View Results Final Name: MATTHEW DICE Attempt: 1 / 1 Out of: 300 Started: December 9, 2007 4:49pm Finished: December 9, 2007 6:34pm Time spent: 1 hr, 45 min., 36 sec. Student finished 3 hr, 14 min., 24 sec. ahead of the 300 min. time limit. Question 1 (6 points) Economics is Student response: Studen t Respon se Answer Choices a . a hard science that studies choices as agents cope with scarcity. b . a social science that studies choices as agents cope with scarcity. c . the decisions of households and firms aggregated across the economy. d . the decisions of individual households and firms. e . the study of the global financial market.
Transcript
View Results
Final
Name: MATTHEW DICE Attempt: 1 / 1 Out of: 300
Started: December 9, 2007 4:49pm
Finished: December 9, 2007 6:34pm
Time spent: 1 hr, 45 min., 36 sec.
Student finished 3 hr, 14 min., 24 sec. ahead of the 300 min. time limit.
Question 1 (6 points)
Economics is
Student response:
StudentRespons
e
Answer Choices
a. a hard science that studies choices as agents cope with scarcity.
b.
a social science that studies choices as agents cope with scarcity.
c. the decisions of households and firms aggregated across the economy.
d.
the decisions of individual households and firms.
e. the study of the global financial market.
Score: 6 / 6
Question 2 (6 points)
Each of the following is a factor of production except
Student response:
StudentResponse
Answer Choices
a. entrepreneurial ability.
b. a farmer.
c. water.
d. the government.
e. machinery in a factory.
Score: 0 / 6
Question 3 (6 points)
"Inflation is currently 4 percent in the United States." This statement is an example of
Student response:
StudentResponse
Answer Choices
a. microeconomics.
b. macroeconomics.
c. the fallacy of composition.
d. a positive statement.
e. a normative statement.
Score: 6 / 6
Question 4 (6 points)
A production possibilities curve shows that more of one type of good can be produced only by
Student response:
StudentRespons
e
Answer Choices
a. increasing the quantity of other types of goods that are produced.
b.
increasing the quantity of both types of goods that are produced.
c. decreasing employment.
d.
government intervention.
e. decreasing the quantity of other types of goods that are produced.
Score: 6 / 6
Question 5 (6 points)
The opportunity cost of studying for economics tonight at the library may not include
Student response:
StudentRespons
e
Answer Choices
a. the good time you could be having by going out with your friends.
b.
time that you could be spending studying for your history class.
c. lost sleep.
d.
time you could be spending listening to music or watching television.
e. the higher grade you might earn on the next economics test.
Score: 6 / 6
Question 6 (6 points)
What accounts for specialization?
Student response:
StudentRespons
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Answer Choices
a. People specialize where opportunity costs are at a maximum.
b.
People specialize where their opportunity costs are lowest.
c. People do not specialize.
d.
People specialize in the activity that pays the highest wage.
e. People specialize in the activity that they enjoy the most, no matter what the salary is.
Score: 0 / 6
Question 7 (6 points)
In a market-based economy, society's scarce resources are allocated in such a way as to
Student response:
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Answer Choices
a. guarantee that all members of society are treated fairly.
b.
assure that all members of society always get what they want.
c. provide incentives for quantities of scarce goods to increase.
d.
make certain that all members of society always get what they need.
e. guarantee that there will never be any shortages of any good or service.
Score: 6 / 6
Question 8 (6 points)
Barter requires a double coincidence of wants. This means that
Student response:
StudentRespons
e
Answer Choices
a. individual A and individual B both want the same commodity.
b.
individual A and individual B both want money.
c. if individuals A and B are to exchange a commodity, A must want what B has and B must want what B has.
d.
if individuals A and B are to exchange a commodity, B must want what B has and A must want what A has.
e. if individuals A and B are to exchange a commodity, A must want what B has and B must want what A has.
Score: 6 / 6
Question 9 (6 points)
According to the law of demand, if the price of movie rentals decreased, ceteris paribus,
Student response:
StudentRespons
e
Answer Choices
a. the demand for movie rentals would increase.
b.
the quantity demanded of movie rentals would decrease.
c. the quantity demanded of movie rentals would increase.
d.
the demand for movie rentals would decrease.
e. the quantity demanded of movie rentals would not change.
Score: 6 / 6
Question 10 (6 points)
Which of the following will not cause an outward shift in the demand curve for steaks at the supermarket?
Student response:
StudentRespons
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Answer Choices
a. A report by the American Medical Association concluding that the consumption of a 4-ounce steak at least three times a week reduces the risk of cardiovascular disease.
b.
A doubling of the price of chicken
c. The price of steaks is cut in half.
d.
