Quiz
Practice Econ 2
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Fragen in diesem Quiz (28)
1Investment is an important determinant of economic growth. Suppose that Congress passes an investment tax credit to encourage firms to spend more on investment. The impact of the investment tax credit would be:
- AAn increase in the quantity of loanable funds exchanged and an increase in the interest rate
- BAn increase in the quantity of loanable funds exchanged and a decrease in the interest rate
- CA decrease in the quantity of loanable funds exchanged and an increase in the interest rate
- DA decrease in the quantity of loanable funds exchanged and a decrease in the interest rate
2In the AD and SRAS model, an increase in the rate of expected inflation causes
- Athe short-run aggregate supply curve to shift down.
- Bthe short-run aggregate supply curve to shift up.
- Can upward movement along the short-run aggregate supply curve.
- Da downward movement along the short-run aggregate supply curve.
3An increase in money growth will cause output growth to increase in
- Athe short run only
- Bthe long run only
- Cthe short run and the long run
- Dneither the short run nor the long run
4Suppose a negative externality exists in a market. If transactions costs are low and parties are willing to bargain, then, according to the Coase theorem
- Aan equitable solution can be reached only if property rights are assigned to polluters and not to the victims
of pollution. - Bgovernment intervention is necessary to reach an efficient and equitable solution.
- Can efficient solution can be reached regardless of the initial assignment of property rights.
- Dan efficient solution can be reached only if property rights are assigned to the victims of pollution and not
the polluters.
- Aan equitable solution can be reached only if property rights are assigned to polluters and not to the victims
5A potential problem with expansionary monetary policy is that banks can
- Awill create deflation.
- Bbe unwilling to lend.
- Cdecide that a recession is best for the economy.
- DAll of the above
6At 8 units of production, the marginal cost is $50 per unit, and average cost is $30 per unit. If the price is $50, what is the profit of producing 8 units?
- A$160
- B$240
- C$400
- DThere is no profit
7 Mrs. Smith is operating a firm in a competitive market. The market price is $6.50. At her profit-maximizing level of output, her average total cost of production is $7.00 and her average variable cost of production is $6.00.
- A Mrs. Smith is earning a loss and should shutdown in the short run.
- B Mrs. Smith is earning a loss but should continue to operate in the short run.
- C Mrs. Smith is earning a profit since the price is above the average variable cost.
- DWithout knowing Mrs. Smith's marginal cost we cannot determine whether she should stay in business or shut down.
8If government legislation requires businesses to switch to a different method of production that generates 50% fewer greenhouse gas emissions, compliance to this policy (assuming no other changes) can be illustrated in the Solow model by _____ the aggregate production function that leads to a _____ level of real GDP per person
- Aa movement to the left on; lower
- Ba movement to the right on; higher
- Ca shift up of; higher
- Da shift down of; lower
9Which of the following counts towards GDP
- AIllegal transactions
- BUsed goods
- CLeisure time
- DIntermediate goods
- EAnything within a store's inventory
10Which of the following is not an institution?
- AHonest Government
- BCompetitive Open Markets
- CPolitical Stability
- DSecure Property Rights
- EDependable Legal System
- FFair Fiscal Policy
11Compared to private goods, the free market would ______ public goods
- Asometimes overproduce, but oftentimes under produce
- Bunder produce
- Cover produce
- Defficiently produce
12Why do some economist think that GDP my overestimate the actual level of economic activity in an economy?
- AThere is no positive adjustment for the underground economy
- BIt does not account for the distribution of income in a country
- CThere is no negative adjustment for pollution
- DThere is no positive adjustment for leisure and well-being
13Marcie quit her job as a preschool teacher, which paid an annual salary of $28,000 and became a street food vendor. She used $8,000 out of her savings account that paid a 4% interest rate to buy a street cart to sell food. In her first year of operations, she spend $10,000 on food and supplies and earned revenue of $45,000. Accounting profit: ____ Economic profit:___
- A$35,000 ; -$1,000
- B$35,000 ; $6,680
- C$28,000 ; 20,000
- D$27,000 ; $17,000
14In recent years, real GDP in China has grown
- Afaster than real GDP in the US in some years, slower than real GDP in the US in other years
- Bslower than real GDP in the US
- Cat the same rate as real GDP in the US
- Dfaster than real GDP in the US
15The economy's production function relates __________ to output
- Athe inflation rate
- Breal GDP
- Cthe unemployment rate
- Dthe factors of production
16Which of the following statements is FALSE?
