1) Which of the following transactions would be included in GDP?

a) The purchase of a Monet painting.

b) The purchase of paper clips.

c) The purchase of Telstra shares.

d) The purchase of a used car.

2) Economics is the study of

a) the choices everybody makes to attain their goals, given their scarce resources.

b) supply and demand.

c) how to make money in a market economy.

d) how to make money in the stock market.

3) The economy is considered to be at full employment when

a) all unemployment is voluntary.

b) all unemployment is frictional or structural.

c) there are no unemployed workers.

d) there are more unemployed workers than job vacancies

4) An example of an intermediate good would be

a) a can of cool drink sold by a super‐market.

b) a microwave used at home.

c) the bread that goes into a sandwich sold by a lunch bar.

d) the petrol purchased by consumers for their cars

5) From 2004 to 2005, the CPI for medical care increased from 260.8 to 272.8. What was the inflation rate for medical care?

a) 12 percent

b) 11.1 percent

c) 4.9 percent

d) 4.6 percent

6) A shift outwards of the nation's production possibility frontier can occur from

a) a reduction in unemployment.

b) an increase in the size of the labour force.

c) a change in the amounts of one good desired.

d) a natural disaster like a hurricane or severe earthquake

7) What assumptions about humans do economists make?

a) People are greedy and selfish.

b) None, because economics takes humans as given.

c) People are rational and respond to incentives.

d) Humans prefer to live in a society that values fairness above all else.

8) The labour force is the

a) a number of people employed minus the number of people unemployed.

b) ratio of the number of people employed by the number of people unemployed.

c) ratio of the number of people employed to the working-age population.

d) the number of people employed plus the number of people unemployed.

9) The production possibility frontier shows

a) attainable combinations of two products that may be produced with available resources.

b) the various products that can be produced now and in the future.

c) what an equitable distribution of products among citizens would be.

d) the rate of substitution between capital and labour.

10) Which of the following transactions would be included in the official calculation of GDP?

a) Bridgestone sells $2 million worth of tyres to General Motors Holden

b) You illegally download music off the Internet to put on your new iPod.

c) A new iPod.

d) A student buys a used textbook at the bookstore.

11) What are the three fundamental questions that any economy must answer?

a) What will be the prices of goods, how will these goods be produced, and who gets them?

b) What will be the prices of goods, what will be produced, and who gets them?

c) What will be produced, how will these goods be produced, and who gets them?

d) How much will be saved, what will be produced, and how can these goods be fairly distributed?

12) If the nominal interest rate is 6% and the inflation rate is 2%, then the real interest rate is

a) 3%.

b) 2%.

c) 4%.

d) 8%.

14) Suppose that a very simple economy produces three goods: movies, burgers, and bikes. Suppose the quantities produced and their corresponding prices for 2004 and 2009 are shown in the following table:

	2004		2009
	Quantity	Price	Quantity	Price
Movies	20	$6	30	$7
Burgers	100	$2	90	$2.5
Bikes	3	$1000	6	$1100

What is real GDP in 2009, using 2004 as the base year?

a) $3690

b) $7035

c) $6360

d) $3320

15) If the production possibility frontier is graphed as a straight line, what does this mean?

a) Opportunity costs are constant as production shifts from one product to the other.

b) It is easy to efficiently produce output.

c) Nothing, there is no significance of a straight line production possibility frontier.

d) Opportunity costs are increasing as production shifts from one product to the other.

16) If you have both an economics exam and a management exam tomorrow, but find that you have time to fully study for only one of them, what are you facing?

a) A failing grade in both exams

b) A zero opportunity cost

c) A trade‐off

d) An impossible situation

17) Which of the following is a problem inherent in centrally planned economies?

a) Production managers do not satisfy consumer wants but the government's orders.

b) Too much production of low‐cost, high‐quality goods and services.

c) There are no problems, everyone, including consumers are satisfied.

d) None of these describe the problem inherent in a centrally planned economy.