A doubling of income levels
e. The expectation that the price of steaks will double within two months
Score: 0 / 6
Question 11 (6 points)
According to the law of supply, if the price of electric ranges increased, everything else held constant,
Student response:
StudentRespons
e
Answer Choices
a. the supply of electric ranges would decrease.
b.
the demand for gas ranges would decrease.
c. the demand for electric ranges would increase.
d.
the supply of dishwashers would increase.
e. the quantity supplied of electric ranges would increase.
Score: 0 / 6
Question 12 (6 points)
When a shortage exists in a market,
Student response:
StudentRespons
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Answer Choices
a. the actual price is lower than the equilibrium price.
b.
there is an excess quantity supplied.
c. consumers increase the quantities they are willing and able to purchase.
d.
suppliers will quit producing until the shortage disappears.
e. the actual price is greater than the
equilibrium price.
Score: 6 / 6
Question 13 (6 points)
The interaction of demand and supply determines the price and quantity in that market.
Student response:
StudentResponse
Answer Choices
a. True.
b. False.
Score: 6 / 6
Question 14 (6 points)
In economics, the invisible hand is not
Student response:
StudentRespons
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Answer Choices
a. the self-interest that drives firms to provide what consumers want to buy.
b.
what leads consumers to use their limited incomes to buy the goods and services that give them the most satisfaction.
c. what induces resource owners to supply resource services where they are most highly valued.
d.
a term attributed to Adam Smith.
e. government intervention in the economy.
Score: 6 / 6
Question 15 (6 points)
The circular flow model
Student response:
StudentRespons
e
Answer Choices
a. explains the effect of government imposed price controls.
b.
demonstrates the relationship between agents, markets, and flows.
c. focuses on economic policy.
d.
illustrates the consequences of minimum-wage legislation.
e. ignores the role of international trade.
Score: 6 / 6
Question 16 (6 points)
When Ford Motor Company buys door locks to put on the vehicles it produces, the door locks are considered
Student response:
StudentRespons
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Answer Choices
a. a final good.
b.
an intermediate good.
c. a resale good.
d.
an underground economy good.
e. a good that provides no value in the production process.
Score: 6 / 6
Question 17 (6 points)
GDP does not include
Student response:
StudentRespons
e
Answer Choices
a. the resale of used textbooks.
b.
the purchase of a new Porsche.
c. the sale of meat at the local grocery store.
d.
the government purchase of an F-14 fighter plane.
e. the salary paid to a company CEO.
Score: 6 / 6
Question 18 (6 points)
Gross domestic product is the sum total of
Student response:
StudentRespons
e
Answer Choices
a. consumption spending, investment spending, government purchases, and net exports.
b.
the value of output produced at all stages of production, including intermediate goods.
c. consumption spending, saving, investment, and net exports.
d.
consumption spending, saving, investment, government spending, taxes, and net exports.
e. the value of all monetary transactions in the economy.
Score: 6 / 6
Question 19 (6 points)
Real GDP is calculated in constant dollars.
Student response:
StudentResponse
Answer Choices
a. True.
b. False.
Score: 6 / 6
Question 20 (6 points)
Real GDP measures
Student response:
StudentRespons
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Answer Choices
a. personal income adjusted for taxes paid to the government.
b.
national output adjusted for changes in the quality of products.
c. national output adjusted for price level changes.
d.
nominal output adjusted for changes in national income because of economic booms.
e. national output adjusted for unemployment.
Score: 6 / 6
Question 21 (6 points)
The foreign exchange market
Student response:
StudentRespons
e
Answer Choices
a. is located at the New York Stock Exchange.
b.
depends on the actual movement of currency.
c. is based exclusively on the exchange of bank notes.
d.
is a global market in which foreign-currency-denominated deposits
are traded.
e. is a currency exchange system limited to tourism and illegal transactions.
Score: 6 / 6
Question 22 (6 points)
The four phases of a business cycle are peak, recession, trough, expansion.
Student response:
StudentResponse
Answer Choices
a. True.
b. False.
Score: 6 / 6
Question 23 (6 points)
The Labor Force consists of
Student response:
StudentRespons
e
Answer Choices
a. Underemployed workers.
b.
Retired citizens.
c. the number of employed plus the number of unemployed in the economy.
d.
The underground economy.
e. Those who have given up looking for work.
Score: 6 / 6
Question 24 (6 points)
To be considered unemployed a person must
Student response:
StudentRespons
e
Answer Choices
a. be a volunteer at a non-profit organization.
b.
be working at the time.
c. not be working currently, but is actively seeking employment.
d.
have given looking for work.
e. be in the unpaid labor force.
Score: 6 / 6
Question 25 (6 points)
The natural rate of unemployment ranges between 4% to 6% and includes only the sum of frictional and structural unemployment in an economy.
