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Quiz on ECON102: Macroeconomics MidTerm Review, created by devonelisevan on 15/10/2014.

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ECON102: Macroeconomics MidTerm Review

Question 1 of 31

1

A situation where people have to make choices based on unlimited wants and limited resources is known as

Select one of the following:

  • Factors of production

  • Macroeconomics

  • Scarcity

  • Law of Demand

Explanation

Question 2 of 31

1

Which of the following is an example of a price floor?

Select one of the following:

  • Agricultural price supports

  • Rent controls

  • Minimum wages

  • Both a and c

Explanation

Question 3 of 31

1

What is the portion of the unemployed that is accounted for by people who are out of work for long periods of time because their skills do not match those required for available jobs known as?

Select one of the following:

  • Structural unemployment

  • Functional unemployment

  • Frictional unemployment

  • Cyclical unemployment

Explanation

Question 4 of 31

1

Farmers can choose to produce eggs or milk. If there is an increase in the price of milk then what will be the effect on the egg market?

Select one of the following:

  • Egg supply will increase.

  • Egg supply will decrease.

  • Egg demand will decrease.

  • The quantity of eggs demanded will increase.

Explanation

Question 5 of 31

1

Positive economics focuses on

Select one of the following:

  • How to fairly allocate goods and services in the economy.

  • Determining which government policies are good for the economy.

  • Observed facts and the relationship between them.

  • All of the above.

Explanation

Question 6 of 31

1

The Law of Demand states that as the price of a good ____________________, the quantity demanded tends to ________________.

Select one of the following:

  • Increases....increase

  • Decreases....remain unchanged

  • Decreases....decrease

  • Increases....decrease

Explanation

Question 7 of 31

1

If a decrease in the price of good Y causes the demand for good Z to decrease, this indicates that

Select one of the following:

  • Y and Z are complements.

  • the demand for Y is elastic, but the demand for Z is inelastic.

  • Y and Z are substitutes.

  • Y and Z are unrelated.

Explanation

Question 8 of 31

1

A price floor that sets the price of a good above market equilibrium will cause

Select one of the following:

  • a surplus of the good.

  • a decrease in quantity demanded of the good.

  • an increase in quantity supplied of the good.

  • All of the above.

Explanation

Question 9 of 31

1

What is the term for the process of adjusting payments like social security benefits for changes in the price level?

Select one of the following:

  • Realization

  • Nominal adjustment

  • Indexation

  • Cyclical alignment

Explanation

Question 10 of 31

1

Which of the following is most likely to shift the demand curve for electricity to the left?

Select one of the following:

  • An increase in income

  • An increase in the price of natural gas, a substitute source of energy

  • A decrease in the price of electricity

  • Consumers being more energy conscious

Explanation

Question 11 of 31

1

A graph the shows the possible combination of goods that can be produced by an economy given available knowledge and factors of production is called

Select one of the following:

  • Production Possibilities Curve

  • Supply schedule

  • Demand schedule

  • Consumer price index

Explanation

Question 12 of 31

1

The highest valued alternative that must be given up in order to choose an option is called

Select one of the following:

  • opportunity cost.

  • disutility.

  • utility.

  • scarcity.

Explanation

Question 13 of 31

1

Two products that are usually consumed jointly would be referred to as

Select one of the following:

  • unrelated goods.

  • complements.

  • substitutes.

  • inferior goods.

Explanation

Question 14 of 31

1

Farmers can produce wheat and/or corn. What will happen in the wheat market if there is an increase in price of corn?

Select one of the following:

  • Wheat supply will decrease.

  • Wheat demand will decrease.

  • Wheat supply will increase.

  • Wheat demand will increase.

Explanation

Question 15 of 31

1

Suppose a seller finds a new technology that increases the speed with which he can produce the good. This leads to

Select one of the following:

  • A decrease in the quantity supplied for this good.

  • An increase in the price of this good.

  • The supply curve for this good shifts to the right.

  • An increase in the opportunity cost of producing the good.