18) Inflation is an increase in the

a) average hourly wage rate.

b) general price level in the economy.

c) the overall level of economic activity.

d) rate of growth of GDP.

19) Total production in the economy is measured as the

a) dollar value of all final goods and services produced in the economy.

b) the total number of services produced in the economy.

c) the total number of goods produced in the economy.

d) the total number of goods and services produced in the economy.

20) An increase in the price of dairy products produced domestically will be reflected in

a) Both the GDP deflator and the consumer price index.

b) Neither the GDP deflator nor the consumer price index.

c) The GDP deflator but not in the consumer price index.

d) The consumer price index but not in the GDP deflator.

21) The reason that opportunity cost arises is that

a) money has proven to be an inefficient means of facilitating exchange in a market.

b) sometimes there are no alternative decisions that can be made.

c) resources are limited at any point in time. d) people have unlimited wants.

21) You have an absolute advantage whenever you

a) are better educated than someone else.

b) can produce something at a lower opportunity cost than others.

c) can produce more of something than others with the same resources.

d) prefer to do one particular activity.

22) Which of the following is an example of a worker experiencing cyclical unemployment?

a) A Freightliner employee who was sacked because of a recession.

b) A worker who quits his job because he does not get along with his boss

c) A worker that changes jobs to move closer to her family.

d) An assembly line worker who loses his job because of automation.

23) A company named Home Depot sells new and used doors to contractors who build new homes. Home Depot also sells new and used doors to home‐owners. Which of the following would be counted in GDP?

a) The sale of a used door to a home‐owner

b) The sale of a used door to for construction for installation into a new home.

c) The sale of a new door to for construction for installation into a new home.

d) The sale of a new door to home‐owner.

24) If you buy shares, the dollar value is

a) not included in GDP.

b) included in GDP under consumer expenditure.

c) included in GDP as a business expense.

d) included in GDP under-investment.

25) During the 1930s, Australia and other industrialised countries experienced the Great Depression with a large number of workers and factories unemployed.Which of the following points on a production possibility frontier model would represent this experience?

a) A point on the frontier

b) A point inside the frontier

c) An increase in the opportunity cost of the substitution between capital and labour

d) A point outside the frontier

26) How is the decision about what goods and services will be produced made in a market economy?

a) The government decides on what will be produced.

b) Producing firms decide to produce only what the firms' owners say must be produced.

c) By consumers, firms, and government choosing which goods and services to buy.

d) What will be produced is determined by what society needs the most.

27) In the country of Shem, the CPI is calculated using a market basket consisting of 5 apples, 4 loaves of bread, 3 robes and 2 gallons of gasoline. The per‐unit prices of these goods have been as follows: Using 2002 as the base year, what was the inflation rate between 2003 and 2004?

a) 28.5 percent

b) 34.2 percent

c) 47 percent

d) It is impossible to determine without knowing the base year.

28) Given the following information, calculate the unemployment rate: Full‐time employed = 80 Part‐time employed = 25 Unemployed = 15 Discouraged workers = 5 Members of underground economy = 6 Consumer Price Index = 110

a) 18.8 per cent.

b) 12.5 per cent.

c) 16.7 per cent.

d) 25 per cent.

29) If the quantity of resources available is fixed, as more of a good is produced, the opportunity cost of producing it increases. The most probable reason for this is that

a) as more of a good is produced, the quality of technology available to produce additional units declines.

b) the price of the inputs used to produce the good will rise.

c) consumers are unwilling to pay higher prices to cover the increases in production costs.

d) resources are not equally well‐suited to producing all goods.

30) Which of the following is a normative statement?

a) The current high price of petrol is the result of strong worldwide demand.

b) The price of petrol is too high.

c) Larger vehicles always use more fuel per kilometre than smaller vehicles

d) The supply of petrol has not been able to meet the demand for petrol.

