66 Multiple choices. show calculation for calculative question.
Date Sent: Saturday, March 21st 2020
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Date Due: Tuesday, March 31st 2020
Course: Survey of Economics-ECO 120-40N
#Credits:3.0
Instructor’s Name: Michael Heslop
Telephone#: (703)-323-3254
e-mail address :mgheslop@nvcc.edu
Office#: CN 214J
Mailbox: CN 214
Semester/Year: Spring 2020
Classroom/Time: TTH: 4:30PM-6:00PM (CN 114)
This multiple-choice test contains a total of sixty-six (66) questions for all students. The first forty-eight (48) questions are compulsory for all students and the other eighteen (18) questions are for extra credits and are therefore optional.
Choose the best answer among the options for each of the questions below
This Take-Home Test is due on the date stipulated above without delay!
Do all Questions
(1)“People respond to incentives” is:
(a)Principle#2
(b)Principle#4
(c)Principle#5
(d)Principle#8
(2)The theoretical principle which states that an increase in the price of a resource causes a decrease in the quantity demanded of the resource and vice versa is a description of the:
(a)Law of Gravity
(b)Law of Demand
(c)Law of Supply
(d)Any of the above
(3)The underlying assumption for the economic principle identified in Q#2 above to work is:
(a)That consumers incomes are changing
(b)That government policy is changing
(c)Ceteris Paribus
(d)Consumers’ preferences are changing
(4)The slope of the demand curve that conforms to the theoretical principle that is described in Q#2 above is:
(a)Vertical
(b)Horizontal
(c)Inverse
(d)None of the above
(5)Which of the following statements about a market for strawberries in which the demand curve is expressed as D=140-4P and the supply curve is expressed as S=60+6P is false?
(a)The demand and supply “curves” are expressed as linear equations
(b)The “demand curve” conforms to the law of demand
(c)Both “curves” intersect each other at a common point
(d)None of the above
(6)The equilibrium price and quantity of strawberries traded in the market referenced in Q#5 above are:
(a)P=$10, 10 crates
(b)P=$5, 110 crates
(c)P=$80, 10 crates
(d)None of the above
(7)Which of the following statements is false?
The equation D=25 represents a demand curve for laptop computers that:
(a)Conforms to the law of demand
(b)Is negatively sloped
(c)Is horizontally sloped
(d)All of the above
Table#1-Supply and Demand for Vegan Patties
Vegan Patties demanded
Per month
Price Per Vegan Patties
Vegan Patties supplied
Per Month
35
$9.25
109
65
7.45
96
68
5.88
68
75
3.75
60
80
2.15
30
(8)Which of the following statements about the price-quantity data in Table#1 is true?
(a)The prices above the equilibrium price create a shortage of Vegan patties
(b)The prices above the equilibrium price create a surplus of Vegan patties
(c)The prices below the equilibrium price create a glut of Vegan patties
(d)None of the above
(9)Which of the following statements at a price of $5.90 per Vegan Patty in Table#1 is true?
(a)The demand for Vegan Patties will exceed the supply of Vegan Patties
(b)There will be a shortage of Vegan Patties in the market
(c)The supply of Vegan Patties will exceed the demand for Vegan Patties
(d)All of the above
(10)Which of the following statements about the market forces of demand is false?
(a)Markets cannot function without them
(b)They are consumers
(c)They represent the demand side of markets
(d)None of the above
D1
D2
D3
D2
D3
D1
Price Per Unit of Good A
Quantity demanded of Good A
Figure#1-Demand Curves
(11)Which of the demand curves in Figure#1 above violates the law of demand?
(a)D1D1 only
(b)D2D2
(c)D3D3
(d)D2D2 and D3D3
(12)Which of the demand lines in Figure#1 above has the steepest slope?
(a)D1D1
(b)D2D2
(c)D3D3
(d)D1D1 and D2D2
(13)The term “the invisible hand” suggests that:
(a)The market forces of supply and demand operate freely in competitive markets
(b)Individuals know better than governments about their self-interests
(c)The pursuit of private self-interests optimizes society’s welfare
(d)All of the above
(14)Which of the following characteristics about command economies is false?
