question

In examining two variables, we find that as one variable changes, the other changes. These variables are said to be A) ceteris paribus related B) independent. C)statistics. D)casually related. E) correlated

answer

E) correlated

question

If Jessie studies economics for two hours instead of going to the movies with her friends, then A) Jessie is ignoring a sunk cost. B)the opportunity cost of studying is the missed movie. C). Jessie is not responding to any incentives. D). Jesse definitely is making a rational choice. E). The benefit of studying is the missed movie.

answer

B)the opportunity cost of studying is the missed movie.

question

The Latin term "ceteris paribus" means A) " other things remaining the same" B) False unless proven true C) obviously true D) after this, therefore beacuse of this E) what is true of the whole is not necessarily true of the parts."

answer

A) " other things remaining the same"

question

The marginal cost of an activity___ as you do more of it. A) decreases B) donest change C) changes only if the marginal benefit of the activity changes D) increase E) changes only if the marginal benefit of the activity does not change

answer

D) increase

question

A positive statement. A) cannot be negative. B) cannot be tested. C) depends on someone's value judgment. D)might be right or wrong E) must always be right

answer

D) might be right or wrong

question

Economics is the social science that studies A)The psychology of individuals and bushiness. B) how people make choices to cope with scarcity C)the real reasons people buy goods and services. D)how choices made in the social interest could eliminate scarcity. E) whether a nation has enough natural resources.

answer

B) how people make choices to cope with scarcity

question

Suppose you eat two hamburgers for lunch. The marginal benefit of the first burger is____ of the second burger A) not related to the marginal benefit B) equal to the marginal befit C)equal to the marginal cost and the marginal benefit D)smaller than the marginal benefit E)larger than the marginal benefit

answer

E)larger than the marginal benefit

question

The important characteristic of normative statements is that they A) explain what really exists. B)help guide to what will normally occur if some economic variable changes its value. C)are based on somebody's values and cannot be tested. D) do not use the ceteris paribus assumption. E) explain what normally happens in the real world.

answer

C)are based on somebody's values and cannot be tested.

question

The benefit of an activity is A) purely objective and measured in dollars. B) the gain or pleasure that it brings. C) the value of its opportunity cost. D) measured by what must be given up to get one more unit of the activity. E) not measurable on the margin.

answer

B) the gain or pleasure that it brings

question

Which of the following is a macroeconomic issue? A) why has economic growth been rapid in china B) why has unemployment risen nationwide? C)why did overall production increase within the untied states last year? D)why is the average income lower in Africa than in Latin America? E)What is the impact on the quantity of Pepsi purchased if consumers taste change in favor of non-carbonated drinks?

answer

E) What is the impact on the quantity of Pepsi purchased if consumers taste change in favor of non-carbonated drinks?

question

Your economics professor offers 10 points extra credit if you attend a review session before your next exam. This extra credit is an example of A) a sunk cost B)an incentive to attend the review session. C)a decrease in marginal benefit to attend the review session. D)an increase in marginal cost to attend the review session. E) a rational coice

answer

B)an incentive to attend the review session.

question

In order to determine whether to major in economics, a rational individual compares the ____ of the decision A) self- interest and social-interest B)positive benefits and normative costs C)normative benefits and positive costs D)opportunity cost and the sunk cost E) marginal benefit and marginal cost

answer

E) marginal benefit and marginal cost

question

The cost of a one-unit increase in an activity is called the A) margin B)marginal cost C)opportunity benefit D)marginal benefit E) sunk cost

answer

B)marginal cost

question

The decision to go to graduate school is a rational one for a college student if the A) opportunity cost of graduate school equals zero B)marginal benefit of graduate school exceeds the marginal cost C)student carefully compared the benefits of this decision to the sunk cost of the decision. D) marginal cost exceeds the marginal benefit of graduate school E) cost is not to great

answer

B)marginal benefit of graduate school exceeds the marginal cost

question

Which of the following is a positive statement? A) the school needs more parking for students. B) University bookstore prices are to high. C) an increase in college tuition is not fair to students. D)a recession leads to higher enrollments at universities E)parking tickets on campus impose an excessive fee

answer

D)a recession leads to higher enrollments at universities

question

The income earned by entrepreneurs is A) a mixture of rent,wages,interest, and profit B)interest C)rent,wages, and interest D) profit or loss E)wages

answer

D) profit or loss

question

Items that are purchased by individuals for their own enjoyment are called A) capital goods B)government goods and services C)exports of goods and services D)Consumption goods and services. E) private goods

answer

D)Consumption goods and services.