31) Transfer payments are not included in GDP because

a) they do not generate income.

b) their market value is difficult to measure.

c) they are not purchases of goods or services.

d) their value is included in government expenditure.

32) The opportunity cost of going to your economics class

a) depends on the cost of your transport getting to class.

b) is equal to the highest value of alternative use of the time.

c) is zero because there is no admission charged if you are enrolled in the class.

d) depends on the salary of the lecturer.

33) Establishing employment agencies that speeds up the process of matching unemployed workers with unfilled jobs are an attempt to lower

a) cyclical unemployment.

b) seasonal unemployment.

c) structural unemployment.

d) frictional unemployment.

34) Suppose that money GDP for 2009 was $15 000 billion and the price index was 150 and in 2010 money GDP was $17 050 billion with a price index of 155. What is the rate of economic growth?

a) 5%

b) 10%

c) 2%

d) 1%

35) An individual has a comparative advantage in activity whenever she

a) also has an absolute advantage in that activity.

b) can perform the activity at a lower opportunity cost than another person can.

c) can do everything better than everyone else can.

d) can do the activity in less time than anyone else.

36) GDP is not a perfect measure of wellbeing because

a) GDP is adjusted for increases in drug addiction.

b) GDP is not adjusted for the effects of pollution.

c) GDP is adjusted for changes in crime.

d) the value of leisure is included in GDP.

37) What does an entrepreneur do in a market economy?

a) Organise the factors of production in a working unit.

b) Stand to lose the personal funds provided.

c) Develop the vision for the firm and ensure funding for the firm.

d) An entrepreneur does all of these things.

38) An example of a transfer payment is

a) the purchase of a new government office block.

b) a teacher's pay is transferred electronically from the government to the teacher.

c) interest repayments on a loan.

d) an unemployment benefit.

39) Which of the following is a microeconomics question?

a) What will be the level of total production in the national economy?

b) How much income will be saved and how much will be spent on consumer goods?

c) What factors determine the price of computers in the market?

d) Why is the rate of unemployment rising?

40) The measure of production that values production using current prices is called

a) value-added GDP.

b) nominal GDP.

c) black economy GDP.

d) real GDP.

41) Which of the following causes the official measure of the unemployment rate to understate the true extent of joblessness?

a) People who collect unemployment benefits report themselves to be searching for a job.

b) Discouraged workers are counted as unemployed.

c) Discouraged workers are not counted as unemployed.

d) Many full-time workers really want to be part-time workers.

42) A production possibility frontier will shift inwards if

a) inefficiency in production processes arise.

b) there is an increase in the rate of unemployment.

c) productive resources are destroyed due to war.

d) all of these options are correct.

43) Structural unemployment would increase when

a) discouraged workers drop out of the workforce.

b) the economy enters a recession.

c) the number of individuals who quit their job to find another increase.

d) workers are replaced by machines and the workers do not have the skills to perform new jobs.

44) The 2005 CPI was 196 and the 1982 CPI was 96.5. If your parents put aside $1,000 for you in 1982, how much would you have needed in 2005 in order to buy what you could have bought with the $1,000 in 1982?

a) $1,834.20

b) $2,031.09

c) $2,308.89

d) None of the above is correct.

45) What is an economic model?

turquoisedeer68

in this module (in my commentary) we read about the kwakiutl indians of the pacific northwest, and the custom in which a person who suffers serious loss may "lash back" at the hardship by inflicting pain on another party. in particular we looked at the case of a chief of a tribe who lost his sister and his niece in an accident. what do you think the right thing to do is in this case? stepin and police it?, or live and let live, as they say? defend your view. how does this pertain to the central topic of this module, ethics in international business? can you draw on case studies in our text that pertain to this subject? (remember, your essay you should have at least 600 words)

module 1:This module reading opens with a bizarre anecdote regarding Paul Ceglia, the guy who sued Mark Zuckerberg, founder of Facebook, for squeezing him out of the operation. Cegliaproduced a two-page contract as part of his owndefense but careful scrutiny revealed that he had added "page one" on his own, and then doctored it to make it look real by baking it in the sun (the clothes pins which he used to hang it left marks). This is a rather blunt instance of contract fraud, and not your everyday type of story, but it does set the tone for the subject of this module--the ethical requirements of contracts and the laws which advance and support those requirements.