(a)There is voluntary exchange between buyers and sellers in markets
(b)Profit is the main motivation for economic activity
(c)Social ownership is the dominant form of property ownership
(d)Central planning is the dominant economic system
(15)Which of the following statements is true?
The self-equilibrating capacity of the market system refers to:
(a)The inability of consumers and producers to agree on prices and quantities in a market economy
(b)The difference between the quantity demanded and quantity supplied for goods in a market economy
(c)It is the ability of markets to clear themselves of surpluses and shortages
(d)It is another name for a disequilibrium in a market
Dx
Sx
Price Per Unit ($)
Quantities
P1
Q1
Figure#2-Demand-Supply Curves
A
P3
P2
(16)Which of the following statements about the diagram in Figure#2 above is false?
(a)The demand curve violates the law of demand
(b)There is a shortage at P3
(c)There is a glut at P2
(d)All of the above
Table#2-Supply for Macabee Coffee Beans
Quantity Supplied Per Week (Millions of Bushels)
Price Per Bushel
6
$3.00
5
2.50
4
2.00
3
1.50
2
1.00
1
0.80
(17)In reference to Table#2 above, assume the price of Macabee’s coffee beans to be $1.00 per bushel. If the price were to increase to $3.00 per bushel, given ceteris paribus, the result would be a (an):
(a)Decrease in demand
(b)Increase in quantity supplied
(c)Decrease in quantity supplied
(d)Increase in quantity demanded
(18)Which of the following statements is false?
Neoclassical economists:
(a)Are free market economists
(b)Believe that market economies are more efficient than command economies
(c)Dislike government regulation of markets
(d)None of the above
(19)The former society known as the Soviet Union had a_______________________________
(a)Free market economy
(b)Feudal economy
(c)Traditional economy
(d)Command economy
(20)Consider a market for colognes in which the demand and supply equations are given as:
D=450-7P
S=330+3P
Which of the following price-quantity combination will prevail at equilibrium of this market for colognes?
(a)P=$15, Q=175
(b)P=$12, Q=366
(c)P=$10, Q=480
(d)P=$12, Q=485
(21)Is there an equilibrium price-quantity combination in the market for colognes in Q#21 above?
(a)No, because the slopes of the demand and supply curves are identical
(b)Yes, because the slopes of the demand and supply curves are identical
(c)No, because the demand and supply curves are parallel to each other
(d)None of the above
$Price Per I-Phones
Quantity of I-Phones purchased (Dozens per week)
0
20
40
B
Figure#4-Demand and Supply Curves for I-Phones
Demand Curve for I-Phones
Supply Curve for I-Phones
275
250
185
(22)In Figure#4, if the price of I-Phone is currently at $185 per I-Phone in this market, a—————-would result, causing a—————-in price.
(a)Shortage; increase
(b)Surplus; decrease
(c)Surplus; increase
(d)Market clearing; change
Laptops
Blackberries
Figure#5- The Production Possibilities Frontier Curve for the economy of Sindia
A
B
C
D
E
(23)Which of the following statements is true?
The PPF for the economy of Sindia depicted in Figure#5 above illustrates:
(a)An increase in the output in the laptop producing sector
(b)A decrease in the output of the blackberries producing sector
(c)An outward rotation in the PPF for the blackberry producing sector
(d)An inward shift in the PPF of the economy of Sindia
(24)Which of the following statements is false?
The PPF for the economy of Sindia depicted in Figure#5 above illustrates:
(a)A rightward rotation
(b)A shift to the right
(c)A shift to the left
(d)All of the above
(25)Which of the following statements is true?
Another name for a deficit of a resource in a market is:
(a)A shortage of a resource
(b)A glut of a resource
(c)A surplus of a resource
(d)Excess supply of a resource
(26)Which of the following statements about an equilibrium point in a market is false?
(a)There is a unique point called a clearing point in a market
(b)There is no excess supply and no excess demand for a resource
(c)The market is cleared of gluts and deficits of a resource being traded
(d)None of the above
(27)Which of the following statements is false?
