Econ 2302 - Exam I.txt

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Econ 2302 - Exam I.txt
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Econ 2302 Exam 1
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    • author "Rosenauer"
    • tags "Microeconomics Econ2302 Exam 1"
    • folders "Microeconomics"
    • description ""
    • fileName "Econ 2302 - Exam I"
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    • Economics may be best defined as:
    • a) The interaction between macro and micro considerations.
    • b) The study of how society chooses to allocate its scarce resources to the production of goods and services in order to satisfy unlimited wants.
    • c) The empirical testing of value judgments through the use of logic.
    • d) The use of policy to refute facts and hypotheses.
    • b) The study of how society chooses to allocate its scarce resources to the production of goods and services in order to satisfy unlimited wants.
  1. Opportunity cost may be defined as the:
    A) The monetary price of any productive resource.
    B) The ratio of the prices of imported goods to the prices of exported goods.
    C) The amount of one product that must be given up to produce one more unit of another product.
    D) The amount of labor that must be used to produce one unit of any product.
    C) The amount of one product that must be given up to produce one more unit of another product.
    (this multiple choice question has been scrambled)
  2. A production possibilities curve shows:
    A) That resources are unlimited.
    B) That people prefer one of the goods more than the other.
    C) The maximum amounts of two good that can be produced assuming the full and efficient use of available resources.
    D) Combination of capital and labor necessary to produce specific levels of output.
    C) The maximum amounts of two good that can be produced assuming the full and efficient use of available resources.
    (this multiple choice question has been scrambled)
  3. The law of increasing opportunity costs exists because:
    A) Consumers tend to value any good more highly when they have little of it.
    B) Wage rates invariably rise as the economy approaches full employment.
    C) The value of the dollar has diminished historically because of persistent inflation.
    D) Resources are not perfectly adaptability or substitable in producing different goods.
    D) Resources are not perfectly adaptability or substitable in producing different goods.
    (this multiple choice question has been scrambled)
  4. Which of the following will not produce an outward shift of the production possibilites curve?
    A) An upgrading of the quality of a nation's human resources.
    B) The reduction of unemployment.
    C) An increase in the quantity of a society's labor force.
    D) The improvement of a society's technological knowledge.
    B) The reduction of unemployment.
    (this multiple choice question has been scrambled)
  5. The price system can best be defined as:
    A) The process by which the production-possibilities curve shifts inward.
    B) Price regulation by government.
    C) The use of market signals and government directives to select economics outcomes.
    D) A mechanism that uses the forces of supply and demand to create desired output through rising and falling prices.
    D) A mechanism that uses the forces of supply and demand to create desired output through rising and falling prices.
    (this multiple choice question has been scrambled)
  6. The two kinds of markets found in the circular flow model are:
    A) real and traditional markets.
    B) product and resource (factor) markets.
    C) real and money markets.
    D) money and authoritarian markets.
    B) product and resource (factor) markets.
    (this multiple choice question has been scrambled)
  7. A normative statement is one which is:
    A) Subjective and based on a value judgment.
    B) Derived by induction.
    C) Derived by deduction.
    D) Objective and based on fact.
    A) Subjective and based on a value judgment.
    (this multiple choice question has been scrambled)
  8. Adam Smith wrote:
    A) Das Kapital, which described the virtues of market-based economies.
    B) Das Kapital, which provided the rationale for centally planned economies.
    C) The Wealth of Nations, which provided the rationale for centrally planned economies.
    D) The Wealth of Nations, which described the virtues of market-based economies.
    D) The Wealth of Nations, which described the virtues of market-based economies.
    (this multiple choice question has been scrambled)
  9. Which of the following are our nation's major economic goals?
    A) Economic growth.
    B) Price level stability.
    C) Full-employment.
    D) All of the above.
    D) All of the above.
  10. Microeconomics approaches the study of economics from the view point of:
    A) Economy wide effects.
    B) Individual specific markets.
    C) The operation of the Federal Reserve.
    D) The national economy.
    B) Individual specific markets.
    (this multiple choice question has been scrambled)
  11. According to the law of demand, the quantity of a good demanded in a given time period:
    A) Increases as its price rises, ceteris paribus.
