ECO 252 - Exam 1 - Assignment Essays

question

Which of the following is a decision that economists study?

answer

-How much people work
-What people buy
-How much money people save
( all of the above )

question

Which of the following is the primary cause of inflation?

answer

An increase in the quantity of money

question

In the broadest sense, economics is the study of

answer

How society manages its scarce resources

question

The overriding reason why households and societies face many decisions is that

answer

Resources are scarce

question

What you give up to obtain an item is called your

answer

Opportunity cost

question

What term refers to the idea that society has limited resources and therefore cannot produce all the goods and services people wish to have?

answer

Scarcity

question

Government policies can change the costs and benefits that people face. Those policies have the potential to

answer

-Alter people's behavior.
-Alter people's decisions at the margin.
-Produce results that policymakers did not intend.
( All of the above )

question

Ramona decides to spend two hours taking a nap rather than attending her classes. Her opportunity cost of napping is

answer

The value of the knowledge she would have received had she attended class

question

A tax on gasoline encourages people to drive smaller, more fuel-efficient cars. Which principle of economics does this illustrate?

answer

People respond to incentives

question

Which of the following statements is correct?

answer

-Markets are usually a good way to organize economic activity.
-Rational people think at the margin.
-People respond to incentives.
( All of the above )

question

A tradeoff exists between a clean environment and a higher level of income in that

answer

Laws that reduce pollution raise costs of production and reduce incomes.

question

A direct or positive relationship exists between a country's

answer

Productivity and its standard of living.

question

A society allocates its scarce resources to various uses. These scarce resources include

answer

-Land.
-People.
-Machines.
( All of the above )

question

Large or persistent inflation is almost always caused by

answer

Excessive growth in the quantity of money

question

Fundamentally, economics deals with

answer

Scarcity

question

The business cycle is the

answer

Irregular fluctuations in economic activity

question

Efficiency means that

answer

Society is getting the maximum benefits from its scarce resources

question

An increase in the overall level of prices in an economy is referred to as

answer

Inflation

question

Economists are particularly adept at understanding that people respond to

answer

Incentives

question

Which of the following would a permanent increase in the growth rate of the money supply change permanently?

answer

Inflation

question

Refer to Figure 4-7. The movement from D a to Db could be caused by

answer

A decrease in income, assuming the good is inferior.

question

Refer to Figure 4-21. At a price of $16, there is a

answer

Surplus of 3 units

question

When we move along a given supply curve,

answer

All nonprice determinants of supply are held constant.

question

Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for Ramen noodles of a decrease in the incomes of young adults, assuming that Ramen noodles are an inferior good?

answer

Point A to Point D

question

The following table contains a monthly demand schedule for large, single-topping, carry-out pizzas. If the law of demand applies to these pizzas, then A could be

answer

question

An increase in the price of a good will

answer

Decrease in quantity demanded

question

A market demand curve shows

answer

How much of a good all buyers are willing and able to buy at each possible price

question

Refer to Figure 4-20. If price is $25, then quantity demanded and quantity supplied, respectively, are

answer

500 units and 800 units

question

When the price of a good or service changes,

answer

There is a movement along a given supply curve

question

Refer to Figure 4-18. At what price would there be an excess supply of 200 units of the good?

answer

$30

question

Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then when the price increases from $4 to $6, the market quantity supplied

answer

Increases by 10 gallons

question

Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then the market quantity supplied at a price of $8 is

answer

40 gallons

question

Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for orange juice of an announcement by the American Dental Association that orange juice erodes tooth enamel?

answer

Point C to Point B

question

Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand B to Demand A in the market for oranges in the United States?

answer

A decrease in the price of apples

question

Who gets scarce resources in a market economy?

answer

Whoever is willing and able to pay the price

question

Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand A to Demand B in the market for oranges in the United States?

answer

An announcement by the FDA that oranges prevent heart disease

question

Suppose roses are currently selling for $40 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a

answer

Surplus to exist and the market price of roses to decrease

question

Refer to Figure 4-18. At a price of $20, there would be a(n)

answer

Excess demand. The law of supply and demand predicts that the price will rise from $20 to a higher price.

question

Refer to Figure 4-24. All else equal, a decrease in the price of the grain fed to turkeys would cause a move from

answer

Y to x

question

GDP is not a perfect measure of well-being; for example,

answer

-GDP excludes the value of volunteer work.
-GDP does not address the distribution of income.
-GDP does not address environmental quality.
( All of the above )

question

In the base year, the GDP deflator is always

answer

100

question

Real GDP is the yearly production of final goods and services valued at

answer

Constant prices

question

Which of the following is not a question addressed by macroeconomists?