Capitalist economies:
(a)Face the problem of scarcity
(b)Face trade-offs
(c)Face opportunity costs
(d)None of the above
(28)Central planning is the dominant mechanism that is used to allocate resources in:
(a)Command economies
(b)Traditional economies
(c)Free market economies
(d)None of the above
(29)The decision of lobster farmers to supply 1,000,000 lbs. of lobsters to local markets on a monthly basis in order to satisfy their clients’ consumption needs is in keeping with which of the following questions:
(a)How to produce lobsters?
(b)Where to produce lobsters?
(c)When to produce lobsters?
(d)None of the above
(30)Suppose Qs is the quantity supplied at a given price for brown rice and Qd is the quantity demanded at the same given price for brown rice. Which of the following market conditions produces an upward movement of the price for brown rice?
(a)Qs =1,000, Qd =860
(b)Qs =850, Qd=850
(c)Qs=750, Qd=1,000
(d)Qs=1,000, Qd=1,000
(31)Which of the following statements is true?
The factors that determine the prices of personal computers in the City of Springfield in Virginia are a concern of:
(a)Both macroeconomists and microeconomists
(b)Neither microeconomists nor macroeconomists
(c)Microeconomists
(d)Macroeconomists
(32)Mechanical engineers and computer programmers are examples of:
(a)Labor and natural resources
(b)Human capital resources
(c)Human capital and capital resources
(d)Natural resources and manufactured capital
(33)Which of the following statements is true?
Scarcity can be eliminated if:
(a)People satisfy their wants and not their needs
(b)Sufficient new resources were discovered
(c)Output of goods and services were increased
(d)None of the above
(34)People are forced to make choices in their societies because of:
(a)Limited wants and needs and unlimited resources
(b)Unlimited wants and needs and unlimited resources
(c)unlimited wants and needs and limited resources
(d)Finite wants and needs and finite resources
(35)Which of the following statements is false?
The condition of scarcity:
(a)Prevails only in Asian societies
(b)Prevails in rich societies
(c)Cannot be eliminated
(d)Prevails in big societies
(36)The Atlantic Ocean is an example of a:
(a)Capital resource
(b)Human resource
(c)Natural resource
(d)None of the above
(37)Which of the following statements is true?
Economists use the word “demand” to mean:
(a)The forced consumption of goods and services against the voluntary will of someone
(b)The failure of consumers to satisfy their voluntary wants for consumer goods and services
(c)The ability of consumers to satisfy their wants for goods and services because they are able to afford them
(d)None of the above
(38)Which of the following statements is false?
The central economic problem in a society is:
(a)The result of scarcity
(b)The dominant economic problem in every society
(c)The existence of infinite resources and finite wants and needs of people
(d)All of the above
(39)The opportunity cost of working out at your local gym is:
(a)All of the other gyms in your locality where you could have worked out
(b)The monetary cost of working out at your local gym
(c)Your next favored alternative activity that you have to sacrifice to work out at your local gym
(d)Your local park that is not being properly maintained by local officials
(40)Mercedes Benzes motor cars are traded in markets and so it would be reasonable to conclude that they are:
(a)Economic goods
(b)Those who purchase them have disposable incomes
(c)Those who produce or sell them may or may not make a profit
(d)All of the above
(41)Which of the following is a pair of capital resources in a country’s economy?
(a)Botanists and Historians
(b)Singers and PCs
(c)Tractors and trains
(d)Baseball players and forests
(42)Economists believe that scarcity causes everyone to:
(a)Satisfy all the wants with limited resources
(b)Make choices in their use of resources
(c)Disguise their wants from their needs
(d)Create unlimited resources
(43)Simplifying assumptions are always made by scientists in order to:
(a)Collect useful data
(b)Provide a complete description about reality
(c)Construct models
(d)Develop equations
(44)The statement, “Matuza buys more CD players as her income increases, ceteris paribus” means:
(a)Matuza’s income is being held constant
(b)Matuza’s purchases of CD players are being held constant
(c)Matuza’s income is the only factor that is allowed to vary
(d)All of the above
(45)The usefulness of a macroeconomic model is determined by its ability to:
(a)Capture all the complexities of an economy
(b)Have both microeconomic and macroeconomic applications
(c)Yield accurate predictions about an economy
(d)All of the above
(46)Which of the following statements is true?
