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Economics Final Exam [Chap. 1-2]

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Hell on Earth Economics [Teacher: Abdinova Makpal ; Final Exam + Quizzes] ▼ (Final Exam Prep) Quiz on Economics Final Exam [Chap. 1-2], created by Good Guy Beket on 27/12/2018.
Good Guy Beket
Quiz by Good Guy Beket, updated more than 1 year ago
Good Guy Beket
Created by Good Guy Beket over 5 years ago
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Resource summary

Question 1

Question
Government policies designed to promote efficiency:
Answer
  • usually do so at the expense of equality
  • tend to cause the economy to grow more slowly
  • usually don't work
  • tend to add a lot of bureaucracy to firms in the economy

Question 2

Question
All of the following can be considered a student's costs of going to college, EXCEPT
Answer
  • textbooks
  • tuition and fees
  • room and board (that cost her about the same as she was paying before entering college)
  • the student's time which can no longer be devoted to earning a salary

Question 3

Question
A plane from Los Angeles to New York is about to take off, but it still has a few seats empty. If the average cost per seat is $500, what price should the airline charge passengers in standby to fill in those remaining seats?
Answer
  • at least $1,000
  • exactly $500
  • any price that will cover the additional cost of an additional passenger to the airline
  • slightly more than $500

Question 4

Question
the federal government enacted regulation in the 1960s requiring people to wear seatbelts in their cars. All of the following resulted from this regulation, EXCEPT:
Answer
  • overall deaths due to car accidents changed very little in the United States
  • fewer deaths occurred per accident
  • less pedestrians were killed in car accidents
  • the frequency of accidents increased

Question 5

Question
when two individuals trade voluntarily:
Answer
  • one person always gains at the expense of the other
  • both persons generally gain from the exchange
  • one person generally gains at the expense of the other
  • the overall well-being of the two persons remains unchanged

Question 6

Question
In a market economy, the decisions of what and how much to produce are generally made by:
Answer
  • voters in elections
  • all producers and consumers
  • the President and Congress
  • non-governmental agencies

Question 7

Question
Even though markets do a great job in organizing economic activity, governments are needed to do all of the following EXCEPT:
Answer
  • establish and enforce property rights
  • intervene when markets fail due to externalities
  • intervene when markets fail due to market power
  • decide what and how much should be produced

Question 8

Question
Living standards in the united states have risen tremendously over the years, mainly due to:
Answer
  • increases in the productivity of labor over time
  • the efforts of labor unions
  • successive increases in the minimum wage
  • trade protection from competition from countries with low wages, such as China.

Question 9

Question
Rapid and persistent inflation occurs mainly due to:
Answer
  • high wage increases demanded by labor unions
  • greedy firms that abuse consumers with higher-than-necessary prices
  • rapid increases in the quantity of money in the economy
  • trade with other countries

Question 10

Question
A government that implements a policy designed to reduce inflation can expect unemployment to:
Answer
  • increase in the short run
  • decrease in the short run
  • increase in the long run
  • decrease in the long run

Question 11

Question
Which of the following is FALSE, regarding economics as a science?
Answer
  • Economic knowledge is obtained through the scientific method, just as in any other science.
  • It is difficult to conduct experiments in economic matters.
  • Economists pay close attention to natural experiments resulting from historical events.
  • Economic theories represent irrefutable facts.

Question 12

Question
Economists use assumptions in order to:
Answer
  • recreate real situations accurately, with all their complexity.
  • avoid dealing with issues they would rather not talk about.
  • simplify economic theories, so as to make it possible to answer economic questions.
  • make their theories more realistic.

Question 13

Question
Economic models are:
Answer
  • simplified versions of economic theories.
  • All of the other options are true.
  • created by making assumptions.
  • usually composed of diagrams and equations

Question 14

Question
All of the following are characteristics of the circular-flow model of the economy, EXCEPT:
Answer
  • the model has two markets: one for goods and services and one for factors of production.
  • the model includes two sectors: firms and households.
  • the model describes two circular flows: one for inputs and one for outputs.
  • the two flows described by the model move in opposite directions.