    B) Decreases as its price rises, ceteris paribus.
    C) Does not chage when price chages.
    D) Decreases as its price falls, ceteris paribus.
    B) Decreases as its price rises, ceteris paribus.
    (this multiple choice question has been scrambled)
  12. A change in demand means there has been a shift in the demand curve, and a change in the quantity demanded:
    A) Also means demand has shifted.
    B) Results from a change in price of other goods.
    C) Corresponds to a movement along the demand curve.
    D) means a shortage or surplus will result from holding prices constant.
    C) Corresponds to a movement along the demand curve.
    (this multiple choice question has been scrambled)
  13. A decrease in the price of one good can cause an increase in the demand for another good if the goods are:
    A) Both inferior.
    B) unrelated to each other.
    C) Complements.
    D) Substitues.
    C) Complements.
    (this multiple choice question has been scrambled)
  14. A market is said to be in equilibrium when:
    A) Demand is fully satisfied at all alternative prices.
    B) The supply intentions of all sellers are realized.
    C) The quantity demanded equals the quantity supplied.
    D) The buying intentions of all consumers are relaized.
    C) The quantity demanded equals the quantity supplied.
    (this multiple choice question has been scrambled)
  15. A rightward shift in a demand curve and a rightward shift in a supply curve both result in a:
    A) Lower equilibrium quantity.
    B) Higher equilibrium price.
    C) Lower equilibrium price.
    D) Higher equilibrium quantity.
    D) Higher equilibrium quantity.
    (this multiple choice question has been scrambled)
  16. A rightward shift in a demand curve and a leftward shift in a supply curve both result in a:
    A) Higher equilibrium quantity.
    B) Lower equilibrium price.
    C) Higher equilibrium price.
    D) Lower equilibrium quantity.
    C) Higher equilibrium price.
    (this multiple choice question has been scrambled)
  17. A leftward shift of the market demand curve, ceteris paribus, causes equilibrium:
    A) Price to increase and quantity to increase.
    B) Price to increase and quantity to decrease.
    C) Price to decrease and quantity to increase.
    D) Price to decrease and quantity to decrease.
    D) Price to decrease and quantity to decrease.
    (this multiple choice question has been scrambled)
  18. A rightward shift of the market supply curve, ceteris paribus, causes equilibrium:
    A) Price to increase and quantity to decrease.
    B) Price to decrease and quantity to decrease.
    C) Price to increase and quantity to increase.
    D) Price to decrease and quantity to increase.
    D) Price to decrease and quantity to increase.
    (this multiple choice question has been scrambled)
  19. A surplus of a product will arise when prise is:
    A) Above equilibrium with the result that quantity demaded exceeds quantity supplies.
    B) Above equilibrium with the result that quantity supplied exceeds quantity demanded.
    C) Below equilibrium with the result that quantity demanded exceeds quantity supplied.
    D) Below equilibrium with the result that quantity supplied exceeds quantity demanded.
    B) Above equilibrium with the result that quantity supplied exceeds quantity demanded.
  20. Which of the following could cause an increase in consumer demand for product X?
    A) A decrease in the number of sellers of product X.
    B) A decrease in consumer income.
    C) A decrease in the price which consumers expect will prevail for product X in the future.
    D) An increase in the prices of goods which are substitues for product X.
    D) An increase in the prices of goods which are substitues for product X.
    (this multiple choice question has been scrambled)
  21. When the production or consumption of a good involves and externality:
    A) Resources are necessarily under allocated to the product.
    B) The market will efficiently allocate resources to its prodution.
    C) Someone not involved in buying or selling the good is affected.
    D) Resources are necessarily over allocated to the product.
    C) Someone not involved in buying or selling the good is affected.
    (this multiple choice question has been scrambled)
  22. A price floor is:
    A) Determined by the interaction supply and demand.
    B) A binding constraint on the market if set below the equilibrium price.
    C) A legally estabilished minimum price a seller can be paid.
    D) A legally established maximum price a seller can charge.
    C) A legally estabilished minimum price a seller can be paid.
    (this multiple choice question has been scrambled)
  23. Which of the following would not be classified as a capital resource?
    A) A Caterpillar bulldozer.
    B) A Macintosh Computer.