The fallacy of composition is:
(a)A common fallacy in macroeconomics
(b)A flawed way of assessing the relationship between the whole and parts of the whole and vice versa
(c)An illogical way of reasoning that leads to inaccurate conclusions
(d)All of the above
(47)Another name for a country’s national income accounting system is:
(a)Federal Accounting System
(b)National Income and Product Accounts
(c)Bureau of Economic Analysis
(d)None of the above
(48)Suppose the GDP is equal to $1580b, G=$470b, Ig=$260b, X=$8b, M=$5b, what is the value of C?
(a)$1265b
(b)$853b
(c)$847b
(d)None of the above
Extra Credit Questions-Optional
(49)Which of the following statements is true?
The GDP per capita and the GNP are called:
(a)Microeconomic aggregates
(b)International aggregates
(c)Macroeconomic indicators
(d)None of the above
(50)Which of the following statements is true?
Another name for GNP per capita:
(a)GDP per capita
(b)Per capita Income
(c)NDP per capita
(d)None of the above
(51)GDP includes:
(a)Intermediate as well as final goods
(b)Foreign goods as well as domestically produced goods
(c)Only final goods and services
(d)All of the above
(52)Suppose the market value of prostitution in Sweden, a country where prostitution is a legalized is $75 billion a year, a macroeconomist who says that the GDP of her country will increase by $75, 000,000,000 a year is:
(a)Correct
(b)Incorrect
(c)(a) or (b) above
(d)More information needed to respond
Table#1-National Income Accounts
National Income Accounts
$Billions
Consumption expenditures
$1855
Interest
190
Corporate profit
150
Depreciation
200
Rent
70
Gross domestic investment
1250
Compensation of employees
830
Federal government expenditures
530
State government expenditures
235
Local government expenditures
140
Exports
220
Imports
270
(53)The GDP in Table#1 is equal to:
(a)$3960b
(b)$5430b
(c)$3420b
(d)$6165b
(54)In Table#1, NDP equals:
(a)$2756b
(b)$3760b
(c)$4320b
(d)$5875b
(55)As shown in Table#1, the net exports in the economy are:
(a)A surplus
(b)A deficit
(c)More information needed
(d)None of the above
(56)Is there a net surplus or a net deficit on the BOT account in the economy depicted in Table#1 above?
(a)A BOT deficit
(b)A BOT surplus
(c)A BOT equilibrium
(d)More information needed
(57)Which of the following represents the percent share of state government expenditures as a share of aggregate government expenditures in Table#1 above?
(a)7 percent
(b)16 percent
(c)26 percent
(d)None of the above
(58)Which of the following is aggregate government expenditures in Table#1 above?
(a)$890b
(b)$905b
(c)$405b
(d)None of the above
(59)Which of the following statements is true?
The method used to compute the monetary value of the GDP in Q#58 above is known in national income accounting as:
(a)The Deflating method
(b)The Output method
(c)Income method
(d)None of the above
(60)Which of the following statements is true?
GNP:
(a)Measures the total output of final goods and services within a country’s economy in a year
(b)Includes only goods and services produced by the citizens of a country
(c)Includes intermediate inputs
(d)All of the above
(61)Which of the following statements is false?
The monetary value of the output of $20 billion worth of cars by the Honda Corporation in India’s economy would be counted in:
(a)Japan’s GNP
(b)India’s GDP
(c)America’s GNP
(d)All of the above
(62)Suppose the GDP per capita of Bolivia was equal to US$650 and its GDP was equal to US$30 billion in 2019, which of the following represented Bolivia’s population in 2019:
(a)10 million
(b)8 million
(c)More information needed
(d)None of the above
(63)Which of the following is not a component of aggregate investment expenditures in a country’s GDP:
(a)Business investment expenditures
(b)Changes in inventories
(c)Durable consumption expenditures
(d)None of the above
(64)Suppose you are told that the CPI in an economy for 2005 was 245 and its CPI in 2010 was 325, what was the rate of inflation for the economy over the years 2005-2010?
