Memorize this and Ace the Macro Sheflin Exam

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Published on 30 Oct 2014
School
Rutgers University
Department
Economic
Course
01:220:102
Professor
Questions Needed for Macro
Tejas Joshi
Exam
Name___________________________________
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or
answers the question.
1) The most fundamental economic problem is
A)security.B) health.C) scarcity.
D the fact the United States buys more goods from foreigners than we sell
to foreigners.
2) Economists point out that scarcity confronts
A
)
the poor but not the rich. B) the rich but not the poor.
C) both the poor and the rich. D
)
neither the poor nor the rich.
3) Economics is the study of
A
)
the distribution of surplus goods to those in need.
B) affluence in a morally bankrupt world.
C) ways to reduce wants to eliminate the problem of scarcity.
D
)
the choices we make because of scarcity.
4) Which of the following is a macroeconomic topic?
A
)
why plumbers earn more than janitors
B) whether the army should buy more tanks or more rockets
C) the reasons for a rise in the price of orange juice
D
)
the reasons for the rise in average prices
5) Microeconomics focuses on all of the following EXCEPT the
A
)
effect on inflation of increasing the money supply.
B) purchasing decisions made by an individual consumer.
C) hiring decisions made by a business.
D
)
effect on cigarette sales of an increase in the tax on cigarettes.
6) Studying the determination of prices in individual markets is primarily a
concern of
A ) m acroeconomics.
B) negative economics.
C) positive economics. D
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)
microeconomics.
7) U.S. producers decide to produce more compact cars and fewer SUVs as
the price of gasoline rises. Producers are answering the ________ question.
A
)
ʺhow
manyʺ
B) ʺwhenʺ C) ʺhowʺ D
)
ʺwhatʺ
8) In a market economy, what people do in the pursuit of their self-interest
A
)
is always in conflict with the social interest.
B) usually forwards the social interest.
C) always forwards the social interest.
D
)
is usually in conflict with the social interest.
9) When a university decides to add to the football stadium instead of
adding to the baseball stadium, it faces the
A
)
ʺhowʺ tradeoff. B) ʺfor whomʺ tradeoff.
C) ʺwhatʺ tradeoff. D
)
macroeconomic question.
10) The ʺhowʺ tradeoff occurs when
A
)
the government increases income taxes paid by the rich.
B) a firm decides to produce refrigerators instead of dishwashers.
C) we answer the macroeconomic question.
D
)
a farm uses machinery to pick oranges instead of employing migrant
workers.
11) Because we face scarcity, every choice involves
A
)
the question ʺwhat.ʺ B) an opportunity cost
C) giving up something for
nothing.
D
)
money
12) Opportunity cost means the
A
)
monetary costs of an activity.
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B) accounting cost minus the marginal cost.
C) highest-valued alternative forgone.
D
)
accounting cost minus the marginal benefit.
13) Suppose you plan to take summer courses. The cost of tuition and
textbooks is $1,200, housing will cost you $400, and youʹll spend $300 on
food. If you decide not to take courses in the summer, youʹll live in your
parentsʹ house for free and spend only $100 on food. Also, if you donʹt
take courses in the summer, youʹll work full time and could earn at least
$5,000. You can still work part time while taking courses, but the most you
can earn is $1,000. What is your opportunity cost of taking courses in the
summer?
A
)
$6,900 B) $5,800 C) $1,900 D
)
$4,000
14) Suppose that you are spending two hours a day studying economics, and
your grade is 85 percent. You want a higher grade and decide to study for
an extra hour a day. As a result, your grade rises to 90 percent. Your
marginal benefit is the
A
)
higher grade that you get.
B) extra hour per day you spend on studying.
C) three hours per day you spend on studying.
D
)
5 point increase in your grade.
15) A positive statement is
A
)
valid only in the context of a model with simple assumptions.
B) about what is.
C) about what ought to be.
D
)
the result of a modelʹs normative assumptions.
16) Which of the following is an example of a positive statement?
A
)
The Federal Reserve ought to cut the interest rate.
B) We should cut back on our use of carbon-based fuels such as coal and
oil.
C) Every American should have equal access to health care.
D
)
Increasing the minimum wage results in more unemployment.
17) Statements about what ought to be are called
A
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