To start, we might note that reading and understanding contracts, even relatively minor purchase contracts, can be an arduous process. Consider the catalog for NCA&T, or consider the standard college syllabus. These documents seem to grow more comprehensive and complicated every semester. On this head, the text quotes a summary remark from a 2009 contract dispute: "An insured should not have to consult a long line of case law or law review articles and treatises to determine the coverage he or she is purchasing under an insurance policy." And yet, this is often what happens with contracts, even for relatively basic purchases, like Dish on Demand package or an Internet service.

There are a range of interesting cases in this reading but I thought we could focus on two in this commentary which touch on everyday experiences. The first is car repair. Sears auto shops generate of a lot of income for the company, almost 10% of the 19 billion that it makes overall per year. In the 1990s a series of undercover operations revealed that Sears mechanics were overcharging in 90% of brake-repair cases by an average of $223 per customer. Closer inquiry revealed that Sears had a repair incentive program in place in which mechanics were offered promotions and pay raises if they generated sufficient repair revenue. Indeed in many instances, a mechanic's baseline salary was based on fulfilling such incentives. And if mechanics failed to keep their revenue up, according to the investigation, then they were often demoted or let go. Critics have argued that this policy almost forces employees to overcharge their customers. Even worse, said one critic, is that Sears was using its 100-year-old name (which supposedly is a name that inspires consumer trust) as a marketing tool. In response to the investigationsSears retracted its mechanic incentive program, fired a few top management people, and made a public apology, mixed with some remarks of innocence, of course. Profits for the company quickly dropped however, so much so, that there was pressure to reinstate the mechanic incentive program, which the company in fact did (partially) in 1994. I think to most of us it seems like a very basic and egregious conflict of interest to instate a program such as this, where workers at a company get rewarded for shafting customers in effect, and yet many businesses flirt with this sort of thing when they pay employees on commission. There are alternative models. If you have ever bought a car at Car Max then you know that there is no percentage-based commission. Sales people get a flat fee for every car they sell, whether it costs $10,000 or $50,000. (Incidentally, the flat commission is something like $150, which any car salesperson will tell you is not very much.) The company argues that this policy discourages the kind of scams and price-manipulation that so-often happens with car sales. Should this model be enforced as a matter of public policy? What about the old injunction, "buyer beware." Should the government be allowed to step in and police the payment structure for mechanics at Sears?

On a lighter note (I guess) is the account presented on page 362 which cites a New York Postinvestigation into the length of Subway's "foot-long" sandwich. Reporters for the paper discovered that some four out of seven sub sandwiches measure only eleven inches, or slightly less. Subway's response in its defense was that the "Footlong" is just a casual name for the item and not a testament to its exact length. Now, a bunch of disgruntled long-time Subway customers and a team of lawyers have filed a class-action lawsuit on grounds of "decepetive advertising." This may sound funny but it raises interesting questions about all kinds of claims made in advertising, which amount to a form of contract. I work in Rockingham County and every day I drive past a housing development called Oak Hills Estates. I look out my car window....no oaks, no hills, and no estates, at least not by any reasonable definition of that term. Or, another case, I also drive past a coffee shop which says it offers the "best coffee in the world." Now, I don't think anyone would have a problem with the coffee shop, right?, because the claim is obvious hyperbole. But what about the housing development and what about subway? Next time you see or hear an advertisement pay attention to this sort of thing. You will find that such claims are everywhere, and if so, does that lawsuit against Subway stand a chance? I mean that It seems that if we go after Subway and hold it to a certain exact standard then a lot of other advertisements would come under fire too, if we are going to be consistent. Hard to draw a line here, no?