answer

What is the impact of foreign competition on the U.S. auto industry?

question

Which of the following is included in GDP?

answer

Both the market value of rental housing services and the market value of owner-occupied housing services

question

Which of the following is included in the investment component of GDP?

answer

-Households' purchases of newly constructed homes
-Net additions to firms' inventories
-Firms' purchases of capital equipment
( All of the above )

question

If an economy's GDP falls, then it must be the case that the economy's

answer

Income and market value of all production both fall

question

Which of the following is correct?

answer

Nominal GDP equals real GDP in the base year

question

Susan switches from going to Speedy Lube for an oil change to changing the oil in her car herself. Which of the following is correct? The value of changing the oil is

answer

Included in GDP if Susan pays Speedy Lube to change it but not if she changes it herself.

question

A country's real GDP rose from $500 to $530 while its nominal GDP rose from $600 to $700. What was this country's inflation rate?

answer

10.0%

question

The consumption component of GDP includes spending on

answer

Durable goods, nondurable goods, and services

question

When economists talk about growth in the economy, they measure that growth as the

answer

Percentage change in real GDP from one period to another.

question

A dairy buys $50,000 worth of milk and spend $5,000 on cartons and utilities. It sells the cartons of milk to a grocery store for $60,000 that then sells all of the cartons to consumers for $65,000. How much do these actions add to GDP?

answer

$65,000

question

If an economy's GDP rises, then it must be the case that the economy's

answer

Income and expenditure both rise.

question

Nominal GDP will definitely increase when

answer

Prices increase and output increases.

question

Net exports equal

answer

Y - (C + I + G)

question

Much of macroeconomics attempts to explain

answer

Long-run growth and short-run fluctuations in real GDP.

question

Refer to Table 23-4. What was the growth rate of real GDP for 1931?

answer

-6.49%. Real GDP is a better gauge of economic well-being than nominal GDP.

question

A recession has traditionally been defined as a period during which

answer

Real GDP declines for two consecutive quarters.

question

Changes in the GDP deflator reflect

answer

Only changes in prices

question

Refer to Table 24-5. The cost of the basket

answer

Increased from 2004 to 2005 and increased from 2005 to 2006.

question

The price index was 136 in one year and 142 in the next year. What was the inflation rate between the two years?

answer

4.41 percent

question

The price index was 128 in 2013, and the inflation rate was 24 percent between 2012 and 2013. The price index in 2012 was

answer

103.2

question

If the consumer price index was 100 in the base year and 106 in the following year, then the inflation rate was

answer

6 percent

question

Which of the following changes in the price index produces the greatest rate of inflation: 100 to 110, 150 to 165, or 180 to 198?

answer

100 to 110
150 to 165
180 to 198
(All of these changes produce the same rate of inflation )

question

Suppose that over the past year, the real interest rate was 3 percent, the CPI was 126.2 at the beginning of the year, and the CPI was 129.5 at the end of the year. It follows that

answer

The dollar value of savings increased at 5.6 percent, and the purchasing power of savings increased at 3 percent.

question

Economists use the term inflation to describe a situation in which

answer

The economy's overall price level is rising.

question

Suppose a basket of goods and services has been selected to calculate the CPI and 2014 has been selected as the base year. In 2013, the basket's cost was $80; in 2014, the basket's cost was $86; and in 2015, the basket's cost was $90. The value of the CPI in 2015 was

answer

104.6 and the inflation rate was 4.6%

question

The economy's inflation rate is the

answer

Percentage change in the price level from the previous period.

question

The consumer price index is used to

answer

Monitor changes in the cost of living over time

question

The CPI was 96 in 1982, and the CPI was 230 in 2012. How much money would you have needed in 2012 in order to buy what you could have bought with $500 in 1982?

answer

$1,197.92

question

If the consumer price index changes from 125 in September to 150 in October, what is the rate of inflation?

answer

20.0%

question

Refer to Table 24-1. What belongs in space E?

answer

3.9%

question

Suppose a basket of goods and services has been selected to calculate the CPI and 2014 has been selected as the base year. In 2012, the basket's cost was $50; in 2014, the basket's cost was $52; and in 2016, the basket's cost was $58. The value of the CPI in 2016 was

answer

111.5

question

If the CPI was 125 this year and 120 last year, then

answer

-The cost of the CPI basket of goods and services increased by 4.2 percent this year.
-The price level increased by 4.2 percent this year.
-The inflation rate for this year was 4.2 percent.
( All of the above )

question

The CPI is a measure of the overall cost of

answer

The goods and services purchased by a typical consumer.

