Econ Leveled Exam 2: Medium Flashcards
An Inquiry into the Nature and Causes of the Wealth of Nations was published CLOSEST in time to the
American Revolution
The primary focus of economics is analyzing
choices
What is the goal of Pareto efficiency?
Ensure no resources are wasted.
The basic assumptions of economics do NOT include
A. rationality
B. externalities
C. trade-offs
D. gains from trade
E. scarcity
B. externalities
Which of the following questions would a macroeconomist ask?
A. How should an individual spend their time?
B. Should the government tax the gas industry?
C. Would a price floor harm consumer surplus?
D. What is the demand for money?
E. What is the demand for potatoes
D. What is the demand for money
(since this concerns the national economy and its aggregate demand)
A demand curve is graphically represented as a(n)
line sloping down to the right
What impact does implementing self-service gas pumps have on the gasoline market?
Supply shifts right.
In a perfectly competitive market, which of the following changes would result in an increase to equilibrium price and quantity?
a decrease in the price of a complementary good
In a scenario where a decrease in income leads to an increase in college enrollments, a college education would be considered a(n)
inferior good
What will be true of a producer with an absolute advantage in the production of both goods represented on a Production Possibility Frontier?
Their line is above and to the right of the other line at all points.
When a producer produces more of a product, they notice that the profit for each additional product goes down. This situation is an example of the law of
diminishing returns
If a supplier can influence prices in a market, it is said that they have
market power
The cost to produce one more of a good is known as the
marginal cost
A movement to the left along a demand curve is
caused by an increase in price
Which of the following goods is a collective good?
satellite radio
Shri’s bakery sells 200 loaves of bread for $3 a day, spending $250 on ingredients, and $150 on operating costs. She could make $100 working for another bakery. What is Shri’s economic profit?
$100
A group of suppliers who collude to keep prices high is known as a(n)
cartel
The most common form of imperfect competition is
monopolistic competition
A monopoly should reduce production if
MC > MR
Which of the following goods is rival?
A. national defense
B. public roads
C. websites
D. streaming services
E. satellite radio
public roads
How does the United States Environmental Protection Agency (EPA) regulate sulfur dioxide emissions?
auctioning rights to emit sulfur dioxide
Which of the following methods is NOT a way entrepreneurs earn economic profits?
A. innovating pre-existing products
B. creating new products or services
C. breaking pre-existing barriers to entry
D. establishing legal monopolies
E. investing in the stock market
investing in the stock market
When the outcome of a market does not provide a socially desirable outcome, it is known as a(n)
market failure
Which prominent tech monopoly did the 1984 Sherman Anti-Trust Act split up?
AT&T
Which of the following expenditures is not considered part of consumer spending when calculating GDP?
A. insurance
B. furniture
C. new houses
D. legal services
E. education
new houses
The time period between a peak and a trough in a business cycle is known as a(n)
recession
According to Okun’s law, if the rate of cyclical unemployment was 3%, frictional was 2%, and structural was 4%, what is the output gap?
6%
Inflation is LEAST likely to do which of the following?
A. make market prices less relevant
B. decrease the quantity of savings
C. distort relative prices
D. cause uncertainty in investment
E. reduce the value of money
C. distort relative prices
If Joey did not work nor seek work in the past month, Joey is considered to be
not in the labor force
An economy’s market basket was valued at $80 in a base year. Inflation has increased that cost to $100 in the current year. What is the CPI of the current year?
125
Between 1900 and the late 1950s, the United States
was a net exporter
By how much does the Boskin Commission say CPI overstates inflation per year?
1.3%
What rate do interest banks charge each other on loans of excess reserves?
federal funds rate
On the Federal Open Market Committee (FOMC), one member is always the president of the federal reserve bank of
New York
Who confirms appointments tot he Federal Reserve Board of Governors?
the Senate
Which of the following advantages is only available to those saving in a mutual fund?
access to professional assistance from money managers
If velocity of money and money supply remains constant, what would be the effect of an increase in the price level?
real GDP decreases
Which of the following events would lead to an increase in aggregate demand?
increased government purchases
Why are credit cards not counted as money?
Credit cards do not make the payment directly.
Which of the following stores of value is the LEAST liquid?
real estate
Both “economy” and “ecology” are derived from the Greek word for
household
Shared burdens such as atmospheric damages fall into the category of
public bads
A public good that is a smaller part of a larger public good is
nested
Which of the following countries estimated the LOWEST social cost of carbon?
Poland and Ukraine
Which location had an eruption in 1991 that suggested that atmospheric particles can change atmospheric conditions for several years?
Mt. Pinatubo, Luzon, the Philippines
Approximately what percent of GHG in the United States emissions come from agriculture?
10%
Which organization was created as a response to smog in Los Angeles?
CARB
The United States Clean Air Act Amendments of 1990 regulated the release of
sulfur dioxide
The logic for a Global Environmental Organization originates from the end of
World War II
The last round of negotiations to incorporate the General Articles on Tariffs and Trade into the World Trade Organization was the
Uruguay Round (1986-93)