    C) 100 shares of General Motors.
    D) The Empire State Building
    C) 100 shares of General Motors.
    (this multiple choice question has been scrambled)
  24. Price Ceilings:
    A) create surpluses.
    B) Have no effect on the equilibrium quantity.
    C) Are established by the market mechanism.
    D) create shortages.
    D) create shortages.
    (this multiple choice question has been scrambled)
  25. In a market economy the distribution of income would be determined primarily by:
    A) social consensus as to what distribution of income is most equitable.
    B) the quantities and quanlities of the resources which household supply.
    C) government regulations which provide a minimum income for all.
    D) consumer needs and preferences.
    B) the quantities and quanlities of the resources which household supply.
    (this multiple choice question has been scrambled)
  26. One reason why the quantity of a good demanded increases when its price falls is that the:
    A) lower price shifts the demand curve to the right.
    B) lower price increases the real income of buyers, enabling them to buy more.
    C) price decline shifts the supply curve to the left.
    D) lower price shifts the demand curve to the left.
    B) lower price increases the real income of buyers, enabling them to buy more.
    (this multiple choice question has been scrambled)
  27. Models:
    A) Are used to understand and perdict economic events.
    B) Can be stated verbally, or in a table or graph or equation.
    C) Are simplified description of reality.
    D) All of the above.
    D) All of the above.
  28. The problems of aggregate inflation and unemployment are:
    A) not relevant to the U.S. economy.
    B) major topics of macroeconomics.
    C) major topics of microeconomics.
    D) peculiar to socialistic economies.
    B) major topics of macroeconomics.
    (this multiple choice question has been scrambled)
  29. A leftward shift of the market supply curve, ceteris paribus, causes equilibrium:
    A) Price to decrease and quantity to decrease.
    B) Price to decrease and quantity to increase.
    C) Price to decrease and quantity to increase.
    D) Price to increase and quantity to decrease.
    D) Price to increase and quantity to decrease.
    (this multiple choice question has been scrambled)
  30. Which of the following can change without shifting either demand or supply, ceteris paribus?
    A) Incomes.
    B) The price of the good itself.
    C) The prices of other goods.
    D) All of the above.
    B) The price of the good itself.
    (this multiple choice question has been scrambled)
  31. Which factor will decrease the demand for the product?
    A) An increase in the price of a substitute good.
    B) A decrease in the price of a complimentary good.
    C) A favorable change in consumer taste.
    D) A decrease in the number of buyers.
    D) A decrease in the number of buyers.
    (this multiple choice question has been scrambled)
  32. An increase in the supply of a product would most likely be caused by:
    A) A decrease in business taxes.
    B) An increase in consumer income.
    C) An increase in resource costs for production.
    D) A decrease in the price of a complimentary good.
    A) A decrease in business taxes.
    (this multiple choice question has been scrambled)
  33. The demand for a product might shift as the result of a change in:
    A) Consumer tates.
    B) The price of related goods.
    C) Consumer incomes.
    D) All of the above.
    D) All of the above.
  34. Which of the following is a determinant of supply?
    A) Tastes.
    B) The number of buyers.
    C) Price.
    D) Taxes and subsidies.
    D) Taxes and subsidies.
    (this multiple choice question has been scrambled)
  35. Graphically, the market demand curve is:
    A) The vertical sum of individual demand curves.
    B) Steeper than any individual demand curves comprising it.
    C) Greater than the sum of the individual demand curves.
    D) The horizontal sum of individual demand curves.
    D) The horizontal sum of individual demand curves.
    (this multiple choice question has been scrambled)
  36. The law of supply states that the quantity of a good supplied, ceteris paribus, increases:
    A) As its price increases.
    B) As its price falls.
    C) As demand decreases.
    D) Does not change when price changes.
    A) As its price increases.
    (this multiple choice question has been scrambled)
  37. The location of the supply curve of a product depends on:
    A) The technology used to produce it.
    B) The prices of resources used in its production.
    C) The number of sellers in the market.
    D) All of the above.
    D) All of the above.
  38. A normal good is defined as one:
    A) The consumption of which varies directly with incomes.
    B) Whose amount demanded will increase as its price increases.
    C) Whose demand curve will shift leftward as income rise.