(a)26 percent
(b)19 percent
(c)More information needed
(d)None of the above
(65)Which of the following activities is not considered part of US GDP accounts?
(a)Market value of surgeries
(b)Market value of cocaine
(c)Market value of steel
(d)Market value of perfumes
(66)The 3rd quarter of any calendar year begins_______________ and ends______________.
(a)July 1st to September 30th
(b)March 1st to June 30th
(c)April 1st to June 30th
(d)October 1st to December 31st
7
Answer key
(1)“People respond to incentives” is:
(a)Principle#2
(b)Principle#4
(c)Principle#5
(d)Principle#8
(2)The theoretical principle which states that an increase in the price of a resource causes a decrease in the quantity demanded of the resource and vice versa is a description of the:
(a)Law of Gravity
(b)Law of Demand
(c)Law of Supply
(d)Any of the above
(3)The underlying assumption for the economic principle identified in Q#2 above to work is:
(a)That consumers incomes are changing
(b)That government policy is changing
(c)Ceteris Paribus
(d)Consumers’ preferences are changing
(4)The slope of the demand curve that conforms to the theoretical principle that is described in Q#2 above is:
(a)Vertical
(b)Horizontal
(c)Inverse
(d)None of the above
(5)Which of the following statements about a market for strawberries in which the demand curve is expressed as D=140-4P and the supply curve is expressed as S=60+6P is false?
(a)The demand and supply “curves” are expressed as linear equations
(b)The “demand curve” conforms to the law of demand
(c)Both “curves” intersect each other at a common point
(d)None of the above
(6)The equilibrium price and quantity of strawberries traded in the market referenced in Q#5 above are:
(a)P=$10, 10 crates
(b)P=$5, 110 crates
(c)P=$80, 10 crates
(d)None of the above
(7)Which of the following statements is false?
The equation D=25 represents a demand curve for laptop computers that:
(a)Conforms to the law of demand
(b)Is negatively sloped
(c)Is horizontally sloped
(d)All of the above
Table#1-Supply and Demand for Vegan Patties
Vegan Patties demanded
Per month
Price Per Vegan Patties
Vegan Patties supplied
Per Month
35
$9.25
109
65
7.45
96
68
5.88
68
75
3.75
60
80
2.15
30
(8)Which of the following statements about the price-quantity data in Table#1 is true?
(a)The prices above the equilibrium price create a shortage of Vegan patties
(b)The prices above the equilibrium price create a surplus of Vegan patties
(c)The prices below the equilibrium price create a glut of Vegan patties
(d)None of the above
(9)Which of the following statements at a price of $5.90 per Vegan Patty in Table#1 is true?
(a)The demand for Vegan Patties will exceed the supply of Vegan Patties
(b)There will be a shortage of Vegan Patties in the market
(c)The supply of Vegan Patties will exceed the demand for Vegan Patties
(d)All of the above
(10)Which of the following statements about the market forces of demand is false?
(a)Markets cannot function without them
(b)They are consumers
(c)They represent the demand side of markets
(d)None of the above
D1
D2
D3
D2
D3
D1
Price Per Unit of Good A
Quantity demanded of Good A
Figure#1-Demand Curves
(11)Which of the demand curves in Figure#1 above violates the law of demand?
(a)D1D1 only
(b)D2D2
(c)D3D3
(d)D2D2 and D3D3
(12)Which of the demand lines in Figure#1 above has the steepest slope?
(a)D1D1
(b)D2D2
(c)D3D3
(d)D1D1 and D2D2
(13)The term “the invisible hand” suggests that:
(a)The market forces of supply and demand operate freely in competitive markets
(b)Individuals know better than governments about their self-interests
(c)The pursuit of private self-interests optimizes society’s welfare
(d)All of the above
(14)Which of the following characteristics about command economies is false?
(a)There is voluntary exchange between buyers and sellers in markets
(b)Profit is the main motivation for economic activity
(c)Social ownership is the dominant form of property ownership
(d)Central planning is the dominant economic system
(15)Which of the following statements is true?