question

The CPI is more commonly used as a gauge of inflation than the GDP deflator is because

answer

The CPI better reflects the goods and services bought by consumers.

question

Suppose a basket of goods and services has been selected to calculate the CPI and 2012 has been selected as the base year. In 2012, the basket's cost was $50; in 2014, the basket's cost was $51; and in 2016, the basket's cost was $52. The value of the CPI in 2014 was

answer

102.0

question

In an imaginary economy, consumers buy only hot dogs and hamburgers. The fixed basket consists of 10 hot dogs and 6 hamburgers. A hot dog cost $3 in 2006 and $5.40 in 2007. A hamburger cost $5 in 2006 and $6 in 2007. Which of the following statements is correct?

answer

When 2007 is chosen as the base year, the inflation rate is 50 percent in 2007

question

Suppose a basket of goods and services has been selected to calculate the CPI and 2012 has been selected as the base year. In 2012, the basket's cost was $50; in 2014, the basket's cost was $52; and in 2016, the basket's cost was $55. The value of the CPI in 2016 was

answer

110.0

1 of 79

question

Which of the following is a decision that economists study?

answer

-How much people work
-What people buy
-How much money people save
( all of the above )

question

Which of the following is the primary cause of inflation?

answer

An increase in the quantity of money

question

In the broadest sense, economics is the study of

answer

How society manages its scarce resources

question

The overriding reason why households and societies face many decisions is that

answer

Resources are scarce

question

What you give up to obtain an item is called your

answer

Opportunity cost

question

What term refers to the idea that society has limited resources and therefore cannot produce all the goods and services people wish to have?

answer

Scarcity

question

Government policies can change the costs and benefits that people face. Those policies have the potential to

answer

-Alter people's behavior.
-Alter people's decisions at the margin.
-Produce results that policymakers did not intend.
( All of the above )

question

Ramona decides to spend two hours taking a nap rather than attending her classes. Her opportunity cost of napping is

answer

The value of the knowledge she would have received had she attended class

question

A tax on gasoline encourages people to drive smaller, more fuel-efficient cars. Which principle of economics does this illustrate?

answer

People respond to incentives

question

Which of the following statements is correct?

answer

-Markets are usually a good way to organize economic activity.
-Rational people think at the margin.
-People respond to incentives.
( All of the above )

question

A tradeoff exists between a clean environment and a higher level of income in that

answer

Laws that reduce pollution raise costs of production and reduce incomes.

question

A direct or positive relationship exists between a country's

answer

Productivity and its standard of living.

question

A society allocates its scarce resources to various uses. These scarce resources include

answer

-Land.
-People.
-Machines.
( All of the above )

question

Large or persistent inflation is almost always caused by

answer

Excessive growth in the quantity of money

question

Fundamentally, economics deals with

answer

Scarcity

question

The business cycle is the

answer

Irregular fluctuations in economic activity

question

Efficiency means that

answer

Society is getting the maximum benefits from its scarce resources

question

An increase in the overall level of prices in an economy is referred to as

answer

Inflation

question

Economists are particularly adept at understanding that people respond to

answer

Incentives

question

Which of the following would a permanent increase in the growth rate of the money supply change permanently?

answer

Inflation

question

Refer to Figure 4-7. The movement from D a to Db could be caused by

answer

A decrease in income, assuming the good is inferior.

question

Refer to Figure 4-21. At a price of $16, there is a

answer

Surplus of 3 units

question

When we move along a given supply curve,

answer

All nonprice determinants of supply are held constant.

question

answer

Point A to Point D

question

The following table contains a monthly demand schedule for large, single-topping, carry-out pizzas. If the law of demand applies to these pizzas, then A could be

answer

question

An increase in the price of a good will

answer

Decrease in quantity demanded

question

A market demand curve shows

answer

How much of a good all buyers are willing and able to buy at each possible price

question

Refer to Figure 4-20. If price is $25, then quantity demanded and quantity supplied, respectively, are

answer

500 units and 800 units

question

When the price of a good or service changes,

answer

There is a movement along a given supply curve

question

Refer to Figure 4-18. At what price would there be an excess supply of 200 units of the good?

answer

$30

question

Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then when the price increases from $4 to $6, the market quantity supplied

answer

Increases by 10 gallons

question

Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then the market quantity supplied at a price of $8 is

answer

40 gallons

question

answer

Point C to Point B

question

Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand B to Demand A in the market for oranges in the United States?

answer

A decrease in the price of apples

question

Who gets scarce resources in a market economy?