Question 15

Question
In the circular-flow model of the economy:
Answer
  • the economy has only two sectors: firms and households.
  • dollars in the economy are used over and over in an endless cycle.
  • firms produce and provide factors of production.
  • the government is the source of revenue for households to purchase goods and services from firms.

Question 16

Question
Which of the following is true regarding the production possibilities frontier (PPF) for the economy?
Answer
  • Any point on the PPF represents an efficient level of production.
  • Any point inside the PPF represents a combination of production that is not feasible.
  • The opportunity cost of producing one more unit of one of the goods remains the same at any point along the PPF.
  • Increases in the resources available for production will cause the PPF to shift toward the origin.

Question 17

Question
Economic growth in the economy can be portrayed in the model of the production possibilities frontier as a:
Answer
  • movement up and left along the PPF.
  • shift of the PPF away from the origin.
  • movement down and right along the PPF.
  • shift of the PPF toward the origin.

Question 18

Question
Microeconomics is the study of:
Answer
  • how governments can get the economy out of a recession.
  • economy-wide phenomena, including inflation, unemployment, and economic growth.
  • how households and firms make decisions and how they interact in markets.
  • how governments can reduce inflation.

Question 19

Question
Which of the following is an example of a normative statement?
Answer
  • Higher interest rates will cause people to borrow and invest less.
  • The government should increase spending during recessions, so that the economy recovers quickly.
  • When the price of a good increases, consumers respond by reducing the quantity of that good they want to purchase.
  • Over the past 50 years, the number of women who participate in the labor force has increased dramatically.

Question 20

Question
Economists tend to disagree with each other because:
Answer
  • different economists espouse different theories, so they believe different things are going on in the economy.
  • different economists make different assumptions to theories, leading them to different conclusions in economic matters.
  • different economists have different values and priorities in economic matters.
  • All the other options are true.

Question 21

Question
Points on the production possibilities frontier are?
Answer
  • Efficient
  • Inefficient
  • Unattainable
  • None of the above

Question 22

Question
The scientific method requires that
Answer
  • the scientist be objective.
  • the scientist use precision equipment.
  • only correct theories are tested.
  • only incorrect theories are tested.
  • the scientist use test tubes and have a clean lab.

Question 23

Question
Which of the following is most likely to produce scientific evidence about a theory?
Answer
  • A lawyer employed by Renault addressing the impact of air bags on passenger safety.
  • An economist permanently employed at a leading university analysing the impact of bank regulations on lending to small businesses.
  • An economist employed by the Trades Union Congress doing research on the impact of trade policy on workers' wages.
  • A radio talk show host collecting data from listeners on how capital markets respond to taxation.

Question 24

Question
Which of the following statements regarding the circular-flow diagram is true?
Answer
  • If Susan works for BAe Systems and receives a salary payment, the transaction takes place in the market for goods and services.
  • If BAe Systems sells a military aircraft, the transaction takes place in the market for factors of production.
  • None of these answers.
  • The factors of production are owned by households.
  • The factors of production are owned by firms.

Question 25

Question
In which of the following cases is the assumption most reasonable?
Answer
  • To address the impact of taxes on income distribution, an economist assumes that everyone earns the same income.
  • To address the impact of money growth on inflation, an economist assumes that money is strictly coins.
  • To model the benefits of trade, an economist assumes that there are two people and two goods.
  • To estimate the speed at which a beach ball falls, a physicist assumes that it falls in a vacuum.

Question 26

Question
Economic models are
Answer
  • usually made of wood and plastic.
  • built with assumptions.
  • useless if they are simple.
  • created to duplicate reality.

Question 27

Question
Which of the following is not a factor of production?
Answer
  • labour
  • land
  • money
  • capital
  • All of these answers are factors of production.