The self-equilibrating capacity of the market system refers to:
(a)The inability of consumers and producers to agree on prices and quantities in a market economy
(b)The difference between the quantity demanded and quantity supplied for goods in a market economy
(c)It is the ability of markets to clear themselves of surpluses and shortages
(d)It is another name for a disequilibrium in a market
Dx
Sx
Price Per Unit ($)
Quantities
P1
Q1
Figure#2-Demand-Supply Curves
A
P3
P2
(16)Which of the following statements about the diagram in Figure#2 above is false?
(a)The demand curve violates the law of demand
(b)There is a shortage at P3
(c)There is a glut at P2
(d)All of the above
Table#2-Supply for Macabee Coffee Beans
Quantity Supplied Per Week (Millions of Bushels)
Price Per Bushel
6
$3.00
5
2.50
4
2.00
3
1.50
2
1.00
1
0.80
(17)In reference to Table#2 above, assume the price of Macabee’s coffee beans to be $1.00 per bushel. If the price were to increase to $3.00 per bushel, given ceteris paribus, the result would be a (an):
(a)Decrease in demand
(b)Increase in quantity supplied
(c)Decrease in quantity supplied
(d)Increase in quantity demanded
(18)Which of the following statements is false?
Neoclassical economists:
(a)Are free market economists
(b)Believe that market economies are more efficient than command economies
(c)Dislike government regulation of markets
(d)None of the above
(19)The former society known as the Soviet Union had a_______________________________
(a)Free market economy
(b)Feudal economy
(c)Traditional economy
(d)Command economy
(20)Consider a market for colognes in which the demand and supply equations are given as:
D=450-7P
S=330+3P
Which of the following price-quantity combination will prevail at equilibrium of this market for colognes?
(a)P=$15, Q=175
(b)P=$12, Q=366
(c)P=$10, Q=480
(d)P=$12, Q=485
(21)Is there an equilibrium price-quantity combination in the market for colognes in Q#21 above?
(a)No, because the slopes of the demand and supply curves are identical
(b)Yes, because the slopes of the demand and supply curves are identical
(c)No, because the demand and supply curves are parallel to each other
(d)None of the above
$Price Per I-Phones
Quantity of I-Phones purchased (Dozens per week)
0
20
40
B
Figure#4-Demand and Supply Curves for I-Phones
Demand Curve for I-Phones
Supply Curve for I-Phones
275
250
185
(22)In Figure#4, if the price of I-Phone is currently at $185 per I-Phone in this market, a—————-would result, causing a—————-in price.
(a)Shortage; increase
(b)Surplus; decrease
(c)Surplus; increase
(d)Market clearing; change
Laptops
Blackberries
Figure#5- The Production Possibilities Frontier Curve for the economy of Sindia
A
B
C
D
E
(23)Which of the following statements is true?
The PPF for the economy of Sindia depicted in Figure#5 above illustrates:
(a)An increase in the output in the laptop producing sector
(b)A decrease in the output of the blackberries producing sector
(c)An outward rotation in the PPF for the blackberry producing sector
(d)An inward shift in the PPF of the economy of Sindia
(24)Which of the following statements is false?
The PPF for the economy of Sindia depicted in Figure#5 above illustrates:
(a)A rightward rotation
(b)A shift to the right
(c)A shift to the left
(d)All of the above
(25)Which of the following statements is true?
Another name for a deficit of a resource in a market is:
(a)A shortage of a resource
(b)A glut of a resource
(c)A surplus of a resource
(d)Excess supply of a resource
(26)Which of the following statements about an equilibrium point in a market is false?
(a)There is a unique point called a clearing point in a market
(b)There is no excess supply and no excess demand for a resource
(c)The market is cleared of gluts and deficits of a resource being traded
(d)None of the above
(27)Which of the following statements is false?
Capitalist economies:
(a)Face the problem of scarcity
(b)Face trade-offs
(c)Face opportunity costs
(d)None of the above
(28)Central planning is the dominant mechanism that is used to allocate resources in:
(a)Command economies
(b)Traditional economies
(c)Free market economies
(d)None of the above
(29)The decision of lobster farmers to supply 1,000,000 lbs. of lobsters to local markets on a monthly basis in order to satisfy their clients’ consumption needs is in keeping with which of the following questions:
(a)How to produce lobsters?