question

The difference between consumption and capital goods is that A)capital goods are provided by the government B)capital goods are used to produce additional goods while consumption goods are not C)consumption goods be enjoyed by many people at the same time D)only big corporations can afford capital goods E) it is illegal to export capital goods

answer

B)capital goods are used to produce additional goods while consumption goods are not

question

which of the following statements is true? A) income inequality within most countries has increased during the past 20 years B)income inequality across the entire world had decreased during the past 20 years C)income inequality within most countries and across the entire world has not changed much during the past 20 years. D) Both A and B are correct E) None of the above is correct

answer

D) Both A and B are correct

question

In the United States, the productive factor that, as a group, receives the largest fraction of the nations total income was A) Capital B)labor C)land D)Consumption goods and services E)entrepreneurship.

answer

B) Land

question

Compared to the developing economies, the advanced economies have___ human capital and _____ physical capital A)The same; the same B) more; more C)less;more D)more; less E)less;less

answer

B) more;more

question

Items bought by businesses to help produce other goods and services are called A)consumption goods and services. B)government goods and services C)productive goods. D)exports of goods and services. E)capital goods

answer

E)capital goods

question

Entrepreneurship, as a factor of production, refers to A) the capital the firm uses B)the technology used by firms C)the value of the firms stock D)the human resources that organized labor,land, and capital E)the human capital accumulated by workers.

answer

D)the human resources that organized labor,land, and capital

question

Which of the following groups of countries are all advanced economies? A)Hong Kong, Japan, France, and the United Kingdom B)Italy,the untied states,china, and Russia C)Australia, Brazil, and the untied states D)mexico,Canada,Germany,and egypt E)Singapore,Russia,France, and chad

answer

A)Hong Kong, Japan, France, and the United Kingdom

question

Human capital can be increased trough A)decrease in population B)investment in new technology C)increasing the nations production of consumption goods D)investment in new machinery E)educations, on-the-job training, and work experience

answer

E)educations, on-the-job training, and work experience

question

Goods produced in the Untied States and sold in other countries are called A)exports B)imports C)foreign goods D)capital account goods E)capital goods

answer

A)exports

question

what would be an example of government good? A)rhianna gets a haircut B)Donald trump purchases furniture for his office C)Jake buys and iPhone D)the local driver license office purchases a new digital camera and printer E)Antonio, the manager of the local taco hut, purchases a new deep fryer.

answer

D)the local driver license office purchases a new digital camera and printer

question

Approximately_____ people live in the United States and____ people live in the world A)310 million; 3 billion B)210 million; 5 Billion C)310 million; 7 Billion D)210 million; 6 Billion E)410 million; 8billion

answer

C)310 million; 7 Billion

question

As a factor of production, oil reserves are counted as A) land B)labor C)entrepreneurship D)capital E)financial CApital

answer

A) land

question

The largest share of total production in the United States is A) exported goods and services B)capital goods C) imported goods and services D)government goods and services E)consumption goods and services

answer

E)consumption goods and services

question

When a production possibilities frontier is bowed outward, as more of one good is produced, its opportunity cost A) increase B)decreases C)remains constant D)cannot be predicted

answer

A)increase

question

The production possibilities frontier is the boundary between the A) goods and services that the economy can produce. B)attainable and unattainable combinations of goods and services C)affordable and unaffordable combinations of production D)rational and irrational choices facing a society

answer

B)attainable and unattainable combinations of goods and services

question

The negative slope of the production possibilities frontier represents the idea A)that prices as less is produced B)that free lunches are possible C) of inefficient production D)of trade offs, that in order to produce more of one good, the nation must produce less of another

answer

D)of trade offs, that in order to produce more of one good, the nation must produce less of another

question

If the production possibilities frontier between two goods is a straight line, then the A)opportunity cost is not ratio B)resources are equally cost is not a ratio C)line does not qualify as a production possibilities frontier because the unattainable production points are to close to the inefficient production points

answer

B)resources are equally cost is not a ratio

question

Having a comparative advantage means a nation can A)produce more of the good B) produce at a point beyond its pff C)produce without incurring an opportunity cost D)benefit from trade.