Student response:
StudentResponse
Answer Choices
a. True.
b. False.
Score: 0 / 6
Question 26 (6 points)
A person who loses their job as a Christmas present wrapper after the Christmas season ends is an example of
Student response:
StudentResponse
Answer Choices
a. seasonal unemployment.
b. a discouraged worker.
c. a disgruntled worker.
d. a cyclically unemployed worker.
e. an underemployed worker.
Score: 6 / 6
Question 27 (6 points)
Ford Motor Company workers in a Michigan plant that are laid off due to a reduction in aggregate demand in the economy are considered
Student response:
StudentResponse
Answer Choices
a. discouraged workers.
b. seasonal workers.
c. frictionally unemployed.
d. structurally unemployed.
e. cyclically unemployed.
Score: 6 / 6
Question 28 (6 points)
US Copper mining and smelting workers that are laid off when the company moves its production South across the border to Mexico are considered
Student response:
StudentResponse
Answer Choices
a. discouraged workers.
b. seasonal workers.
c. frictionally unemployed.
d. structurally unemployed.
e. cyclically unemployed.
Score: 6 / 6
Question 29 (6 points)
During periods of inflation,
Student response:
StudentRespons
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Answer Choices
a. everyone's real income falls.
b.
those people who have fixed incomes benefit.
c. those people whose real income rises faster than the general price level benefit.
d.
those people who enter long term wage agreements benefit.
e. those people who hold a lot of cash benefit.
Score: 0 / 6
Question 30 (6 points)
Cost-push inflation results when the economy experiences a decrease in the availability of supply and/or the increase in the price of a resource that is significant in the production process.
Student response:
StudentResponse
Answer Choices
a. True.
b. False.
Score: 6 / 6
Question 31 (6 points)
The OPEC oil embargo of the US in the 1970s resulted in
Student response:
StudentRespons
e
Answer Choices
a. a shift outward of the PPF curve.
b.
a shift outward of the Aggregate Demand (AD) curve.
c. a shift outward of the Aggregate Supply (AS) curve.
d.
Demand-pull inflation.
e. Cost-push inflation.
Score: 6 / 6
Question 32 (6 points)
Other things equal, a natural disaster that decreases the value of assets owned by a household will lead to
Student response:
StudentRespons
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Answer Choices
a. a decrease in aggregate production.
b.
a decrease in aggregate demand.
c. an increase in international trade.
d.
an increase in aggregate expenditures.
e. a movement down along the aggregate demand curve.
Score: 6 / 6
Question 33 (6 points)
Because demand-pull inflation is caused by an increase in the demand for output, in general, most economists say that this type of inflation is actually good for an economy because it reflects a growth and expansion in the economy.
Student response:
StudentResponse
Answer Choices
a. True.
b. False.
Score: 6 / 6
Question 34 (6 points)
Which of the following occurs when the price level falls?
Student response:
StudentRespons
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Answer Choices
a. The purchasing power of money increases.
b.
The purchasing power of money remains the same.
c. The purchasing power of money falls.
d.
All of the above are correct.
e. None of the above are correct.
Score: 6 / 6
Question 35 (6 points)
Optimistic consumer expectations about the economy can be illustrated by
Student response:
StudentRespons
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Answer Choices
a. a movement to the right along the aggregate demand curve.
b.
a rightward shift of the aggregate demand curve.
c. a leftward shift of the aggregate demand curve.
d.
a movement to the left along the aggregate demand curve.
e. a flatter slope of the aggregate demand curve.
Score: 0 / 6
Question 36 (6 points)
The consumption function illustrates that
Student response:
StudentRespons
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Answer Choices
a. saving increases as disposable income decreases.
b.
consumption increases as saving increases.
c. consumption increases as disposable income increases.
d.
consumption increases as disposable income decreases.
e. consumption increases as investment increases.
Score: 6 / 6
Question 37 (6 points)
The marginal propensity to save equals
Student response:
StudentRespons
e
Answer Choices
a. the change in disposable income divided by the change in saving.
b.
the change in saving minus the change in disposable income.
c. saving divided by disposable income.
d.
1 minus the marginal propensity to consume.
e. 1 plus the marginal propensity to consume.
Score: 0 / 6
Question 38 (6 points)
The multiplier effect means that a given change in autonomous expenditures
Student response:
StudentRespons
e
Answer Choices
a. will change equilibrium income by an amount greater than the initial change in autonomous expenditures.
b.
will change equilibrium by an amount less than the initial change in autonomous expenditures.
c. will change equilibrium income by an amount equal to the initial change in autonomous expenditures.
d.
will change the MPC by a multiple of the initial change in autonomous expenditures.
e. will change the MPS by a multiple of the initial change in autonomous expenditures.