    D) Whose amount demanded will decrease as its price decreases.
    A) The consumption of which varies directly with incomes.
    (this multiple choice question has been scrambled)
  39. "Spillovers" or "externalities" weaken the efficiency of the market system because they:
    A) are a major sorce of inflation.
    B) Cause certain goods to be over produced or under produced.
    C) Are a major source of employment.
    D) Mean that certain essential goods and services do not get produced at all.
    B) Cause certain goods to be over produced or under produced.
    (this multiple choice question has been scrambled)
  40. Refer to the below diagram. A price of $60 in this market will result in:
    A) A surplus of 50 units.
    B) A surplus of 100 units.
    C) A shortage of 100 units.
    D) Equilibrium.
    B) A surplus of 100 units.
    (this multiple choice question has been scrambled)
  41. When economists describe a "market," they mean:
    A) a place where stocks and bonds are traded.
    B) Information networks that allow individuals to keep in touch with each other.
    C) A mechanism which coordinates acctions of consumers and producers to establish equilibrium prices and quantities.
    D) A hypothetical place where the production of goods and services take place.
    C) A mechanism which coordinates acctions of consumers and producers to establish equilibrium prices and quantities.
    (this multiple choice question has been scrambled)
  42. Refer to the below diagram, which shows demand and supply conditions in the competitive market for product X. Given D0, if the supply curve moved from S0 to S1, then:
    A) There has been an increase in the quantity supplied.
    B) Supply has increased and price has risen to 0G.
    C) Supply has increased and equilibrium quantity has decreased.
    D) Supply has decreased and equilibrium quantity has decreased.
    D) Supply has decreased and equilibrium quantity has decreased.
    (this multiple choice question has been scrambled)
  43. Refer to the below diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves. In this market:
    A) An increase in demand has been more than offset by an increase in supply.
    B) Point M shows the new equilibrium position.
    C) The new equilibrium price and quantity are both greater than originally.
    D) The equilibrium position has shifted from M to K.
    A) An increase in demand has been more than offset by an increase in supply.
    (this multiple choice question has been scrambled)
  44. Education and training that improve the skill of the of th labor force are represented on the production possibilities curve by a (an):
    A) Outward shift of the curve.
    B) Movement toward the curve from an exterior point.
    C) Movement along the curve.
    D) Inward shift of the curve.
    A) Outward shift of the curve.
    (this multiple choice question has been scrambled)
  45. An increase in consumer income, other things being equal, will:
    A) Shift the supply curve for a normal good to the right.
    B) Cause a downward movement along the supply curve for a normal good.
    C) Shift the demand curve for an inferior good the left.
    D) Cause an upward movement along the demand curve for an inferior good.
    C) Shift the demand curve for an inferior good the left.
    (this multiple choice question has been scrambled)
  46. Which of the following is the result of a decrease in the price of tea, other things being equal?
    A) A rightward shift in the demand curve for tea.
    B) A downward movement along the demand curve for tea.
    C) A leftward shift in the demand curve for tea.
    D) An upward movement along the demand curve for tea.
    B) A downward movement along the demand curve for tea.
    (this multiple choice question has been scrambled)
  47. Pollution from cars in an example of:
    A) A harmful opportunity cost.
    B) A productive dislocation.
    C) A negative externailty.
    D) None of the above.
    C) A negative externailty.
    (this multiple choice question has been scrambled)
  48. An increase in the wage paid to grape pickers will cause the:
    A) Supply curve for grapes to shift to the left, resulting in higher prices for grapes.
    B) Demand curve for grapes to shift to the left, resulting in lower prices for grapes.
    C) Demand curve for grapes to shift to the right, resulting in hight prices for grapes.
    D) Supply curve for grapes to shift to the left, resulting in lower prices for grapes.
    A) Supply curve for grapes to shift to the left, resulting in higher prices for grapes.
    (this multiple choice question has been scrambled)
  49. A good that provides external benefits to society has:
    A) Too few resources devoted to its production.
    B) The optimal rewources devoted to its production.
    C) Too many resources devoted to its production.
    D) Not provided profits to producers of the good.
    A) Too few resources devoted to its production.
    (this multiple choice question has been scrambled)

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