Question 28

Question
Which of the following will not shift a country's production possibilities frontier outward?
Answer
  • an advance in technology
  • an increase in the labour force
  • an increase in the capital stock
  • a reduction in unemployment

Question 29

Question
Economic growth is depicted by
Answer
  • a shift in the production possibilities frontier outward.
  • a movement from inside the curve toward the curve.
  • a shift in the production possibilities frontier inward.
  • a movement along a production possibilities frontier toward capital goods.

Question 30

Question
Refer to Exhibit 6. If the economy is operating at point C, the opportunity cost of producing an additional 15 units of bacon is
Image:
Screenshot 2 (binary/octet-stream)
Answer
  • 40 units of eggs.
  • 10 units of eggs.
  • 20 units of eggs.
  • 30 units of eggs.
  • 50 units of eggs.

Question 31

Question
Refer to Exhibit 6. If the economy were operating at point E,
Image:
Screenshot 2 (binary/octet-stream)
Answer
  • the opportunity cost of 20 additional units of eggs is 10 units of bacon.
  • the opportunity cost of 20 additional units of eggs is 20 units of bacon.
  • the opportunity cost of 20 additional units of eggs is 30 units of bacon.
  • 20 additional units of eggs can be produced with no impact on bacon production.

Question 32

Question
Refer to Exhibit 6. Point F represents
Image:
Screenshot 2 (binary/octet-stream)
Answer
  • none of these answers.
  • a combination of production that can be reached if we reduce the production of eggs by 20 units.
  • a combination of production that can be reached if there is a sufficient advance in technology.
  • a combination of production that is inefficient because there are unemployed resources.

Question 33

Question
Refer to Exhibit 6. As we move from point A to point D,
Image:
Screenshot 2 (binary/octet-stream)
Answer
  • the opportunity cost of eggs in terms of bacon falls.
  • the opportunity cost of eggs in terms of bacon rises.
  • the opportunity cost of eggs in terms of bacon is constant.
  • the economy becomes less efficient.
  • the economy becomes more efficient.

Question 34

Question
Which of the following issues is related to microeconomics?
Answer
  • the impact of oil prices on car production
  • the impact of money on inflation
  • the impact of technology on economic growth
  • the impact of the deficit on saving

Question 35

Question
Which of the following statements about microeconomics and macroeconomics is not true?
Answer
  • The study of very large industries is a topic within macroeconomics.
  • Macroeconomics is concerned with economy-wide phenomena.
  • Microeconomics is a building block for macroeconomics.
  • Microeconomics and macroeconomics cannot be entirely separated.

Question 36

Question
Which of the following statements is normative?
Answer
  • Large government deficits cause an economy to grow more slowly.
  • People work harder if the wage is higher.
  • The unemployment rate should be lower.
  • Printing too much money causes inflation.

Question 37

Question
In making which of the following statements is an economist acting more like a scientist?
Answer
  • A reduction in unemployment benefits will reduce the unemployment rate.
  • The rate of inflation should be reduced because it robs the elderly of their savings.
  • The unemployment rate should be reduced because unemployment robs individuals of their dignity.
  • The state should increase subsidies to universities because the future of our country depends on education.

Question 38

Question
Positive statements are
Answer
  • macroeconomic
  • microeconomic
  • statements of description that can be tested.
  • statements of prescription that involve value judgments.

Question 39

Question
Suppose two economists are arguing about policies that deal with unemployment. One economist says, "The government should fight unemployment because it is the greatest social evil." The other economist responds, "Nonsense! Inflation is the greatest social evil." These economists
Answer
  • really don't disagree at all. It just appears that they disagree.
  • disagree because they have different values.
  • none of these answers
  • disagree because they have different scientific judgments.

Question 40

Question
Suppose two economists are arguing about policies that deal with unemployment. One economist says, "The government could lower unemployment by one percentage point if it would just increase government spending by 50 billion dollars." The other economist responds, "Nonsense and poppycock! If the government spent an additional 50 billion dollars, it would reduce unemployment by only one tenth of one percent, and that effect would only be temporary!" These economists
Answer
  • none of these answers
  • disagree because they have different scientific judgments.
  • really don't disagree at all. It just appears that they disagree.
  • disagree because they have different values.
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