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sonvplex
Apr 8th, 2013
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  1. 1. Question :
  2. Marginal analysis suggests that you will choose to do something if:
  3.  
  4. Student Answer: the marginal benefit exceeds the marginal cost.
  5.  
  6.  
  7. 2. Question :
  8. Under Soviet-style socialism:
  9.  
  10. Student Answer: government planning boards set goals and then give individuals directives as to how to achieve those goals.
  11.  
  12.  
  13. 3. Question :
  14. When people heard that there was a shortage of Beanie Babies, they wanted even more of them. Because of this effect the pressure on the price of these Beanie Babies increased. The price of the Beanie Babies remained the same however. The fact that the price remained unchanged:
  15.  
  16. Student Answer: widened the shortage.
  17.  
  18.  
  19. 4. Question :
  20. A budget deficit that would not exist if the economy were at potential income is called:
  21.  
  22. Student Answer: a passive deficit.
  23.  
  24.  
  25. 5. Question :
  26. Which of the following topics would you most likely encounter in a macroeconomics course?
  27.  
  28. Student Answer: The effect that a change in the money supply has on interest rates.
  29.  
  30.  
  31. 6. Question :
  32. The invisible hand is:
  33.  
  34. Student Answer: affected by both political and social forces.
  35.  
  36.  
  37. 7. Question :
  38. The marginal benefit from consuming another unit of a good:
  39.  
  40. Student Answer: is the additional benefit above what you have already derived.
  41.  
  42.  
  43. 8. Question :
  44. An improvement in technology will:
  45.  
  46. Student Answer: shift the production possibilities curve outward.
  47.  
  48.  
  49. 9. Question :
  50. Governments establish the laws that regulate the interaction between businesses and households and also serve as actors in the economy themselves.
  51.  
  52. Student Answer: True
  53.  
  54. 10. Question :
  55. Which price ceiling will cause the greatest excess demand?
  56.  
  57.  
  58.  
  59. Student Answer: $1
  60.  
  61.  
  62. 11. Question :
  63. As the price of good X rises, the demand for good Y falls. Therefore, goods X and Y are:
  64.  
  65. Student Answer: complements.
  66.  
  67.  
  68. 12. Question :
  69. Suppose that the table below shows the demand and supply schedules for pork bellies. Based on the table, the equilibrium price of pork bellies is:
  70.  
  71.  
  72.  
  73.  
  74. Student Answer: $0.50/lb.
  75.  
  76.  
  77. 13. Question :
  78. The marginal benefit of owning another hardback book this month to Shelby is $20. If the $22 price of hardback books reflects their marginal cost to Shelby and she is rational, then:
  79.  
  80. Student Answer: Shelby will not buy any more hardback books this month.
  81.  
  82.  
  83. 14. Question :
  84. Through war, many of the factories in country 1 are destroyed, and many of its people are killed. As a result, the country's:
  85.  
  86. Student Answer: PPC after the war is probably closer to the origin than its PPC before the war.
  87.  
  88.  
  89. 15. Question :
  90. An upward sloping supply curve implies that:
  91.  
  92. Student Answer: producers will offer more of an item for sale when its price rises.
  93.  
  94. 16. Question :
  95. A tax that is levied on a specific good is called:
  96.  
  97. Student Answer: an excise tax.
  98.  
  99.  
  100. 17. Question :
  101. Refer to the graph below. A government-imposed price floor of $2 will result in:
  102.  
  103.  
  104.  
  105. Student Answer: neither excess supply nor excess demand since it is not binding.
  106.  
  107.  
  108. 18. Question :
  109. Global corporations:
  110.  
  111. Student Answer: have substantial operations both production and sales sides in more than one country.
  112.  
  113.  
  114. 19. Question :
  115. Productive efficiency implies:
  116.  
  117. Student Answer: the impossibility of gains in one area without losses in another.
  118.  
  119.  
  120. 20. Question :
  121. A government can finance its budget deficit by doing all of the following except:
  122.  
  123. Student Answer: buying bonds.
  124.  
  125.  
  126. 21. Question :
  127. Over the last few years, oil prices have been rising dramatically, thereby increasing the costs of transportation. Oil is an input in transportation, and shipping services (like UPS or FedEx) are in the business of transportation. What happens to the supply of shipping services given higher oil prices?
  128.  
  129. Student Answer: A decrease in the supply of shipping services
  130.  
  131. 22. Question :
  132. What form of business is the most common in the United States?
  133.  
  134. Student Answer: Sole proprietorships.
  135.  
  136.  
  137. 23. Question :
  138. Assume the graph below reflects demand in the automobile market. Which arrow best captures the impact of increased consumer income on the automobile market?
  139.  
  140.  
  141.  
  142. Student Answer:
  143. D
  144.  
  145.  
  146. 24. Question :
  147. In late 2003, news reports hit the airways stating that scientists had found evidence of BSE, or "Mad Cow Disease", in U.S. cattle. At the same time, many cattle ranchers had to leave the market because their contaminated cattle had to be put to death. What happens to in the market for red meat?
  148.  
  149. Student Answer: Equilibrium price is indeterminate but equilibrium quantity decreases
  150.  
  151.  
  152. 25. Question :
  153. Which of the following would help alleviate the impending Social Security problem?
  154.  