module 2:We live in a global society, it is often said, and certainly the world of commerce has no borders, or fewer and fewer all the time. But when dealing in trade across various cultures, it seems we need a shared set of values or standards that apply to all actors. The text operates with the presumption that we can in fact forge such standards, and perhaps you do too. But there is a school of ethical theory which believes that no such standards exist, and this school, called moral relativism, may present a serious challenge to many of the points in our Module 6 reading, so I though it would be a good idea to revisit moral relativism in a little more detail here, at the very least to see what an international code of business practices would be up against, theoretically speaking.

When we briefly studied moral relativism in Module 1 (page 15) we looked at the premise that there is no one code of values that applies to all people in all places at all times. Relativism states that there are no moral codes that apply to all people, or that morality varies from culture to culture. The basic point is this: Morally speaking I come into the world a blank slate, and I receive concepts of virtue and vice based on what my particular culture believes. My attitudes on issues like marriage, showing respect, raising children, sexuality, etc. are shaped and defined by the fact that I live in 21st century America. If had I lived some place else, like India, or at some other time, like in ancient Greece, I might have very different views of right and wrong. Morality is relative to my cultural background; hence the name relativism. Moral relativism may be contrasted with Moral Objectivism, the view that there are some codes that apply to all people, no matter when or where they happen to live. Such codes are called absolute, or objective or universal.

So, moral relativism is the view that moral or ethical statements vary from culture to culture, and are thus all equally valid, so society's opinion of âright and wrongâ is really better than any other. The basic idea is that there is no ultimate standard of good or evil, so every judgment about right and wrong is purely a product of a culture's preferences. There is no ultimate standard of morality, according to moral relativism, and no statement or position can be considered absolutely âright or wrong,â âbest or worst.â Many arguments for relativism rest on the idea that different practices equal different morals. Consider this example, devised originally by the ancient Greek historian Herodotus: Culture A burns the dead. Culture B eats the dead. Therefore right/wrong in regard to dealing with the dead is relative to what your culture says. Or, you might come from culture C, which says that the dead ought to be buried. The point is that the relativist looks at these varying practices and concludes that there must be no objective universal standard that applies to all people. And of course we can compare cultures on other issues too, like drinking or abortion or marriage, etc. The world exhibits wide diversity when it comes to all of these customs. And the relativist concludes from such diversity that there are no codes that apply to all people (no objective codes).

In response to this, the moral objectivist might ask the following question: Does diverse behavior (on the surface) really entail diverse ethical codes? Perhaps these radically different practices are just various ways of expressing the same core moral value. Culture A burns the dead. Culture B eats the dead. But even though they express themselves differently, they share the same core moral value: Show respect for the dead. As you read, keep this argument in mind. Rachels discusses this point in section 2.5 of the chapter, entitled, Why There is Less Disagreement Than It Seems.

Moral objectivists have a number of reasons for claiming that relativism is weak and even incoherent: They say for one thing that it restricts us from judging the customs of other societies. Letâs look at a concrete illustration from a book called Patterns of Culture written in the 1930s by an Anthropologist named Ruth Benedict. Benedict describes a group of native Americans from the Pacific Northwest known as the Kwakiutl. They have a custom in which hardship or grief may be dealt with by lashing out at anyone, even if that person had nothing to do with the hardship. Benedict writes,

Among the Kwakiutl it did not matter whether a relative had died in bed of disease, or by the hand of an enemy, in either case death was an affront to be wiped out by the death of another person. The fact that one had been caused to mourn was proof that one had been put upon. A chiefâs sister and her daughter had gone up to Victoria, and either because they drank bad whiskey or because their boat capsized they never came back. The chief called together his warriors, âNow I ask you, tribes, who shall wail? Shall I do it or shall another?â The spokesman answered, of course, âNot you, Chief. Let some other of the tribes.â Immediately they set up the war pole to announce their intention of wiping out the injury, and gathered a war party. They set out, and found seven men and two children asleep and killed them. âThen they felt good when they arrived at Sebaa in the evening.â