(b)Where to produce lobsters?
(c)When to produce lobsters?
(d)None of the above
(30)Suppose Qs is the quantity supplied at a given price for brown rice and Qd is the quantity demanded at the same given price for brown rice. Which of the following market conditions produces an upward movement of the price for brown rice?
(a)Qs =1,000, Qd =860
(b)Qs =850, Qd=850
(c)Qs=750, Qd=1,000
(d)Qs=1,000, Qd=1,000
(31)Which of the following statements is true?
The factors that determine the prices of personal computers in the City of Springfield in Virginia are a concern of:
(a)Both macroeconomists and microeconomists
(b)Neither microeconomists nor macroeconomists
(c)Microeconomists
(d)Macroeconomists
(32)Mechanical engineers and computer programmers are examples of:
(a)Labor and natural resources
(b)Human capital resources
(c)Human capital and capital resources
(d)Natural resources and manufactured capital
(33)Which of the following statements is true?
Scarcity can be eliminated if:
(a)People satisfy their wants and not their needs
(b)Sufficient new resources were discovered
(c)Output of goods and services were increased
(d)None of the above
(34)People are forced to make choices in their societies because of:
(a)Limited wants and needs and unlimited resources
(b)Unlimited wants and needs and unlimited resources
(c)unlimited wants and needs and limited resources
(d)Finite wants and needs and finite resources
(35)Which of the following statements is false?
The condition of scarcity:
(a)Prevails only in Asian societies
(b)Prevails in rich societies
(c)Cannot be eliminated
(d)Prevails in big societies
(36)The Atlantic Ocean is an example of a:
(a)Capital resource
(b)Human resource
(c)Natural resource
(d)None of the above
(37)Which of the following statements is true?
Economists use the word “demand” to mean:
(a)The forced consumption of goods and services against the voluntary will of someone
(b)The failure of consumers to satisfy their voluntary wants for consumer goods and services
(c)The ability of consumers to satisfy their wants for goods and services because they are able to afford them
(d)None of the above
(38)Which of the following statements is false?
The central economic problem in a society is:
(a)The result of scarcity
(b)The dominant economic problem in every society
(c)The existence of infinite resources and finite wants and needs of people
(d)All of the above
(39)The opportunity cost of working out at your local gym is:
(a)All of the other gyms in your locality where you could have worked out
(b)The monetary cost of working out at your local gym
(c)Your next favored alternative activity that you have to sacrifice to work out at your local gym
(d)Your local park that is not being properly maintained by local officials
(40)Mercedes Benzes motor cars are traded in markets and so it would be reasonable to conclude that they are:
(a)Economic goods
(b)Those who purchase them have disposable incomes
(c)Those who produce or sell them may or may not make a profit
(d)All of the above
(41)Which of the following is a pair of capital resources in a country’s economy?
(a)Botanists and Historians
(b)Singers and PCs
(c)Tractors and trains
(d)Baseball players and forests
(42)Economists believe that scarcity causes everyone to:
(a)Satisfy all the wants with limited resources
(b)Make choices in their use of resources
(c)Disguise their wants from their needs
(d)Create unlimited resources
(43)Simplifying assumptions are always made by scientists in order to:
(a)Collect useful data
(b)Provide a complete description about reality
(c)Construct models
(d)Develop equations
(44)The statement, “Matuza buys more CD players as her income increases, ceteris paribus” means:
(a)Matuza’s income is being held constant
(b)Matuza’s purchases of CD players are being held constant
(c)Matuza’s income is the only factor that is allowed to vary
(d)All of the above
(45)The usefulness of a macroeconomic model is determined by its ability to:
(a)Capture all the complexities of an economy
(b)Have both microeconomic and macroeconomic applications
(c)Yield accurate predictions about an economy
(d)All of the above
(46)Which of the following statements is true?
The fallacy of composition is:
(a)A common fallacy in macroeconomics
(b)A flawed way of assessing the relationship between the whole and parts of the whole and vice versa
(c)An illogical way of reasoning that leads to inaccurate conclusions
(d)All of the above
(47)Another name for a country’s national income accounting system is:
(a)Federal Accounting System
(b)National Income and Product Accounts
(c)Bureau of Economic Analysis
(d)None of the above
(48)Suppose the GDP is equal to $1580b, G=$470b, Ig=$260b, X=$8b, M=$5b, what is the value of C?