answer

D)benefit from trade.

question

If Wendy can produce more of all goods than Tommy in an hour, then A) only Tommy but not Wendy can benefit from trade between the two of them B) Wendy does not need to trade with Tommy in order to achieve the gains from trade C)Wendy has an absolute advantage in all goods D)Tommy has an absolute advantage in all goods

answer

C)Wendy has an absolute advantage in all goods

question

Production efficiency is represented by____ a production possibilities frontier A) all points inside B)a movement along C)only one point on D) all points on

answer

D) all points on

question

Moving from one point to another on a production possibilities frontier implies A)increasing the production of one good and decreasing the production of another B)holding the production levels of both goods constant C)decreasing the production of both goods D) changing the amount of factors of production that are employed

answer

A)increasing the production of one good and decreasing the production of another

question

The production possibilities frontier illustrates the A)limits to peoples wants B)maximum combinations of goods and services that can be produced C)resources the economy posses, but not its level of technology D) amount of each good that people want to buy

answer

B)maximum combinations of goods and services that can be produced

question

A country has a comparative advantage in the production of a good if it can A) trade off producing the good for another good B)produce more of the good than another country. C)produce the good at the lowest opportunity cost D)produce the good on and remain on its production possibilities frontier

answer

C)produce the good at the lowest opportunity cost

question

What is gained when people engage in specialization and trade? A)specialization and trade allow people to consume outside their individual production possibilities frontiers B)specialization and trade allow people to consume at a point on their production possibility frontiers C)specialization and trade allow people to produce outside their individual production possibilities frontiers D)there are no gains from specialization and trade

answer

A)specialization and trade allow people to consume outside their individual production possibilities frontiers

question

The United States produced approximately____worth of goods and services in 2011 A)150 trillion B)150 Billion C) 15 billion D)15trillion E)1,500 trillion

answer

D)15 trillion

question

The downward slope of a demand curve A)indicates how demand changes when the prices changes and the good is a normal good B)indicates how quantity demanded changes when incomes rise and the good is a normal good C)shows that as the price of a good rises, consumers increase the quantity they demand D)represents the law of demand

answer

D)represents the law of demand

question

if the demand for used cars decreases after the price of a new car falls, used cars and new cars are A) substitute goods B)inferior goods C)complementary goods D)normal goods

answer

A) substitute goods

question

A market is defined as A) a physical place where people buy only goods B)any arrangement that brings buyers and sellers together C)a store where people buy physical goods D)a place where one good is bartered for another

answer

B)any arrangement that brings buyers and sellers together

question

Mulch is shredded wood and is a by-product in the production of lumber. Because these two goods are produced together, they are A)Substitutes in production B)normal goods in production C)complements in production D)inputs into the same production process

answer

C)complements in production

question

Car insurance and cars are complements. If the price of car insurance increases, the A)quantity of cars demanded decrease B)quantity of cars demanded increases C)demand for cars increases D)Demand for cars decreases

answer

D)Demand for cars decreases

question

If the demand for a good increases when peoples income increase, A) the food is a normal good B) the good demand curve must be slope upward C)the good is an inferior good D) the good is a substitute good for an inferior good

answer

A) the food is a normal good

question

Market equilibrium occurs when A)the quantity demanded equals the quantity supplied B)opposing forces pull demand and supply apart C)demand and supply change so that are equal at all possible prices D)demand and supply move in oppose direction

answer

A)the quantity demanded equals the quantity supplied

question

Which of the following helps explain why the law of supply exists A) larger outputs results in lower costs of production B) the law of increasing opportunity cost C) the law of demand D) seller realize that if the price increase, they make larger profits and do not need to change their production.

