Macroeconomics, Practice Exam One 2018

5 July 2024
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In deciding whether to study for an economics quiz or go to a movie, one is confronted by the idea(s) of
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scarcity and opportunity costs.
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Which of the following is an economic explanation for why most college-aged movie stars do not attend college? A. they are too dumb to get into college B. they would find college life boring C. the opportunity cost in terms of reduced income is too great D. they cannot afford the room, board, and tuition fees most colleges charge.
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the opportunity cost in terms of reduced income is too great.
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Which of the following most closely relates to the idea of opportunity costs? A. tradeoffs B. economic growth C. technological change D. capitalism
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tradeoffs.
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Which of the following is associated with macroeconomics? A. an examination of the incomes of Harvard Business School graduates B. an empirical investigation of the general price level and unemployment rates since 1990 C. a study of the trend of pecan prices since the Second World War D. a case study of pricing and production in the textbook industry
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an empirical investigation of the general price level and unemployment rates since 1990.
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Macroeconomics can best be described as the
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Study of the large aggregates of the economy or the economy as a whole.
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When the economist says that economic wants are insatiable, this means that
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these wants are virtually unlimited and therefore incapable of complete satisfaction.
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The scarcity problem
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persists because economic wants exceed available productive resources.
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Which of the following is a labor resource? A. a computer programmer B. a computer C. silicon (sand) used to make computer chips D. a piece of software used by a firm
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a computer programmer.
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Which of the following is a land resource? A. a farmer B. an oil drilling rig C. a machine for detecting earthquakes. D. natural gas
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natural gas.
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Money is not an economic resource because
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money, as such, is not productive.
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A production possibilities curve shows
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the maximum amounts of two goods that can be produced assuming the full use of available resources.
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A nation's production possibilities curve is bowed out from the origin because
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resources are not equally efficient in producing every good.
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Any point inside the production possibilities curve indicates
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that more output could be produced with available resources.
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The law of increasing opportunity costs states that
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if society wants to produce more of a particular good, it must sacrifice larger and larger amounts of other goods to do so.
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Some agricultural sub-Saharan nations of Africa have over farmed and overgrazed their land to the extent that significant portions of it have turned into desert. This suggests that
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the production possibilities curves of such nations have shifted inward.
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Which of the following has to do with the idea that generalizations that apply to individuals are also always valid for a group? A. the law of large numbers B. the law of averages C. the fallacy of composition D. the post hoc, ergo propter hoc fallacy
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the fallacy of composition.
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The French term "laissez-faire" means
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"let it be."
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Copyrights and trademarks are examples of
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property rights.
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The invisible hand concept suggests that
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when firms maximize their profits, society's output will also be maximized.
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Households and businesses are
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sellers in the resource and product markets respectively.
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The law of demand states that
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price and quantity demanded are inversely related.
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The demand curve shows the relationship between
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price and quantity demanded.
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When the price of a product rises, consumers shift their purchases to other products whose prices are now relatively lower. This statement describes
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the substitution effect.
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In the past few years, the demand for donuts has greatly increased. This increase in demand might best be explained by
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a change in buyer tastes.
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A decrease in the price of cameras will
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shift the demand curve for film to the right.
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A normal good is one
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the consumption of which varies directly with incomes.
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The term quantity demanded
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refers to the amount of a product that will be purchased at some specific price.
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An increase in demand means that
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the demand curve has shifted to the right.
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An increase in product price will cause:
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quantity demanded to decrease.
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If there is a shortage of product X
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the price of the product will rise.
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At the point where the demand and supply curves intersect
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there is neither a surplus nor a shortage of the product.
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A price floor means that
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government is imposing a minimum legal price that is typically above the equilibrium price.
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An effective price floor will
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Result in a product surplus.