

John Maynard Keynes wrote ___________while Adam Smith wrote__________: A. General Theory; Wealth of Nations. B. General Theory; Origin of Species. C. Moby Dick; Wealth of Nations. D. Wealth of Nations; General Theory.

A

The U.S. Government's response to the unemployment that emerged in 2020: A. Reflected a Keynesian view of the economy. B. Likely increased the time it took to reduce cyclical unemployment. C. Was consistent with a policy of Laissez Faire. D. All of the above are correct.

A

The law of supply states that, other thing equal, as the price of a good goes: A. up, the quantity supplied goes up. B. up, the supply goes down. C. down, the quantity supplied goes up. D. down, the supply goes down.

A

Keynesian economics is most interested in: A. Economic growth. B. Technological Innovation. C. Recessions. D. A and B are both correct.

C

The principle of increasing marginal opportunity cost does not hold in which of the following cases? A. All inputs are equally useful in the production of all goods. B. Some inputs are more useful in the production of certain goods. C. Some inputs are less useful in the production of certain goods. D. Each input is useful in the production of a limited number of goods.

A

The text attributes the growth of economies over the last 200 years largely to: A. the development of markets. B. the discovery of additional resources. C. a decrease in the size of the world population. D. Government social policies.

A

Trade: A. Is based on voluntary exchange. B. Requires coercion. C. Allows the world to solve the scarcity problem. D. All of the above are correct.

A

When quantity supplied is greater than quantity demanded, prices tend to: A. fall. B. rise. C. stay the same. D. remain constant until the next season.

A

Which of the following is not associated with Keynesian economics? A. A policy prescription of Laissez Faire. B. The Great Depression. C. A focus on aggregate demand. D. A focus on the short run.

A

Which of the following is not one of the three economic questions faced by all societies? A. How to eliminate scarcity. B. What to produce. C. How to produce. D. Who gets what is produced.

A

Which word or phrase best explains what determines the average price and quantity sold per week in theU.S. of the iPhone 14 Pro? A. The price mechanism. B. government control. C. tradition. D. All of the above

A

Markets: A. Often have shortages but not surpluses. B. Often have surpluses but not shortages. C. Typically have neither shortages or surpluses that persist for very long. D. Set fair prices.

C

A decrease in price of a Google phone would: A. Increase the demand for Google phones. B. Increase quantity demanded for Google phones. C. Increase the demand for iPhones. D. Cause inflation.

B

A point outside of an existing PPC: A. Is presently possible. B. Could become possible with better technology. C. Likely will never be possible. D. None of the above are correct.

B

According to Bowles, the current __________ being experienced in the US is a result of too ___________ in the ____________ market. A. deflation; much demand; factor. B. inflation; much demand; goods. C. inflation; much demand; factors. D. inflation; too little supply; factors.

B

An improvement in the genetics of chickens, which causes them to grow faster will: A. increase the quantity supplied of chicken meat. B. Increase the supply of chicken meat. C. Increase the demand for chicken meat. D. Both B and C are correct.

B

Businesses are on the: A. supply side of factor markets and the demand side of goods markets. B. demand side of factor markets and the supply side of goods markets. C. supply side of both factor markets and goods markets. D. demand side of both factor markets and goods markets.

B

California will have a comparative advantage in producing oranges compared to Alaska if, A. California is good at producing oranges B. California has a lower opportunity cost of producing oranges. C. California has warm, sunny weather. D. Alaska has cold weather.

B

Consider chicken, an inferior good. A decrease in incomes will: A. Decrease the demand for chicken. B. Increase the demand for chicken. C. Decrease the quantity demanded for chicken. D. Increase the quantity demanded for chicken.

B

Countries gain from trade by producing: A. the goods they produce at the highest opportunity cost. B. the goods they can produce at the lowest opportunity cost. C. where the production possibility curve has a slope of -1. D. all goods in equal amounts.

B

Economics as a discipline A. is a very narrow discipline concerned primarily with three issues - interest rates, inflation and the stock market. B. typically assumes that individuals are capable of comparing costs and benefits associated with choices. C. typically assumes that individuals primarily make decisions based on a social as opposed to an individual perspective. D. All of the above correct.

B

For a given opportunity cost to the person, a rational individual chooses the option that has: A. the lowest benefit. B. the highest benefit to that individual. C. the highest benefit to society. D. the highest social status.

B

For which of the following questions can the discipline of economics provide an explanation as to the correct answer? A. For Whom to Produce? B. How to Produce? C. What is the correct income distribution? D. None of the above.

