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35 Questions on Basic Economics - Test 1 A | ECO 1000, Exams of Microeconomics

Material Type: Exam; Professor: Bartlett; Class: Basic Economics; Subject: Economics; University: University of South Florida; Term: Summer 2010;

Typology: Exams

2010/2011

Uploaded on 02/12/2011

ancastleman
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Basic Economics: Summer 2010 Name: __________________________________
Test 1A Section 002
Sue Bartlett
On your scantron, print your name legibly in the spaces provided. Bubble in your name
and U# (bubble 0 for U), then date and sign the scantron (May 28). For each question,
choose the best answer and record it on both the scantron and the test. When you’re
finished, turn in the scantron, but keep the test. Answers will be posted on our
Blackboard web site ASAP. Each question is worth 3 points.
1. Economics is the study of
a. money
b. politics
c. government
d. resource allocation
2. When you go to the movie, you have a money cost (ticket, refreshments) and a time cost.
In this situation, the implicit cost is the
a. sum of the money and time costs
b. money cost
c. time cost
d. economic cost
e. there are no implicit costs in this example
3. Objective statements describing how the world works are part of
a. positive analysis
b. normative analysis
c. both kinds of analysis
4. The mental efforts of people (like scientists) fall into which resource category?
a. land
b. labor
c. capital
d. human capital
e. entrepreneurship
5. The production possibilities curve is a model of
a. a goods market
b. a resource market
c. GDP over time
d. the limitations and opportunity costs imposed on society when resources are scarce
e. the circular flow of goods, resources, and money
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Basic Economics: Summer 2010 Name: __________________________________ Test 1A Section 002 Sue Bartlett On your scantron, print your name legibly in the spaces provided. Bubble in your name and U# (bubble 0 for U), then date and sign the scantron (May 28). For each question, choose the best answer and record it on both the scantron and the test. When you’re finished, turn in the scantron, but keep the test. Answers will be posted on our Blackboard web site ASAP. Each question is worth 3 points.

  1. Economics is the study of a. money b. politics c. government d. resource allocation
  2. When you go to the movie, you have a money cost (ticket, refreshments) and a time cost. In this situation, the implicit cost is the a. sum of the money and time costs b. money cost c. time cost d. economic cost e. there are no implicit costs in this example
  3. Objective statements describing how the world works are part of a. positive analysis b. normative analysis c. both kinds of analysis
  4. The mental efforts of people (like scientists) fall into which resource category? a. land b. labor c. capital d. human capital e. entrepreneurship
  5. The production possibilities curve is a model of a. a goods market b. a resource market c. GDP over time d. the limitations and opportunity costs imposed on society when resources are scarce e. the circular flow of goods, resources, and money
  1. In the circular flow model, the money flow that runs from the resource market to the household sector is called a. consumption b. income c. revenue d. cost of production
  2. In the business cycle, a local maximum level of actual GDP is called a(an) a. peak b. recession c. trough d. expansion
  3. Over the business cycle, inflation is most likely to be a problem when actual GDP is ____________ potential GDP. a. equal to b. less than c. greater than
  4. Which of the following terms refers to the idea that a good model is the simplest one? a. homo economicus b. ceteris paribus c. Occam’s razor d. TANSTAAFL
  5. Suppose a government employs 20,000 people, collects $100 million in tax revenue, purchases $80 million of goods and services, and has a transfer payment program that redistributes $30 million per year. This government’s budget is a. balanced b. in deficit c. in surplus
  6. In the production possibilities model, we found that opportunity cost increases as more of a good is produced. This happens because a. the price of the good increases b. technology improves as we produce more c. the quantity of available resources increases d. resources are specialized
  1. Suppose we have a production possibilities curve with wooden furniture on one axis and potatoes on the other. Which of the following events would cause the furniture intercept to shift outward but leave the potato intercept unchanged? a. Invention of a new tree saw that reduces spoilage and waste in lumber production b. New fertilizer that increases the number and size of potatoes per plant c. Improvements to our national transportation system d. Improvements in computer technology The following graph represents the market for lunch specials at a local restaurant. Use it to answer questions 18 through 21. 8 5 6 9 D S Q P 7 6
  2. When price moves from $8 to $7, resources a. enter the market b. exit the market c. stay constant
  3. How many lunches will producers want to sell at a price of $6? a. 5 d. 8 b. 6 e. 9 c. 7 20 What is the maximum price a consumer will pay for the 9th lunch? a. $2 d. $ b. $6 e. $ c. $
  4. When price is $7, there is a ___________ of __________ lunches. a. surplus, 3 b. surplus, 6 c. shortage, 6 d. shortage, 1 e. neither a shortage nor a surplus – the market is in equilibrium at a price of $
  1. Which of the following statements about demand curves is false? a. Demand curves have negative slopes. b. The slope of a demand curve represents the law of demand. c. Demand curves show the maximum price a consumer would pay for a particular unit of the good. d. Consumers have to be both able and willing to buy to be considered part of a demand curve. e. Demand curves increase by shifting to the left.
  2. Suppose sellers expect the price will be higher in the future. How would an expectation like this change the goods market? a. supply increases b. supply decreases c. demand increases d. demand decreases e. none of the above
  3. Rum runners and pina coladas are both popular tourist drinks. Suppose the market for pina coladas is in equilibrium, and then the price of rum runners increases. According to the supply and demand model, the equilibrium price of pina coladas will __________ and the equilibrium quantity will _____________. a. increase, increase b. decrease, decrease c. decrease, increase d. increase, decrease Use the following answers for questions 25 and 26. a. demand increases b. demand decreases c. quantity demanded increases d. quantity demanded decreases How do each of the following events affect the demand side of the market for peanuts?
  4. Consumer tastes and preferences increase.
  5. The price of peanuts falls
  6. When an employer hires a minority worker but pays them less than other workers, it is called a. occupational discrimination b. employment discrimination c. wage discrimination d. human capital discrimination