ECON 1BB3 Lecture Notes - Absolute Advantage, Bond Market, Monopolistic Competition
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How much less of one output can be produced if more of another output is produced. What combination of outputs is best. How much output can be produced from a given level of inputs. |
debt owed by one government to another government. government debt owed to citizens. government debt owed to foreigners. |
never be run since they crowd out investment in the short run. be run on a temporary basis whenever the economy is below potential output. be run on a permanent basis since they can always be financed over and over again. |
passive deficits would not exist. structural deficits would increase. structural deficits would not exist. |
surplus in that year must be $10 billion. deficit in that year decreased by $10 billion. surplus in that year increased by $10 billion. |
Reducing the age at which one is eligible to receive payments. Reducing Social Security retirement benefits. Introducing means testing. |
affected by social but not political forces. affected by political but not social forces. affected by both political and social forces. |
affect the price mechanism, but not the legal system. affect the price mechanism through scarcity. do not affect the price mechanism. |
False |
Government ownership of the means of production. Distribution according to need. Tradition determines the what, how, and for whom decisions. |
if its opportunity cost of producing corn is the same as the opportunity cost in other countries. if its opportunity cost of producing corn is lower than the opportunity cost in other countries. regardless of the opportunity cost in other countries. |
tuition paid for the year. value of the next-best activity forgone by attending college. total money outlays associated with attending college. |
the economy is beneath potential income. inflation is not fully anticipated. inflation is fully anticipated. |
The Group of Eight. EU. WTO. |
do not need to be enforced in market economies. must be established before a socialist economy can function properly. ensure an equitable distribution of income in market economies. |
False |
does not change, but debt increases. increases. does not change and neither does the debt. |
the benefit of the activity you would have chosen if you had not taken the course. the benefit you get from taking this course. the cost of the activity you would have chosen if you had not taken the course. |
avoidance of double taxation. ease of formation. greater ability to obtain funds. |
the art of economics. normative economics. it is just as easy in all of the above |
Question 1
The law of demand states that there is a direct relationship between supply and demand.
True
False
4 points
Question 2
Equilibrium is a state of balance between supply and demand.
True
False
4 points
Question 3
Goods are scarce for both rich and poor.
True
False
4 points
Question 4
"The big corporations in this country, like ExxonMobil and GM, have deep pockets and need to be hiring more people." This is a positive statement about economic policy.
True
False
4 points
Question 5
The law of supply states that there is a direct relationship between price and quantity demanded.
True
False
4 points
Question 6
In the circular flow model, firms own economic resources, and householdsbuy the manufactured products and services.
True
False
4 points
Question 7
Households play a dual role of providing the factors of production whilepurchasing the goods and services of firms.
True
False
4 points
Question 8
Opportunity cost is the lowest valued benefit that must be sacrificed asthe result of choosing an alternative.
True
False
4 points
Question 9
Scarcity denotes that our desire for a good exceeds the amount that isfreely available from nature.
True
False
4 points
Question 10
Economics is a social science concerned with satisfying man's unlimitedwants with limited resources.
True
False
4 points
Question 11
Joint output of individuals or nations will be maximized when goods areexchanged between parties in accordance with the law of"comparative advantage".
True
False
4 points
Question 12
The production possibilities frontier assumes that the level of technologyvaries when applying the model.
True
False
4 points
Question 13
Excess demand in the market will cause the price of a product to decline.
True
False
4 points
Question 14
Demand is measured on the vertical axis and supply on the horizontalaxis.
True
False
4 points
Question 15
A change in quantity demanded is a movement along the same demandcurve.
True
False
4 points
Question 16
As globalization and world trade proliferates, individual markets withincountries' economies become more competitive.
True
False
4 points
Question 17
Which growth theory compares a subsistence real wage rate to the actual real wage rate?
Classical growth theory | ||
Inflation growth theory | ||
Neoclassical growth theory | ||
New growth theory |
4 points
Question 18
Suppose the working age population in Tiny Town is 100 people. If 25 of these people are NOT in the labor force, the ________ equals ________.
unemployment rate; 25/100 Ã 100 | ||
employment rate; 25/75 Ã 100 | ||
labor force; 75 | ||
labor force; 25/100 Ã 100 |
4 points
Question 19
Suppose there is a rise in the real wage rate. As a result, the quantity of labor demanded:
increases. | ||
decreases. | ||
does not change because there is no change in the money wage rate. | ||
increases only if the price level also decreases. |
4 points
Question 20
GDP can be computed as the sum of:
all sales that have taken place in an economy over a period of time. | ||
the total expenditures of consumers and business over a period of time. | ||
the total expenditures of consumption, investment, and government expenditure on goods and services over a period of time. | ||
the total expenditures of consumption, investment, government expenditure on goods and services, and net exports over a period of time. |
4 points
Question 21
The real wage rate equals:
(100 x (money wage rate/price level) | ||
(100 x (price level/money wage rate) | ||
(money wage rate x (price level) | ||
(money wage + (number of hours worked/(price level) |
4 points
Question 22
If the CPI was 121.5 at the end of 2007 and 138.3 at the end of 2008, the inflation rate over these two years was:
10.2 percent. | ||
13.8 percent. | ||
12.2 percent. | ||
16.8 percent. |
4 points
Question 23
A movement along the production function is the result of a change in:
the quantity of labor. | ||
technology. | ||
capital. | ||
interest rates. |
4 points
Question 24
All of the following are part of fiscal policy EXCEPT:
setting tax rates. | ||
setting government spending. | ||
choosing the size of the government deficit. | ||
controlling the money supply. |
4 points
Question 25
Along a production possibilities frontier for real GDP and the quantity of leisure time, as leisure time increases, real GDP:
decreases. | ||
increases. | ||
stays the same. | ||
could increase, decrease or stay the same. |