answer

B) the law of increasing opportunity cost

question

A freeze destroys oranges before they are harvested, the equilibrium price of an orange___ and the equilibrium quantity____ A)falls;increases B) rises;decreases C)falls;decreases D)rises;increase

answer

B) rises;decreases

question

the phrase "a change in demand" most directly implies a A)movement along a demand curve B)shift of the demand curve C)movement along the price curve D)movement along the quantity curve

answer

B)shift of the demand curve

question

A technological improvement lowers the cost of producing corn. As a result, the price of a pound of corn____ and the quantity of corn____ A) falls;does not change B)rises;increases C)falls;Decreases D)rises;deceases E)falls;increase

answer

E)falls;increase

question

The law of demand asserts that all else equal, if the price of a good____ the quantity demanded of that good____ A)rises;stays the same B)falls;increases C)stays the same;decreases D)falls;decrease

answer

B)falls;increases

question

An increase in the quantity demanded is shown as a A)leftward shift of the demand curve B)movement along the demand curve C)movement toward the demand curve D)rightward shift of the demand curve

answer

B)movement along the demand curve

question

The number of people looking to buy ceiling fan buyers increases, so there is an increase in the A)demand of ceiling fans and a rise in the price of a ceiling fan. B)demand for ceiling fans and a surplus of ceiling fans. C)demand of ceiling fans and in the supply of ceiling fans D)quaintly of ceiling fans demands and a surplus of ceiling fans

answer

A)demand of ceiling fans and a rise in the price of a ceiling fan.

question

When calculating GDP, purchases of used goods are A)included at the original price. B)not included C)included at the original prices minus any depreciation D)included by taking the original price and subtracting the current used price

answer

B)not included

question

Total expenditure equals total income A)because firms pay out everything they receive as income to the factors of production B)only it firms sell all the goods they produce in a given time period C)if firms earn zero profit D) if firms do not save for the future investments

answer

A)because firms pay out everything they receive as income to the factors of production

question

A recession conventionally is defined as a decrease in A)real GDP that lasts for at least six months B) the inflation rate that lasts for a least six months C)potential GDP that lasts for at least six months D) the growth rate for real GDP that lasts for a least six months

answer

A)real GDP that lasts for at least six months

question

Real GDP measures the value of goods and services produced in a given year valued using A)future prices B)no prices C)real rater than normal prices D) base year prices

answer

D) base year prices

question

Although imperfect, which of the following is used as a measure of the standard of living? A) real GDP / person B) nominal GDP * population C)nominal GNP / person D)nominal GNP * population

answer

A) real GDP / person

question

Goods and services such as environmental quality, leisure time, and household production are not included in GDP because they are not A) really durable goods B)made for profit C)for consumption D)bought in markets

answer

D)bought in markets

question

Nominal GDP measures the value of goods and services produced in a given year valued using A)prices of the same year B)constant prices C)future prices D)no prices

answer

A)prices of the same year

question

if you make dinner for yourself A)none of what you bought to prepare for dinner in included in GDP B)only the market value of ingredients that you purchased this year is added to GDP C)your service in preparing the meal is valued at a cooks wage and added to GDP D)the market value of your dinner is added to GDP

answer

B)only the market value of ingredients that you purchased this year is added to GDP

question

The relationship between real GDP and potential GDP over the business cycle can be best summarized by which of the following A)real GDP fluctuates around potential GDP B)real GDP cannot be qual to potential GDP C)real GDp is always qual to potential GDP D)Real GDP canot be less than potenial GDP

answer

A)real GDP fluctuates around potential GDP

question

Last year in Candamica, consumption expenditure was $20 billion, interest, rent, and profit were $2.5 billion, government expenditure on goods and services was $7 billion, net exports of goods and services was $5 billion, and investment was $2 billion. Hence total expenditure was A)34.4 billion B)36.5 billlion C)24.5 billion D)34 billion

answer

D)34 billion

question

The income approach to measuring GDP is based on summing A)consumption expenditure, investments, government expenditures on goods and services, and net exports of goods and services B)wages, interest, rent, and profits C)the production of each industry D)consumption expenditure and wages

answer

B)wages, interest, rent, and profits

question

Consumption expenditure includes spending A) by households B)on office supplies by firms C)on intermediate goods and services by firms D)by households and spending on office supplies by firms

answer

A) by households

question

Gross Domestic Product is equal to the market value of all the final goods and services_____in a given period of time A)consumed within a country B)produced within a country C) produced and consumed within a country D)produced by the citizens of a country

