Econ 2301 Exam 1 practice – Flashcards
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Which of the following is included in the study of macroeconomics?
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Unemployment in the nation.
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A straight line or curve representing a relationship between two variables can shift when a factor not included on the vertical axis or horizontal axis changes.
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True
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According to marginal analysis, you should spend more time studying economics if the extra benefit from an additional hour of study:
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outweighs the extra cost.
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The production possibilities curve shows that:
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some of one good must be given up to get more of another good in an economy that is operating efficiently.
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Any point on the production possibilities curve illustrates:
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maximum production combinations.
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If an economy is operating at a point inside the production possibilities curve,
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its resources are not being used efficiently.
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Economic growth may be represented by a(n):
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outward shift of a production possibilities curve.
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The fact that price and quantity demanded are related negatively illustrates the:
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law of demand.
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In economics, the demand for a good refers to the amount of the good people:
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are willing to buy at various prices.
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Which of the following is true for the law of demand?
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There is an inverse relationship between the price of a good and the quantity of the good demanded.
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Which of the following will cause the demand curve for a good to shift to the right?
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Increase in the price of a substitute good.
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The law of demand is graphically demonstrated by a(n):
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downward-sloping demand curve.
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The law of supply states that:
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there is a positive relationship between the price of a good and the quantity of it offered for sale by suppliers.
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If tofu is a normal good, an increase in income will:
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shift the demand curve for tofu to the right.
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The demand schedule for a good shows:
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the specific quantity of the good that people are willing and able to buy at different prices.
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Which of the following would not cause market demand for a normal good to decline?
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An increase in the price of a substitute.
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An increase in the demand for a product means that the:
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demand curve shifts to the right.
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Other things being equal, the effect of a decrease in the price of DVDs on the market for DVD players is a(n):
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rightward shift in the demand curve for DVD players.
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Which of the following pairs of goods would be considered complementary?
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Computers and computer software.
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The supply schedule shows the specific quantity of a good that suppliers are willing and able to:
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provide at different prices.
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When economists say the supply of a product has decreased, they mean that:
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the supply curve has shifted to the left.
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In supply and demand analysis, a technological improvement in the production of good X causes the:
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supply curve for X to shift to the right.
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A shortage of product means a(n):
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excess demand of the product.
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How would a decrease in the price of the feed grains used to feed cattle affect the market for beef?
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The supply of beef would increase, decreasing beef prices.
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When the price of a good is above its equilibrium price, a:
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surplus puts downward pressure on the price.
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The price of a good will rise when:
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there is a shortage of the good.
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If the demand for a good decreased, what would be the effect on the equilibrium price and quantity?
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Price would decrease, and quantity would decrease.
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An increase in consumers' incomes will have what effect on the equilibrium in the restaurant meals market?
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Price will increase, and quantity will increase.
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Ceteris paribus, an increase in the supply of a good causes which of the following?
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Lowers the equilibrium price, and increases the quantity bought and sold.
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A market consequence of a price floor program is that:
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a surplus of the product will develop.
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A price floor would be established in cases where the government believed the market equilibrium price would:
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be too low.
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A price ceiling that sets the price of a good below market equilibrium will cause:
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An increase in quantity demanded of the good. A decrease in quantity supplied of the good. A shortage of the good.
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Gross domestic product is officially measured by adding together the:
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market value of all final goods and services produced within the borders of a nation.
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Which of the following would be counted as a final good for inclusion in GDP?
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A piece of glass bought this year by a consumer to fix a broken window.
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Which of the following expenditures would not be included in GDP?
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Purchase of a silver cup previously sold new in 1950.
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Gross domestic product (GDP) includes:
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only final goods and services.
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Income received minus personal taxes is called:
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disposable personal income
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Personal consumption expenditures include:
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all newly produced goods and services bought by households.
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Which of the following spending is larger for U.S. GDP?
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State and local government.
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The largest component of GDP is:
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personal consumption expenditures.
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Gross domestic product is a measure of:
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market value of the output produced during a period.
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The sum of payments made to resource owners for the use of their resources is:
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national income.
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Using the income approach, an estimate of the value of capital worn out producing GDP is:
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capital consumption allowance or depreciation
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The income approach to measuring GDP includes:
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compensation for employees, net interest, rent, net profits, and indirect business taxes and depreciation.