B

If you make decisions as assumed by economists, you are working full time as a "sales bro" or "sales gal"for Fox Pest Control in Texas this semester rather than the alternative of attending USU in Logan because you perceive the _____________ of being a "sales bro/gal" as less than the ________________ of being a"sales bro/gal this semester. A. Marginal Benefit; Marginal Cost. B. Marginal Cost; Marginal Benefit. C. Total Cost; Total Benefit. D. Total Benefit; Total Cost.

B

In The Wealth of Nations, Adam Smith: A. Argued that Mercantilism was a system that produced wealthy nations. B. Argued in favor of the Market system as a source of economic growth and prosperity. C. Focused on the role of gold as an explanation of the nature and causes of the wealth of nations. D. All of the above are correct.

B

In a Market economy, A. the government answers the questions of what, how, and for whom. B. markets answer the questions of what, how, and for whom. C. society as a whole owns the factors of production (resources). D. Laissez faire is not an acceptable principle.

B

In explaining why a typical taxpayer living in Park City, UT is helping to pay for your education at Utah State University, your best economic argument would rely on: A. some concept of fairness. B. the notion of external benefits. C. the notion of external costs. D. the coercive power of government.

B

In terms of American institutions, the ___________ system is most closely connected with _________ and the __________ is connected with ______________. A. Economic; Locke; political; Smith. B. Economic; Smith; political; Locke. C. Economic; Marx; political; Jefferson. D. Legal; Smith; Economic; Locke.

B

In the 20th century, socialism in practice (e.g., the Soviet Union) emerged as an economic system in which the three economic questions (what, how and for whom), were primarily answered by: A. peasants. B. government. C. the Lord of the Manor. D. markets.

B

Keynesian economics holds that: A. the invisible hand is exceptionally effective at limiting the problem of unemployment. B. unemployment may develop in a market economy and persist. C. socialism is better than a market economy. D. the government should guarantee a job for everyone.

B

Markets, without government intervention, likely will: A. Produce too many college graduates due to external benefits of education. B. Produce too few college graduates due to external benefits of education. C. Produce too many college graduates due to external costs of education. D. None of the above are correct.

B

The total labor force is 100,000 out of a possible working age population of 300,000. The total number of unemployed is 5,000. The labor force participation rate is: A. 10 percent B. 33 percent C. 50 percent D. 80 percent

B

The total labor force is 100,000 out of a possible working age population of 300,000. The total number of unemployed is 5,000. What is the unemployment rate? A. 2.5 percent B. 5.0 percent C. 8.0 percent D. 10.0 percent

B

Classical economics was interested in: A. Economic growth. B. Technological Innovation. C. Recessions. D. A and B are both correct.

D

To understand and appreciate the breadth of Economics (as well as perhaps significantly affecting howyour think of yourself), Professor Bowles suggested reading: A. A Monetary History of the United States by Milton Friedman. B. Thinking, Fast and Slow by Daniel Kahneman. C. Arguing with Zombies by Paul Krugman. D. Joe Biden: Promises Kept by Joe Biden.

B

Typically, USU would have more juniors and seniors on its men's basketball team compared to Duke since: A. USU players are not rational. B. Duke players face a higher marginal cost of staying in college. C. USU players face a higher marginal cost of staying in college. D. Duke players face a higher marginal benefit of staying in college.

B

Which of the following would cause a change in quantity demanded? A. A change in income. B. A change in the price of the good. C. A change in tastes and preferences. D. A change in the price of a substitute good.

B

A Market economy: A. is based on coercion. B. aligns incentives in such a way that individual decisions result in socially undesirable outcomes. C. typically results in goods produced efficiently as inefficient producers are allowed to fail. D. typically results in goods produced efficiently as inefficient producers are subsidized by the government

C

According to the Invisible Hand Theorem, the market system will A. allocate resources inefficiently. B. guarantee equality of opportunity. C. produce goods that people want and demand. D. eliminate Scarcity.

C

According to the Invisible Hand Theorem, the market system will A. distribute income equally. B. eliminate scarcity. C. produce goods efficiently. D. None of the above are correct.

C

Compared to the market system, both feudalism and mercantilism: A. relied on a central government to decide what and how to produce. B. relied on tradition to answer the three economic questions. C. relied much less on markets to allocate resources. D. produced rapid economic growth.

C

Graphically, a change in price causes: A. both supply and demand to shift. B. the demand curve to shift. C. a movement along a given supply curve, not a shift. D. the supply curve to shift.

C

In addition to The Wealth of Nations, Adam Smith is also the author of: A. On Human Understanding B. Two Treatises of Government C. A Theory of Moral Sentiments D. All of the above were written by the great Adam Smith

C

In the U.S. market based economy, most economists would consider which of the following is an example of the U.S. government properly performing its role as an actor? A. Establishing labor laws that restrict businesses' freedom to hire and fire whomever they want. B. Building a sports stadium and giving it away to the owner of the Dallas Cowboys. C. Building aircraft carriers for national defense. D. Establishing labor laws that restrict an individual's freedom to work for whom he/she wants.