(a)$1265b
(b)$853b
(c)$847b
(d)None of the above
Extra Credit Questions-Optional
(49)Which of the following statements is true?
The GDP per capita and the GNP are called:
(a)Microeconomic aggregates
(b)International aggregates
(c)Macroeconomic indicators
(d)None of the above
(50)Which of the following statements is true?
Another name for GNP per capita:
(a)GDP per capita
(b)Per capita Income
(c)NDP per capita
(d)None of the above
(51)GDP includes:
(a)Intermediate as well as final goods
(b)Foreign goods as well as domestically produced goods
(c)Only final goods and services
(d)All of the above
(52)Suppose the market value of prostitution in Sweden, a country where prostitution is a legalized is $75 billion a year, a macroeconomist who says that the GDP of her country will increase by $75, 000,000,000 a year is:
(a)Correct
(b)Incorrect
(c)(a) or (b) above
(d)More information needed to respond
Table#1-National Income Accounts
National Income Accounts
$Billions
Consumption expenditures
$1855
Interest
190
Corporate profit
150
Depreciation
200
Rent
70
Gross domestic investment
1250
Compensation of employees
830
Federal government expenditures
530
State government expenditures
235
Local government expenditures
140
Exports
220
Imports
270
(53)The GDP in Table#1 is equal to:
(a)$3960b
(b)$5430b
(c)$3420b
(d)$6165b
(54)In Table#1, NDP equals:
(a)$2756b
(b)$3760b
(c)$4320b
(d)$5875b
(55)As shown in Table#1, the net exports in the economy are:
(a)A surplus
(b)A deficit
(c)More information needed
(d)None of the above
(56)Is there a net surplus or a net deficit on the BOT account in the economy depicted in Table#1 above?
(a)A BOT deficit
(b)A BOT surplus
(c)A BOT equilibrium
(d)More information needed
(57)Which of the following represents the percent share of state government expenditures as a share of aggregate government expenditures in Table#1 above?
(a)7 percent
(b)16 percent
(c)26 percent
(d)None of the above
(58)Which of the following is aggregate government expenditures in Table#1 above?
(a)$890b
(b)$905b
(c)$405b
(d)None of the above
(59)Which of the following statements is true?
The method used to compute the monetary value of the GDP in Q#58 above is known in national income accounting as:
(a)The Deflating method
(b)The Output method
(c)Income method
(d)None of the above
(60)Which of the following statements is true?
GNP:
(a)Measures the total output of final goods and services within a country’s economy in a year
(b)Includes only goods and services produced by the citizens of a country
(c)Includes intermediate inputs
(d)All of the above
(61)Which of the following statements is false?
The monetary value of the output of $20 billion worth of cars by the Honda Corporation in India’s economy would be counted in:
(a)Japan’s GNP
(b)India’s GDP
(c)America’s GNP
(d)All of the above
(62)Suppose the GDP per capita of Bolivia was equal to US$650 and its GDP was equal to US$30 billion in 2019, which of the following represented Bolivia’s population in 2019:
(a)10 million
(b)8 million
(c)More information needed
(d)None of the above
(63)Which of the following is not a component of aggregate investment expenditures in a country’s GDP:
(a)Business investment expenditures
(b)Changes in inventories
(c)Durable consumption expenditures
(d)None of the above
(64)Suppose you are told that the CPI in an economy for 2005 was 245 and its CPI in 2010 was 325, what was the rate of inflation for the economy over the years 2005-2010?
(a)26 percent
(b)19 percent
(c)More information needed
(d)None of the above
(65)Which of the following activities is not considered part of US GDP accounts?
(a)Market value of surgeries
(b)Market value of cocaine
(c)Market value of steel
(d)Market value of perfumes
(66)The 3rd quarter of any calendar year begins_______________ and ends______________.
(a)July 1st to September 30th
(b)March 1st to June 30th
(c)April 1st to June 30th
(d)October 1st to December 31st
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