Semester One Final (Economics)

Question 1

Qarth has a closed economy. In 2012, the total income of everyone in Qarth was $4 million. The Gross Domestic Product of Qarth in 2012 was

Answer 1

$4 million

Question 2

In 2000, Azeroth’s exports totaled $300 million and its imports totaled $200 million. In 2000, Azeroth had a

Answer 2

Trade surplus

Question 3

Oil-rich countries often have a high rate of economic growth thanks to their

Answer 3

Large amount of natural resources

Question 4

The price elasticity of demand for hazelnuts is 4. Demand for hazelnuts is

Answer 4

Elastic

Question 5

A good with high excludability and high rivalry of consumption is a

Answer 5

Private Good

Question 6

Which economist developed a widely used interpretation of efficiency?

Answer 6

Vilfred Pareto

Question 7

India’s economy is split into three categories: agriculture, services, and

Answer 7

Industry

Question 8

Since 1900, United States economic growth

Answer 8

Exceeded population growth

Question 9

A severe recession is a period of

Answer 9

Depression

Question 10

According to the law of demand, the demand curve for most goods should be

Answer 10

Downward sloping

Question 11

True or False: Gross Domestic Product can be calculated by summing tax revenue

Answer 11

False

Question 12

Compared to the rest of the world, India has the fifth largest reserve of

Answer 12

Coal

Question 13

Supply shocks shift the

Answer 13

Short-run aggregate supply curve

Question 14

If the reserve ratio is 1/15, the money multiplier is

Answer 14

15

Question 15

An increase in input prices for a good causes an inward shift in the

Answer 15

Supply curve for the good

Question 16

The economy went into a recession and Janie was laid off. Janie is currently looking for a job. Janie is

Answer 16

Cyclically unemployed

Question 17

The Indian government initially sought to restrict trade and foreign investment to

Answer 17

Encourage the growth of domestic industries

Question 18

The dearth of fish off the Atlantic coast is a result of

Answer 18

A tragedy of the commons

Question 19

India’s large population and slow economic growth have led to high levels of

Answer 19

Poverty

Question 20

Lobbying is a common cause of

Answer 20

Rent seeking

Question 21

Producer surplus is graphically represented by the area

Answer 21

Above the supply curve and below market price

Question 22

India’s precipitation is

Answer 22

mostly limited to the monsoon season

Question 23

Scarcity is the combination of finite resources with infinite

Answer 23

Desires

Question 24

When income increases, the demand for a

Answer 24

Normal good increases

Question 25

Economists who focus on the behavior of individual firms study

Answer 25

Microeconomics

Question 26

The "Goods and Services" tax

Answer 26

Has never been established

Question 27

In 2010, Tom's car factory ordered a new piece of equipment. In 2010, that piece of equipment was used to manufacture 200 cars. How many times is the value of that piece of equipment counted in 2010's Gross Domestic Product?

Answer 27

1

Question 28

In one day, Bill can produce 4 teapots or 6 forks. Assume his production possibility frontier is linear and is graphed so that forks are on the y-axis and teapots are on the x-axis. The slope of the production possibility frontier is

Answer 28

-3/2

Question 29

Equilibrium occurs when quantity supplied

Answer 29

Equals quantity demanded

Question 30

Which body uses open market operations, reserve requirements, and the discount rate?

Answer 30

Federal Reserve

Question 31

The Consumer Price Index for the year 2013 is found by multiplying the cost of the market basket in 2013 by 100 and then dividing the product by

Answer 31

the cost of the market basket in the base year

Question 32

In the circular flow model, which of the following entities provides land, capital, and labor?

Answer 32

Households

Question 33

The total accounting costs for a firm is the sum of

Answer 33

All fixed and variable costs

Question 34

According to Joseph Schumpeter, entrepreneurs create

Answer 34

Creative destruction

Question 35

Whose return accelerated India's independence movement?

Answer 35

Mohandas Gandhi

Question 36

The Delhi-Mumbai Industrial Corridor aims to improve Indian

Answer 36

Infrastructure

Question 37

The value of the next best choice is the

Answer 37

Opportunity Cost

Question 38

Olga and Paulita go to a museum. Olga pays $15 for a ticket, but Paulita is a student and therefore only pays $10 for a ticket. The museum has implemented

Answer 38

Price discrimination

Question 39

True or False: In a perfectly competitive market, the good varies slightly among sellers

Answer 39

False

Question 40

Economists who focus on analyzing cause and effect without value judgments study

Answer 40

Positive economics

Question 41

When a good becomes more popular

Answer 41

Both quantity demanded and the market price increase

Question 42

True or False: Lack of government intervention hurts the Indian agriculture sector

Answer 42

False

Question 43

Both taxes and monopolies produce

Answer 43

Deadweight loss

Question 44

An oligopoly occurs when there are a few

Answer 44

Sellers and many buyers

Question 45

High oil prices put stress on India's tiny reserve of

Answer 45

Foreign currency

Question 46

Price elasticity of demand is calculated by dividing percentage change in quantity demanded by the corresponding percentage change in

Answer 46

Price

Question 47

A surplus exists when

Answer 47

Quantity supplied exceeds quantity demanded

Question 48

Alan's coworker enjoys humming at work. Alan can hear this humming and finds it pleasant. The humming is a

Answer 48

Positive externality

Question 49

The slope of the long-run aggregate supply curve is

Answer 49

infinite

Question 50

M1 and M2 are both measures of

Answer 50

money