C

In the supply and demand model, better technology causes a(n) _________ in ____________ which leads to ________ prices. A. decrease; demand; lower. B. increase; quantity supplied; lower. C. increase; supply; lower. D. increase; supply; higher.

C

John Locke: A. argued that elites have the right to inform others of the truth. B. argued that some individuals have an inherent right to rule others. C. argued in favor of individual rights, equality and access to the truth. D. All of the above are correct.

C

Which of the following is(are) scarce? A. Clean water. B. Electricity. C. Workers. D. All of the above are correct.

D

The more the current price is above the equilibrium price, the: A. greater the resulting shortage will be. B. smaller the resulting shortage will be. C. greater the resulting surplus will be. D. smaller the resulting surplus will be.

C

Which of the following best describes the source of comparative advantage among individuals? A. All individuals have about the same set of talents. B. Different activities or goods require different skills. C. Individuals have different skills and different goods require different skills. D. Some individuals are good at everything.

C

Which of the following is/are true concerning trade and specialization. For two states to benefit from specialization and trade? A. All that is required is a differences in goods. B. All that is required is a differences in resources. C. Both differences in goods and resources are required. D. All of the above are correct.

C

Which of the following will shift the PPC out? A. Less technology. B. Less capital. C. More labor. D. Both A and B are correct.

C

Which statement best summarizes the Invisible Hand theory? A. Social forces channel individual self-interest to achieve the common or social good. B. It requires political forces to channel individual self-interest to achieve the common good. C. Markets typically channel individual self-interest to achieve the common or social good. D. Socialism results in a more equitable distribution of income.

C

Which would most likely suggest that the current inflation problem in the U.S. is the fault of government policy? A. Krugman B. Keynes C. Friedman D. Both B and C are correct.

C

Why doesn't Utah produce cars? A. Technologically impossible. B. Too far from big markets. C. Opportunity cost is too high. D. Both A and B are correct.

C

A general lack of individuals willing to work in fast-food restaurants at the existing wage for such workers would drive ______ the _________ for unskilled workers in the _________ market. A. down; wage rate; factor market. B. up; wage rate; goods market. C. down; price; factor market. D. up; wage rate; factor market.

D

Adam Smith was of the opinion that which of the following was a source of national wealth? A. A policy of laissez faire. B. Specialization based on comparative advantage. C. Trade and markets. D. All of the above are correct.

D

Adam Smith's book, The Wealth of Nations: A. Argued that Mercantilism would result in the correct answer to the question of what to produce. B. Argued in favor of primarily using political forces to answer the question of what to produce. C. Supported a policy of government intervention into the economy. D. None of the above are correct.

D

Adam Smith: A. Thought that a market based economic system was superior to Mercantilism for maximizing the wealth of a nation. B. Thought a market system would result in goods being produced efficiently. C. Thought a market system would tend to result in the correct combination of goods being produced. D. All of the above are correct.

D

An increase in equilibrium price and a decrease in equilibrium quantity is most likely the result of: A. an increase in demand. B. a decrease in demand. C. an increase in supply. D. a decrease in supply.

D

Applying the economic decision rule, you would attend USU this semester rather than work full time forFedX if you perceive that the: A. Marginal benefit to society of you attending USU > marginal cost to you of attending USU. B. Total benefit to you of attending USU > marginal cost to you of attending USU. C. Marginal benefit to society of you attending USU < marginal cost to you of attending USU. D. Marginal benefit to you of attending USU > marginal cost to you of attending USU.

D

As of December 2022, the U.S. economy: A. had an unemployment rate of 3.5 percent. B. has 25.0 million cyclically unemployed individuals. C. is experiencing no cyclical unemployment. D. Both A and C are correct.

D

Consider the world natural gas market for which Russia is a major producer. The abrupt closing of Russian natural gas wells would cause? A. A decrease in supply and lower prices for natural gas. B. A decrease in demand and higher prices for natural gas. C. An increase in supply and lower prices for natural gas. D. An decrease in supply and higher prices for natural gas.

D

If President Biden argues that trade with China is killing the U.S. economy, he: A. Probably doesn't appreciate the concept of comparative advantage. B. Is wrong if he means the U.S. as a whole is hurt by trade. C. He may be correct if he means that trade with China is hurting some U.S. workers. D. All of the above are correct.