What is going on here? A man loses his sister and his niece so he randomly kills nine people who had nothing to do with it to make himself feel better. Now, if you did something nasty to me I might seek some sort of punishment for you in order to make myself feel better. That is called retributive justice, we see it in many places, most notably perhaps in the Bible (an eye for an eye), and it makes sense to a lot of people. But the Kwakiutl have something completely different going on. Itâs not like you do something nasty to me and I seek justice against you. Itâs like, you do something nasty to me and I punch the person sitting next to you. Should the Kwakiutl be allowed to practice this custom? Should someone step in and police their behavior? If you are an ethical relativist, your answer to that last question would certainly be no, for all the reasons described above.

Maybe some of you would call yourselves relativists in this particular case. Hey, itâs their culture and who am I to step in and police them, you might say. I wouldnât want them coming to Greensboro, NC and telling me what I can or cannot do, so why do I have any right to do that to them. Live and let live. But if we take this principle and apply it consistently, we may run into some very disagreeable conclusions. Forget the Kwakiutl for a moment and replace the nine innocent deaths with six million Jews. Strictly speaking, the relativist would have no grounds for saying âstopâ to Hitler than she would for saying stop to the Kwakiutl. And that position, to many, including Rachels, is deeply problematic.

Along with this critique of relativism I want to presents an argument in support of moral objectivism, the view that there are some codes that apply to all people, and the view which seems to be the basic operating position in our text. Imagine a culture in which there is no value placed on telling the truth. Letâs think that through. Imagine that this commentary that Iâve written is a complete crock, and you are going to get an F on the exam because I have been lying to you about relativism. You canât complain to my supervisors because our culture places no value on truth telling and that means I am allowed to lie to you. So, you take your F and leave campus and stop for lunch at a restaurant. You ask your server if the pasta has gluten in it because you canât eat gluten. He says it doesnât even though heâs not sure because heâs too lazy to check and he knows he wonât get in trouble because lying is permissible. So now youâve got and F and youâre in the hospital with a severe allergic reaction to your lunch. The person standing over your bed likes the idea of being a doctor even though she never went to medical school. She has lied her way into the position, with no retribution of course, and now you are being treated by someone with no credentials and you wind up dead. The end. You can see how quickly something like a disregard for truth-telling could ruin your day. the moral objectivist's point is that it is impossible to imagine such a culture. Having some regard for honesty is an objective code, he says; it is universal.

Despite this sort of defect it is important to present some positive aspects of the relativistâs outlook. Defenders say that relativism guards against the danger of assuming that our preferences are based on some absolute standard, and that is what helps us check that disdain or repugnance we might feel for those whose practices differ from our own, so we donât just assume the Callatians, or the Ancient Greeks, or the people down the street, are morally repulsive. Thus, though the theory seems to have many faults, it does offer some genuine insightâ¦it encourages tolerance and discourages arbitrary prejudice.

This commentary has strayed a bit from the immediate reading in the text, but I thought (given the very brief attention we paid to relativism in Module 1) that it would be a good idea to give more careful consideration to what the international business community is up against when it attempts to forge standards that would apply to all participants worldwide. Global trade is not going away. Isolation is bad economic policy (look at North Korea). Thus it seems the only way forward is to devise some standards of trade that apply to all of us. In conclusion, I'd like to draw attention to various cross-cultural iterations of the golden rule, listed on page 389. When we look at something like this, it seems that a unified point of view may not be so far-fetched. The question is whether the sort of consensus presented on page 389 can translate into commerce. Is that plausible?

maroonhorse371