  155. Student Answer: Raising the age at which one is eligible to receive payments
  156.  
  157.  
  158. 26. Question :
  159. The use of the phrase "other things equal" in supply and demand analysis indicates that:
  160.  
  161. Student Answer: factors other than the one under consideration are kept constant.
  162.  
  163.  
  164. 27. Question :
  165. Refer to the graph below. Given the resources and technology available to this economy, it can produce at points:
  166.  
  167.  
  168.  
  169. Student Answer: A, C, and D.
  170.  
  171.  
  172. 28. Question :
  173. A decrease in the quantity of resources:
  174.  
  175. Student Answer: shifts the PPC inward.
  176.  
  177.  
  178. 29. Question :
  179. In a partnership:
  180.  
  181. Student Answer: there are two or more owners, with each owner liable for the actions of the other owners.
  182.  
  183.  
  184. 30. Question :
  185. An entrepreneur might choose to form a partnership rather than a sole proprietorship because a partnership:
  186.  
  187. Student Answer: allows the owners to share the risks of business.
  188.  
  189.  
  190. 31. Question :
  191. The law of demand states that price and:
  192.  
  193. Student Answer: quantity demanded are inversely related, ceteris paribus.
  194.  
  195.  
  196. 32. Question :
  197. At a Phoenix game 150,000 tickets were sold at $45 apiece. The game was sold out and some people did not get tickets. This suggests that:
  198.  
  199. Student Answer: selling price was below equilibrium.
  200.  
  201.  
  202. 33. Question :
  203. The distinction between a change in demand and a change in quantity demanded is best made by saying that:
  204.  
  205. Student Answer: a change in quantity demanded is caused by a change in price, and a change in demand is caused by a change in other factors.
  206.  
  207.  
  208. 34. Question :
  209. Refer to the graph below. Which of the following could be responsible for the shift of the supply curve for snow skis from S1 to S2?
  210.  
  211.  
  212.  
  213. Student Answer: An increase in the price of the fiberglass used in ski production.
  214.  
  215.  
  216. 35. Question :
  217. The opportunity cost of obtaining more of a good is:
  218.  
  219. Student Answer: always greater than zero.
  220.  
  221.  
  222. 36. Question :
  223. Suppose that the table below shows the demand and supply schedules for pork bellies. There is a shortage of 15,000 pounds at a price of:
  224.  
  225.  
  226.  
  227. Student Answer: $0.25.
  228.  
  229.  
  230. 37. Question :
  231. At a price for which quantity demanded exceeds quantity supplied, a __________ is experienced, which pushes the price __________ toward its equilibrium value.
  232.  
  233. Student Answer: shortage; upward
  234.  
  235.  
  236. 38. Question :
  237. Monopoly power is the ability of individuals or firms currently in business to prevent other individuals or firms from entering the same kind of business.
  238.  
  239. Student Answer: True
  240.  
  241. 39. Question :
  242. If countries trade on the basis of comparative advantage:
  243.  
  244. Student Answer: global production and consumption of each good increases.
  245.  
  246.  
  247. 40. Question :
  248. An "increase in the quantity demanded" means that
  249.  
  250. Student Answer: price has declined and consumers therefore want to purchase more of the good.
  251.  
  252.  
  253. 41. Question :
  254. The three central coordination problems of the economy given in the book are:
  255.  
  256. Student Answer: what to produce, how to produce, and for whom to produce.
  257.  
  258.  
  259. 42. Question :
  260. An increase in the quantity of resources:
  261.  
  262. Student Answer: shifts the PPC outward.
  263.  
  264.  
  265. 43. Question :
  266. Market economies are based upon:
  267.  
  268. Student Answer: individual self-interest and private property.
  269.  
  270.  
  271. 44. Question :
  272. The existence of a market surplus implies that price is:
  273.  
  274. Student Answer: above equilibrium and must fall to restore equilibrium.
  275.  
  276.  
  277. 45. Question :
  278. Refer to the graph below. Which arrow shows the effect on the demand for CDs of a decrease in the number of consumers in the market?
  279.  
  280.  
  281.  
  282. Student Answer: D
  283.  
  284.  
  285. 46. Question :
  286. Which of the following questions cannot be answered using a production possibility table?
  287.  
  288. Student Answer: What combination of outputs is best?
  289.  
  290.  
  291. 47. Question :
  292. Refer to the graphs below. A recent report indicates that the device known as the right heart catheter used to diagnose heart conditions poses more risks than previously thought. The effect of the report on the market for right heart catheters is best shown by which of the graphs?
  293.  
  294.  
  295.  
  296. Student Answer: I
  297.  
  298.  
  299. 48. Question :
  300. The greatest impact that the development of markets has had on the acceleration of growth since 1800s is mostly due to:
  301.  
  302. Student Answer: the specialization that markets encourage.
  303.  
  304.  
  305. 49. Question :
  306. According to the law of demand, a decrease in the price of baseball trading cards causes:
  307.  
  308. Student Answer: an increase in the quantity of trading cards demanded.
  309.  
  310.  
  311. 50. Question :
  312. Which of the following is an illustration of the law of increasing opportunity costs?
  313.  
  314. Student Answer: As more cars are produced, the opportunity cost of each additional car is greater than for the preceding unit.
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