D

If both Utah and Colorado specialize in the good in which it has a comparative advantage and then trade with the other state, A. joint production will decrease. B. joint consumption will increase. C. joint production will increase. D. Both B and C are correct.

D

If the hourly wage of U.S. workers is $16, the hourly wage of Mexican workers is $4, and U.S. workers produce 5 times as much output per hour as Mexican workers, then, other things equal, it would be efficient to locate production facilities in: A. the United States since the cost per unit of output will be higher. B. the United States since the cost per unit of output will be lower. C. Mexico since the cost per unit of output will be higher. D. Mexico since the cost per unit of output will be lower.

D

If there were decreasing marginal opportunity costs, the production possibility curve would be: A. flat. B. straight. C. bowed out. D. bowed in.

D

In a Mercantilist system: A. markets, rather than political forces, decide what and how to produce. B. serfs make the central economic decisions. C. governments let the market decide what to produce. D. governments distributed the rights to produce.

D

In the United States, which is primarily used to determine how cars are produced? A. Government Forces B. Tradition C. Political Forces D. Markets

D

In the United States, which is used to determine the wages of welders? A. Social Forces B. Tradition C. Political Forces D. Markets

D

In the sense of cause and effect, which of the following logically fit together? A. 20th century socialism; inefficient economy. B. Markets; Chinese economic growth. C. Mercantilism; American Revolution. D. All of the above are correct.

D

Prices A. change based on changes in supply and demand. B. allocate resources. C. answer the question of what to produce. D. All of the above are correct.

D

Professor Bowles would argue that the timing and pattern of economic growth shown in Figure 2-6 in the text is a consequence of: A. Enlightenment ideas of individual freedom and reason. B. the development of the market system in Europe in the 18th century. C. a general rejection in Britain and North America of the ideas expressed in Smith's Wealth of Nations. D. A and B are correct but not C.

D

Scarcity results in: A. opportunity costs. B. the no free lunch principle. C. the necessity of choice. D. All of the above are correct.

D

Suppose your wage is increased from $7.50 per hour to $10.00 per hour and you decide to switch from part-time to full-time work. Your behavior can best be explained by the fact that your supply of labor curve is: A. Horizontal B. Vertical C. Downward-sloping D. Upward-sloping

D

The General Theory supported_________ ; Wealth of Nations argued ________ A. the notion that the labor market would clear quickly; in favor of the invisible hand. B. the invisible hand theory; that the labor market would clear quickly. C. active government fiscal policy; against a policy of Laissez Faire. D. government intervention in the economy; that the labor market would clear quickly.

D

The U.S. Government has an economic justification to and typically does: A. Produce public goods. B. Promote competition. C. Limit fraud and corruption. D. All the above are correct.

D

The business cycle consists of several stages or phases. Which is the accurate sequence? A. Recession, peak, upturn, trough. B. Recession, peak, trough, upturn. C. Recession, upturn, peak, trough. D. Recession, trough, upturn, peak.

D

The pattern of specialization and trade that happens between Idaho and Florida: A. Is based on social forces. B. Is based on laissez faire. C. Requires markets. D. Both B and C are correct.

D

Which contributed to the development to of Keynesian economics? A. Persistent high unemployment of the 1930s. B. The Great Depression. C. The apparent ineffectiveness of Laissez Faire Policy by 1937. D. All of the above are correct.

D

Which explains why average income per capita in the world started to increase rapidly around 1750? A. Broader adoption of specialization and trade. B. Broader adoption of markets as the system for answering the questions of what, how, and for whom. C. Smarter Kings and Queens. D. Both A and B are correct but not C.

D

Which follow from John Locke's idea that individuals by nature are free and equal? A. The rule of law as opposed to the rule of the strong. B. A government of the people, by the people, for the people. C. Toleration of the views of others. D. All of the above.

D

Which of the following are associated with Adam Smith and his book, Wealth of Nations: A. Individual choice. B. The Invisible Hand. C. The Market System. D. All of the above are correct.

D

Which of the following is (are) true? A. The number of individuals employed in December 2021 was lower than in December 2019. B. The number of individuals employed in December 2022 was higher than in December 2019 but by less than 0.5 percent. C. From December 2019 to December 2022, the U.S. labor force participation rate fell. D. All above are correct.

D

Which of the following is a cause of structural unemployment? A. Technological Innovation. B. Competition from imports. C. Recessions. D. Both A and B but not C.

D

Which of the following is the most likely cause of cyclical unemployment? A. Technological Innovation. B. International Trade. C. Increase in the labor force participation rate. D. A recession.

D

Two countries that specialize their production based on comparative advantage and then trade with each other will be able to: A. both produce and consume more. B. produce more and consume less. C. produce less and consume more. D. both produce and consume less.

a