- AA firm that produces 100 unites at a total cost of $500 has an average cost of $5 per unit
- BFirms will earn positive profits if price exceeds average cost
- CWhen marginal cost is below average cost, average cost is rising
- DAC= TC/Q
17Why does South Korea have a higher level of physical and human capital than NK?
1) Markets consitute much more of the primary organizations of economic activity in SK than in NK
2)Economic incentives are better in SK
3) SK has a different culture from NK- A1 only
- B1 and 2 only
- C1, 2, and 3
- D3 only
- E2 and 3 only
18Which of the following best illustrates a product sold in a perfectly competitive market?
- Aeggs
- Bjeans
- Ctelevisions
- Dsoft drinks
19Which is always true for monopolies?
- AP greater than MR
- BP less than AC
- CTR greater than TC
- DMR greater than D
20After a hurricane, the prices of many items rise. How best might the government help poor people afford to buy goods and services?
- AInstitute a wage freeze to keep the costs of production from rising too rapidly
- Bgive poor people debit cards for use in purchasing essential items, while leaving prices unregulated
- Cinstitute price controls at pre-hurricane prices
- Dset prices at zero, so consumers can buy what they need without financial distress
21the US can make 50 tons of corn or 10 tons of potatoes. Mexico can make 40 tons of corn and 5 potatoes. Assume each country specializes in the production of the good in which they have a comparative advantage. Which identifies the trade price that both countries should find acceptable?
- A5 corns for 1 potato - trade price - 8 corns for 1 potato
- B.125 potatoes for 1 corn - trade price - 5 potatoes for 1 corn
- C.125 potatoes for 1 corn - trade price- 8 potatoes for 1 corn
- D.2 potatoes for 1 corn - trade price - 8 potatoes for 1 corn
22Which of the following would not lead to a decrease in the price of a domestic automobile?
- Aan economic recession, which decreases consumer income
- Ba decrease in the wages paid to union auto workers
- Can increase in the number of domestic automakers
- Dan increase in the price of foreign-made automobiles
23If the conditions of the Coase theorem are met -__- the free market quantity of goods sold will _____.
- Awell-informed consumers and well-defined property rights; maximize social surplus
- Bwell-informed consumers and nonexistant property rights; maximize consumer and producer surplus
- Clow transaction costs and well-defined property rights; maximize social surplus
- Dlow transaction costs but nonexistant property rights; maximize consumer and producer surplus
24When a binding price ceiling is in effect, goods and services
- Aare neight necessarily supplied by their lowest-cost producer nor do they flow to their highest valued use
- Bdo not necessarily flow to their highest-valued use
- Care still allocated efficiently
- Dare not necessarily supplied by their lowest-cost producer
25A new per unit subsidy for almond production in the US increases the world supply of almonds. If almonds are inelastically demanded, what will happen to total revenues from almond production?
- AThey will change in an indeterminate direction
- BThey will rise
- CThey will fall
- DThey will remain the same
26If the elasticity of supply is 1, and the elasticity of demand is 3, then for a tax of $1 buyers will pay:
- Aan extra 75 cents, and sellers will receive 25 cents less
- Ban extra 50 cents, and sellers will receive 50 cents less
- Cnothing extra since this is the special case where demand is unit elastic
- Dan extra 25 cents and sellers will receive 75 cents less
27When the opportunity cost of a choice increases:
- Athe marginal benefits of that choice decrease
- Bindividuals are more likely to chose that same option
- Cindividuals are less likely to choose that same option
- Dthe marginal benefits of that choice increase, as well
28in the case of an external benefit, marginal private benefit is _____ marginal social benefit at all quantity of levels.
- Aincomparable to
- Bgreater than
- Cequal to
- Dless than
Informationen
- Beschreibung
- Econ 101 Quiz am Practice Econ 2, erstellt von mjheg am 05/05/2013.
- Autor
- mjheg
- Sprache
- English
- Aufrufe
- 703
- Verlauf
- Erstellt am 5 Mai 2013 · aktualisiert am 23 Feb 2017
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