ECON102: Macroeconomics MidTerm Review

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

Resource summary

Question 1

Question
A situation where people have to make choices based on unlimited wants and limited resources is known as
Answer
  • Factors of production
  • Macroeconomics
  • Scarcity
  • Law of Demand

Question 2

Question
Which of the following is an example of a price floor?
Answer
  • Agricultural price supports
  • Rent controls
  • Minimum wages
  • Both a and c

Question 3

Question
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?
Answer
  • Structural unemployment
  • Functional unemployment
  • Frictional unemployment
  • Cyclical unemployment

Question 4

Question
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?
Answer
  • Egg supply will increase.
  • Egg supply will decrease.
  • Egg demand will decrease.
  • The quantity of eggs demanded will increase.

Question 5

Question
Positive economics focuses on
Answer
  • 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.

Question 6

Question
The Law of Demand states that as the price of a good ____________________, the quantity demanded tends to ________________.
Answer
  • Increases....increase
  • Decreases....remain unchanged
  • Decreases....decrease
  • Increases....decrease

Question 7

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

Question 8

Question
A price floor that sets the price of a good above market equilibrium will cause
Answer
  • 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.

Question 9

Question
What is the term for the process of adjusting payments like social security benefits for changes in the price level?
Answer
  • Realization
  • Nominal adjustment
  • Indexation
  • Cyclical alignment

Question 10

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

Question 11

Question
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
Answer
  • Production Possibilities Curve
  • Supply schedule
  • Demand schedule
  • Consumer price index

Question 12

Question
The highest valued alternative that must be given up in order to choose an option is called
Answer
  • opportunity cost.
  • disutility.
  • utility.
  • scarcity.

Question 13

Question
Two products that are usually consumed jointly would be referred to as
Answer
  • unrelated goods.
  • complements.
  • substitutes.
  • inferior goods.

Question 14

Question
Farmers can produce wheat and/or corn. What will happen in the wheat market if there is an increase in price of corn?
Answer
  • Wheat supply will decrease.
  • Wheat demand will decrease.
  • Wheat supply will increase.
  • Wheat demand will increase.

Question 15

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

Question 16

Question
The type of unemployment which occurs when workers are briefly between jobs is called
Answer
  • structural unemployment.
  • frictional unemployment.
  • functional unemployment.
  • cyclical unemployment.

Question 17

Question
Economics is primarily the study of
Answer
  • 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.

Question 18

Question
Comparative advantage is when
Answer
  • 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.

Question 19

Question
If the price of Coke decreases, the demand curve for Pepsi will
Answer
  • remain unchanged.
  • shift to the right.
  • shift to the left.
  • do none of the above.

Question 20

Question
Which of the following goods are likely to be complements?
Answer
  • potato chips and pretzels.
  • Pepsi and Coke.
  • hot dogs and hot dog buns.
  • DVD players and VCRs.

Question 21

Question
The Law of Supply states that as the price ________________, the quantity supplied tends to ________________.
Answer
  • decreases....increase
  • increases....decrease
  • decreases....remain unchanged
  • increases....increase

Question 22

Question
Which of the following is a measurement of improvements in technology and organization that allow more output per unit of labor and capital inputs?
Answer
  • Real input productivity
  • Total factor productivity
  • Nominal capital productivity
  • Real labor productivity

Question 23

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

Question 24

Question
Which of the following is an example of a normative economic statement?
Answer
  • 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.

Question 25

Question
Three key economic ideas/assumptions:
Answer
  • 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.

Question 26

Question
Type of unemployment where overall demand for goods and services in an economy cannot support full employment.
Answer
  • Cyclical unemployment
  • Frictional unemployment
  • Functional unemployment
  • Structural unemployment

Question 27

Question
A price set below equilibrium will lead to a
Answer
  • shortage.
  • surplus.
  • price ceiling.
  • contraction.

Question 28

Question
A price floor that sets price above market equilibrium will cause
Answer
  • an increase in quantity demanded.
  • a decrease in quantity demanded.
  • an increase in quantity supplied.
  • a decrease in quantity supplied.
  • a surplus.
  • a shortage.

Question 29

Question
_______________ make(s) trade-offs necessary,
Answer
  • Alternatives
  • Scarcity
  • Comparative advantage
  • Normative analysis

Question 30

Question
Analysis of "what ought to be"
Answer
  • Positive analysis
  • Normative analysis

Question 31

Question
If price is set above market equilibrium, there will be a
Answer
  • shortage.
  • surplus.
  • deadweight loss.
  • comparative advantage.
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