econ 202 midterm
In a small closed economy investment is $20 billion and private saving is $22 billion. What are public saving and national saving?
-$2 billion and $20 billion
Mike and Sandy are two woodworkers who both make tables and chairs. In one month, Mike can make 4 tables or 20 chairs, where Sandy can make 6 tables or 18 chairs. Given this, we know that the opportunity cost of 1 chair is
1/5 table for Mike and 1/3 table for Sandy.
Year Price of Pork Price of Corn 2008 $20 per pound $12 per bushel 2009 $25 per pound $18 per bushel If 2008 is the base year, then the CPI for 2009 was
136.1
A good is produced by a firm in 2007, added to the firm's inventory in 2007, and sold to a household in 2008. As a result, on net,
2007 GDP increased and 2008 GDP did not change.
Assume that Falda and Varick can switch between producing wheat and producing cloth at a constant rate. Quantity Produced in 1 Hour Bushels of Wheat Yards of Cloth Falda 8 12 Varick 6 15
3/2 yards of cloth and Varick's opportunity cost of one bushel of wheat is 5/2 yards of cloth.
. If 2008 is the base year, then the inflation rate in 2009 was
36.1 percent.
You put $275 in the bank one year ago and forgot about it. The bank sends you a notice that you now have $291.50 in your account. What interest rate did you earn?
6 percent
Price Aaron's Quantity Demanded Angela's Quantity Demanded Austin's Quantity Demanded Alyssa's Quantity Demanded $0.00 20 16 4 8 $0.50 18 12 6 6 $1.00 14 10 2 5 $1.50 12 8 0 4 $2.00 6 6 0 2 $2.50 0 4 0 0 Whose demand does not obey the law of demand?
Austin's
Which of the following is true?
Efficiency refers to the size of the economic pie; equality refers to how the pie is divided.
An increase in a government's budget deficit will result in
Higher interest rates, lower levels of investment.
Which of the following is correct?
Nominal GDP measures current production using current prices, whereas real GDP measures current production using base-year prices.
Which of the following equations represents GDP for a closed economy?
Y = C + I + G
The problem of moral hazard arises because
after people buy insurance, they have less incentive to be careful about their risky behavior.
To maximize gains from trade, Varick should specialize in the production of
b. cloth.
Economics is the study of
b. how society manages its scarce resources.
If 2002 is the base year, then the inflation rate in 2005 equals
d.
In the circular-flow diagram, which of the following is not a factor of production?
d. money
A likely example of substitute goods for most people would be
d. pencils and pens.
Other things the same, when the interest rate rises, the present value of future revenues from investment projects
falls, so investment spending falls.
For an economist, the idea of making assumptions is regarded generally as a
good idea, since doing so helps to simplify the complex world and make it easier to understand.
Which of the following best illustrates the human capital of a survivor stranded on an island?
her previous training in a survival course
For an economy as a whole,
income must equal expenditure.
A decrease in the price of a good would
increase the quantity demanded of the good.
What word do economists use to refer to the purchase of goods that will be used in the future to produce more goods and services?
investment
Productivity is the
key determinant of living standards, and growth in productivity is the key determinant of growth in living standards.
Rapid population growth
may depress economic prosperity by reducing the amount of capital which each worker has to work with
At the broadest level, the financial system moves the economy's scarce resources from
savers to borrowers.
Wheat is the main input in the production of flour. If the price of wheat decreases, then we would expect the
supply of flour to increase.
For most students, the largest single cost of a college education is
the wages given up to attend school.
If an economy is producing efficiently, then
there is no way to produce more of one good without producing less of another good.