answer

B)produced within a country

question

Which of the following is a final good or service A)the cpus purchased by dell to be used in their computers B) a new replacement muffler installed by Midas Mufflers C)the computers purchased by office Depot for sale to its customers D) the frilled chicken purchased by taco bell for use in their burritos

answer

B) a new replacement muffler installed by Midas Mufflers

question

U.s net exports include A)the sale of shares of Nike stock on the new York stock exchange B)the sale of U.S government securities to U.S citizens C)sales of Hollywood movies to the rest of the world D)the production of ford mustangs in china that are sold in china

answer

C)sales of Hollywood movies to the rest of the world

question

At full employment there is no A) frictional unemployment B)cyclical unemployment C)seasonal unemployment D)structural unemployment

answer

B)cyclical unemployment

question

Discouraged workers A) would increase unemployment rate if they were added to the number of unemployed workers B)are not included in the calculation of the unemployment rate, the labor force, or the working-age population C)would decrease unemployment rate if they were added to the number of unemployed workers D)are counted as one-half of a worker in the unemployment statistics

answer

A) would increase unemployment rate if they were added to the number of unemployed workers

question

the unemployment rate is the A) percentage of the labor force that does not have job B)percentage of the working- age population that does not have a job C) percentage of the population that does not have a job D)percentage of the population that does not have a job

answer

A) percentage of the labor force that does not have job

question

Potential GDP is the level of output produced when the unemployment rate is A)made up only cyclical unemployment B)zero C)less than the natural unemployment rate D)equal to the natural unemployment rate

answer

D)equal to the natural unemployment rate

question

In part, the increase in the labor force participation rate in the United States over the last 50 years can be attributed to A)recessionary periods followed by longer expansionary periods B)the large in the mans labor force participation rate overcoming the large decrease in the women labor force participation rate C)technological change in the home increasing the time available for paid employment D)unsuccesful job seekers becoming discouraged workers

answer

C)technological change in the home increasing the time available for paid employment

question

the labor force is the A) number of employed people in the working-age population B)total population divide by the number of employed people C)number of employed people minus the number of unemployed people D)number of employed people plus the number of unemployed poeple

answer

D)number of employed people plus the number of unemployed poeple

question

the average U.S unemployment rate from 1948 has been about A) 2.7 percent B)15.7 percent C)10.7 percent D)5.8 percent

answer

D)5.8 percent

question

the natural unemployment rate is A) equal to the sum of frictional, cyclical and seasonal unemployment B)not known with certainty C) equal to the sum of frictional, structural, and and seasonal unemployment D) equal to zero

answer

B)not known with certainty

question

The highest unemployment rate is the U.S history was about A) 10 percent 1982 B)5.9 percent 1972 C)52 percent in 1938 D)25 percent in 1933

answer

D)25 percent in 1933

question

Frictional unemployment is the result of A) people not getting along(having Friction) with their employers B) the normal process of jobs being created and destroyed C) changing weather throughout year D)the enocomic decline of major industries

answer

B) the normal process of jobs being created and destroyed

question

To be counted as employed by the BLS, in the week before the survey the person must have worked for pay____ A) more than 200 hours B) 40 hours C) at least 1 hour D) at least 5 hours

answer

C) at least 1 hour

question

structural unemployment is the results of A)irresponsible workers with poor work habits B)changing weather patterns through the year C)technological change or foreign competition D)a slow down in the rate of enocomic expansion

answer

C)technological change or foreign competition

question

The labor force participation rate is equal to A) ( number of employed workers / working-age population) * 100 B) (number of employed wokers / population) * 100 C) ( number of employed workers / labor force) * 100 D) (labor force/working-age population) x 100

answer

D) (labor force/working-age population) x 100

question

During a recession, cyclical unemployment____ and real GDP_____ A) decreases;decreases B)decreases ;increases C)increases;increases D)increase;decreases

answer

D)increase;decreases

question

the natural unemployment rate occurs A) at the full employment level of unemployment B) when the unemployment rate equals zero C)when the seasonal unemployment rate equals zero D)when the structural unemployment rate equals zero.

answer

A) at the full employment level of unemployment

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