Economics Final

Question 1

True or False: The purchase of an old house contributes to Gross Domestic Product.

Answer 1

False

Question 2

True or False: M1 includes savings deposits.

Answer 2

False

Question 3

True or False: The Anti-Profiteering Board played an important economic role during WWII.

Answer 3

False

Question 4

Imperfect competition usually takes the form of

Answer 4

monopolistic competition

Question 5

True or False: Consumers expecting the market price of treadmills to decrease in the future would cause the demand curve for treadmills to shift inward.

Answer 5

True

Question 6

The price of volleyballs as a function of quantity demanded is P=9-D. The price of volleyballs as a function of quantity supplied is P=2D+4. The equilibrium price of volleyballs is

Answer 6

22/3

Question 7

The supply of money has a direct relation to the

Answer 7

price level

Question 8

The citizens of Richport purchase $180 worth of goods from firms in Poorport while the citizens of Poorport purchase $10 worth of goods from firms in Richport. Assuming no other trade occurs, the net capital outflow from Richport to Poorport is

Answer 8

$170

Question 9

True or False: The flour market most closely approximates perfect competition.

Answer 9

True

Question 10

True or False: An increase in commuter income would cause an increase in the market price of a bus ticket, assuming buses are a normal good.

Answer 10

True

Question 11

The Keynesian model predicts that a sudden, sharp increase in the price of water immediately leads to a

Answer 11

decrease in Real Gross Domestic Product

Question 12

True or False: The United States entered recovery from the depression before Germany.

Answer 12

False

Question 13

The supply curve in a market with high barriers to entry is

Answer 13

inelastic

Question 14

How frequently does the Bureau of Labor Statistics measure unemployment?

Answer 14

monthly

Question 15

The opportunity cost of quitting your job to draw caricatures is

Answer 15

your former salary

Question 16

If the Federal Reserve changes the reserve ratio from 1/10 to 1/5, the money multiplier will change from

Answer 16

10 to 5

Question 17

The slope of a perfectly elastic demand curve is

Answer 17

0

Question 18

Under ideal circumstances, entrepreneurs earn

Answer 18

positive economic profit

Question 19

In the base year, the price of the bundle used to determine the Consumer Price Index was $50. If the price of the same bundle is $150, the index has a value of

Answer 19

300

Question 20

In 1945, the Allied powers significantly surpassed the Axis powers in the production of

Answer 20

military aircraft

Question 21

Unlike positive economists, normative economists

Answer 21

evaluate preferred economic policies

Question 22

What event most contributed to the end of the war in the Pacific?

Answer 22

the founding of the Manhattan Project

Question 23

In a perfectly competitive market, firms earn

Answer 23

zero economic profit

Question 24

True or False: The Dawes Plan of 1924 included the establishment of the Bundesfinanz.

Answer 24

False

Question 25

What function did the Bretton Woods system serve?

Answer 25

determining exchange rates

Question 26

What results from an increase in investment?

Answer 26

decrease in the real interest rate

Question 27

An 8% increase in the output gap implies that the rate of natural unemployment will

Answer 27

increase by 4%

Question 28

The Boskin Commission determined that the Consumer Price Index

Answer 28

Overestimates price inflation

Question 29

Suhas, Brayden, and Karlos want to go to a football game. Suhas expects to pay $75 for a ticket while Brayden expects to pay $85 and Karlos expects to pay $100. Tickets are $80. Assuming Suhas, Brayden, and Karlos are the only consumers, which of the following values is the consumer surplus for these tickets?

Answer 29

$25

Question 30

What condition did Coase propose for the resolution of externality-induced market failure?

Answer 30

Possibility of negotiation

Question 31

Patty just graduated with a degree in city planning and is looking for a job. Patty is

Answer 31

frictionally unemployed

Question 32

Who supplies factors of production in the circular flow model?

Answer 32

households

Question 33

Keynesian economists believed WWII stimulated the American economy primarily through an increase in

Answer 33

government spending

Question 34

How does price discrimination affect market equilibrium?

Answer 34

by increasing total surplus

Question 35

True or False: perfectly competitive markets create economic inefficiency.

Answer 35

False

Question 36

In one day, Asima can produce two buckets or four cookies and Tom can produce one bucket or two cookies. Asima has an

Answer 36

absolute advantage in the production of buckets (and cookies)

Question 37

In order to run his poutine shop, Justin pays $200 for rent and $50 for equipment. Poutine ingredients cost Justin an additional $4 per serving. If Justin makes 20 servings, he has a fixed cost of

Answer 37

$250

Question 38

What event’s impact did Mein Kampf describe as “inhumanly cruel”, “shameless”, and “monstrous”?

Answer 38

The Paris Peace Conference

Question 39

True or False: A national crisis leads to an outward shift in the demand curve.

Answer 39

False

Question 40

True or False: The term “monopoly” pertains more to microeconomics than macroeconomics.

Answer 40

True

Question 41

The “date which will live in infamy” most immediately preceded

Answer 41

American entry into WWII

Question 42

The United States’ economic war on Japan took the primary form of

Answer 42

embargoes on trade

Question 43

The deadweight loss caused by a tax is illustrated graphically by a triangle bounded by the supply curve, the demand curve, and the

Answer 43

equilibrium quantity

Question 44

True or False: Imported chocolate has a larger impact on the Consumer Price Index than on the Gross Domestic Product deflator.

Answer 44

True