Explanation

Question 16 of 31

1

The type of unemployment which occurs when workers are briefly between jobs is called

Select one of the following:

  • structural unemployment.

  • frictional unemployment.

  • functional unemployment.

  • cyclical unemployment.

Explanation

Question 17 of 31

1

Economics is primarily the study of

Select one of the following:

  • the choices we must make among alternatives because of scarcity.

  • how to make money in the stock market.

  • the proper form of industrial structure for the United States.

  • how to find lower cost methods of production.

Explanation

Question 18 of 31

1

Comparative advantage is when

Select one of the following:

  • two parties can complete a task equally well.

  • One person can produce more than another person.

  • One person can produce a good at a lower opportunity cost than another person.

Explanation

Question 19 of 31

1

If the price of Coke decreases, the demand curve for Pepsi will

Select one of the following:

  • remain unchanged.

  • shift to the right.

  • shift to the left.

  • do none of the above.

Explanation

Question 20 of 31

1

Which of the following goods are likely to be complements?

Select one of the following:

  • potato chips and pretzels.

  • Pepsi and Coke.

  • hot dogs and hot dog buns.

  • DVD players and VCRs.

Explanation

Question 21 of 31

1

The Law of Supply states that as the price ________________, the quantity supplied tends to ________________.

Select one of the following:

  • decreases....increase

  • increases....decrease

  • decreases....remain unchanged

  • increases....increase

Explanation

Question 22 of 31

1

Which of the following is a measurement of improvements in technology and organization that allow more output per unit of labor and capital inputs?

Select one of the following:

  • Real input productivity

  • Total factor productivity

  • Nominal capital productivity

  • Real labor productivity

Explanation

Question 23 of 31

1

If the demand for a good increased, what would be the effect on the equilibrium price and quantity?

Select one of the following:

  • Price would decrease, and quantity would increase.

  • Price would increase, and quantity would increase.

  • Price would decrease, and quantity would decrease.

  • Price would increase, and quantity would decrease.

Explanation

Question 24 of 31

1

Which of the following is an example of a normative economic statement?

Select one of the following:

  • The economy grew at an annual rate of 5% during the first quarter this year.

  • The minimum wage should be increased so that low income workers can afford to keep up with the cost of living.

  • If two automobile companies merge, it is likely that the price of automobiles will rise.

  • The inflation rate in the United States decreased from 4% last year to 3% this year as a result of lower energy prices.

Explanation

Question 25 of 31

1

Three key economic ideas/assumptions:

Select one or more of the following:

  • People are rational.

  • Every society faces trade-offs.

  • Optimal decisions are made at the margin.

  • A market is a group of buyers and sellers of a good or service.

  • Markets reward hard work.

  • Use economic data to test hypotheses.

  • People respond to economic incentives.

  • Economic issues must be simplified to be analyzed and understandable.

Explanation

Question 26 of 31

1

Type of unemployment where overall demand for goods and services in an economy cannot support full employment.

Select one of the following:

  • Cyclical unemployment

  • Frictional unemployment

  • Functional unemployment

  • Structural unemployment

Explanation

Question 27 of 31

1

A price set below equilibrium will lead to a

Select one of the following:

  • shortage.

  • surplus.

  • price ceiling.

  • contraction.

Explanation

Question 28 of 31

1

A price floor that sets price above market equilibrium will cause

Select one or more of the following:

  • an increase in quantity demanded.

  • a decrease in quantity demanded.

  • an increase in quantity supplied.

  • a decrease in quantity supplied.

  • a surplus.

  • a shortage.

Explanation

Question 29 of 31

1

_______________ make(s) trade-offs necessary,

Select one of the following:

  • Alternatives

  • Scarcity

  • Comparative advantage

  • Normative analysis

Explanation

Question 30 of 31

1

Analysis of "what ought to be"

Select one of the following:

  • Positive analysis

  • Normative analysis

Explanation

Question 31 of 31

1

If price is set above market equilibrium, there will be a

Select one of the following:

  • shortage.

  • surplus.

  • deadweight loss.

  • comparative advantage.

Explanation

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