Score: 6 / 6
Question 39 (6 points)
Fiscal policy refers to
Student response:
StudentRespons
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Answer Choices
a. the use of fines to penalize unfair business practices.
b.
the purchase and sale of U.S. government securities to regulate the money supply.
c. the adjustment of the GDP for inflation.
d.
a policy action by Congress to overrule unpopular budget cuts by the president.
e. the use of government spending and taxation to influence the level of economic growth and inflation.
Score: 6 / 6
Question 40 (6 points)
If the government wants to redirect the economy onto an expansionary path by imposing expansionary policy to close a GDP gap, it should
Student response:
StudentRespons
e
Answer Choices
a. raise government spending, thereby shifting the aggregate demand curve to the left.
b.
lower taxes, thereby shifting the aggregate demand curve to the right.
c. lower government spending, thereby shifting the aggregate supply curve to the left.
d.
raise taxes, thereby shifting the aggregate supply curve to the right.
e. raise both government spending and taxes by the same amount, thereby shifting the aggregate demand curve to the left.
Score: 6 / 6
Question 41 (6 points)
Which of the following is the most liquid asset in the U.S. economy?
Student response:
StudentResponse
Answer Choices
a. U.S. Treasury bonds.
b. Savings accounts.
c. Demand deposits.
d. U.S. currency.
e. Travelers' checks.
Score: 6 / 6
Question 42 (6 points)
The money on the Island of Yap
Student response:
StudentRespons
e
Answer Choices
a. has its value based upon the stone's history.
b.
are large, round, limestone stones from other islands.
c. becomes more valuable as stones are destroyed or leave the island to become part of museum exhibits.
d.
experienced inflation when the Irish sailor, David O'Keefe helped the Yapese to obtain stones using more efficient techniques increasing the money supply rapidly.
e. All of the above are correct.
Score: 6 / 6
Question 43 (6 points)
M2 includes all the following except
Student response:
StudentResponse
Answer Choices
a. demand deposits.
b. U.S. government securities.
c. savings deposits.
d. money market deposits.
e. certificates of deposit.
Score: 6 / 6
Question 44 (6 points)
Which of the following is not a function of the Fed?
Student response:
StudentRespons
e
Answer Choices
a. Printing money.
b.
Making loans to banks.
c. Regulating the money supply.
d.
Providing currency.
e. Acting as a banker for the federal government.
Score: 6 / 6
Question 45 (6 points)
When the Fed buys and sells bonds to control bank reserves and the money supply it performs operations known as
Student response:
StudentResponse
Answer Choices
a. offer rate operations.
b. interest bearing operations.
c. open market operations.
d. bond yield operations.
e. government bond operations.
Score: 6 / 6
Question 46 (6 points)
Countries specialize their production and trade with other countries in accordance with
Student response:
StudentResponse
Answer Choices
a. comparative advantage.
b. absolute advantage.
c. geographic superiority.
d. political advantage.
e. transportation advantages.
Score: 6 / 6
Question 47 (6 points)
In the US, a worker can produce 4 tons of coal or 2 tons of paper. In Canada, a worker can produce 6 tons of coal or 1 ton of paper. What is the most the United States is willing to pay for 1 ton of coal?
Student response:
StudentResponse
Answer Choices
a. 1/6 ton of paper.
b. 1/2 ton of paper.
c. 4/5 ton of paper.
d. 6 tons of paper.
e. None of the above.
Score: 6 / 6
Question 48 (6 points)
According to the Leontief Paradox resolution,
Student response:
StudentRespons
e
Answer Choices
a. The US should only import goods and services.
b.
The US should export only low-skilled labor-intensive goods and services.
c. The US should export only high-skilled labor-intensive goods and services.
d.
The US should export low-skilled labor-intensive and capital-intensive goods and services.
e. The US should export high-skilled
labor-intensive and capital-intensive goods and services.
Score: 0 / 6
Question 49 (6 points)
According to the Vernon Product Cycle Theory,
Student response:
StudentRespons
e
Answer Choices
a. Outsourcing of production to less-developed economies is a natural part of a product's life cycle.
b.
Costs are less significant to the firm in the mature stage of the product's life cycle.
c. Research and development (R&D) are not significant to advanced economy firms.
d.
Standardization of the product occurs when the product is produced and consumed domestically only.
e. Products can avoid becoming obsolete.
Score: 6 / 6
Question 50 (6 points)
An example of protectionist policy is
Student response:
StudentRespons
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Answer Choices
a. The Greek governments imposing a ban on banana imports.
b.
NAFTA opening trade between Canada, US, and Mexico.
c. European Union.
d.
GATT reducing tariffs and opening trade in the global economy after WWII.
