Mock Final Part 1

Question 1

1. Any economic system:

Answer 1

Addresses the questions what is produced, how it is produced, and for whom it is produced.

1. What
2. How
3. For whom

Question 2

2. The determination of prices and the behavior of individual markets are studied in _________, whereas topics such as business cycles, unemployment, and inflation are studied in ______:

Answer 2

Microeconomics, macroeconomics.

Question 3

6. In a market economy:

Answer 3

Businesses design their plans to maximize their profit and the market is relied upon to see that individual self interest is consistent with society’s interest.

Question 4

7. Households are on the:

Answer 4

Supply side of factor markets and the demand side of goods markets.

Question 5

Which of the following situations demonstrates the law of demand?

Answer 5

Movie goes react to an increase in the price of a theater ticket by seeing fewer movies per year

Question 6

10. When the wage rate paid to labor is above the equilibrium the:

Answer 6

Number of workers seeking jobs exceeds the number of jobs available.

Question 7

11. The false assumption that what is true for a part will also be true for the Whole is called:

Answer 7

Fallacy of composition

Question 8

12. Online music stores such as apples iTunes provide an alternative to buying CDs. The introduction of online music stores has shifted:

Answer 8

The demand curve of CDs to the left

Question 9

13. Assume that a country imposed a tariff on oranges (which are partly imported and partly domestically produced). The result of the tariff is:

Answer 9

The domestic consumption of imported oranges falls (because the price goes up by the amount of the tariff so the imported oranges are more expensive)

Question 10

14. “Classical economist” is often used interchangeably with which term?

Answer 10

Laissez-fairs economist

Question 11

15. The classical economists argued that:

Answer 11

If unemployment occurs, it will cure itself because wages and prices will fall.

Question 12

Technological change can result in:

Answer 12

Structural unemployment

Question 13

17. GPD is the:

Answer 13

Market value of an economy’s production of all FINAL goods and services in a one year period

Question 14

18. Suppose both nominal GPD and real GDP increase. It can be concluded that:

Answer 14

Output rose

Question 15

19. A fall in the u.s. price level will cause foreigners to:

Answer 15

Buy more U.S. goods and less of their own domestically produced goods.