answer

Whoever is willing and able to pay the price

question

Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand A to Demand B in the market for oranges in the United States?

answer

An announcement by the FDA that oranges prevent heart disease

question

Suppose roses are currently selling for $40 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a

answer

Surplus to exist and the market price of roses to decrease

question

Refer to Figure 4-18. At a price of $20, there would be a(n)

answer

Excess demand. The law of supply and demand predicts that the price will rise from $20 to a higher price.

question

Refer to Figure 4-24. All else equal, a decrease in the price of the grain fed to turkeys would cause a move from

answer

Y to x

question

GDP is not a perfect measure of well-being; for example,

answer

-GDP excludes the value of volunteer work.
-GDP does not address the distribution of income.
-GDP does not address environmental quality.
( All of the above )

question

In the base year, the GDP deflator is always

answer

100

question

Real GDP is the yearly production of final goods and services valued at

answer

Constant prices

question

Which of the following is not a question addressed by macroeconomists?

answer

What is the impact of foreign competition on the U.S. auto industry?

question

Which of the following is included in GDP?

answer

Both the market value of rental housing services and the market value of owner-occupied housing services

question

Which of the following is included in the investment component of GDP?

answer

-Households' purchases of newly constructed homes
-Net additions to firms' inventories
-Firms' purchases of capital equipment
( All of the above )

question

If an economy's GDP falls, then it must be the case that the economy's

answer

Income and market value of all production both fall

question

Which of the following is correct?

answer

Nominal GDP equals real GDP in the base year

question

Susan switches from going to Speedy Lube for an oil change to changing the oil in her car herself. Which of the following is correct? The value of changing the oil is

answer

Included in GDP if Susan pays Speedy Lube to change it but not if she changes it herself.

question

A country's real GDP rose from $500 to $530 while its nominal GDP rose from $600 to $700. What was this country's inflation rate?

answer

10.0%

question

The consumption component of GDP includes spending on

answer

Durable goods, nondurable goods, and services

question

When economists talk about growth in the economy, they measure that growth as the

answer

Percentage change in real GDP from one period to another.

question

answer

$65,000

question

If an economy's GDP rises, then it must be the case that the economy's

answer

Income and expenditure both rise.

question

Nominal GDP will definitely increase when

answer

Prices increase and output increases.

question

Net exports equal

answer

Y - (C + I + G)

question

Much of macroeconomics attempts to explain

answer

Long-run growth and short-run fluctuations in real GDP.

question

Refer to Table 23-4. What was the growth rate of real GDP for 1931?

answer

-6.49%. Real GDP is a better gauge of economic well-being than nominal GDP.

question

A recession has traditionally been defined as a period during which

answer

Real GDP declines for two consecutive quarters.

question

Changes in the GDP deflator reflect

answer

Only changes in prices

question

Refer to Table 24-5. The cost of the basket

answer

Increased from 2004 to 2005 and increased from 2005 to 2006.

question

The price index was 136 in one year and 142 in the next year. What was the inflation rate between the two years?

answer

4.41 percent

question

The price index was 128 in 2013, and the inflation rate was 24 percent between 2012 and 2013. The price index in 2012 was

answer

103.2

question

If the consumer price index was 100 in the base year and 106 in the following year, then the inflation rate was

answer

6 percent

question

Which of the following changes in the price index produces the greatest rate of inflation: 100 to 110, 150 to 165, or 180 to 198?

answer

100 to 110
150 to 165
180 to 198
(All of these changes produce the same rate of inflation )

question

Suppose that over the past year, the real interest rate was 3 percent, the CPI was 126.2 at the beginning of the year, and the CPI was 129.5 at the end of the year. It follows that

answer

The dollar value of savings increased at 5.6 percent, and the purchasing power of savings increased at 3 percent.

question

Economists use the term inflation to describe a situation in which

answer

The economy's overall price level is rising.

question

answer

104.6 and the inflation rate was 4.6%

question

The economy's inflation rate is the

answer

Percentage change in the price level from the previous period.

question

The consumer price index is used to

answer

Monitor changes in the cost of living over time

question

The CPI was 96 in 1982, and the CPI was 230 in 2012. How much money would you have needed in 2012 in order to buy what you could have bought with $500 in 1982?

answer

$1,197.92

question

If the consumer price index changes from 125 in September to 150 in October, what is the rate of inflation?

answer

20.0%

question

Refer to Table 24-1. What belongs in space E?

answer

3.9%

question

answer

111.5

question

If the CPI was 125 this year and 120 last year, then

answer

question

The CPI is a measure of the overall cost of

answer

The goods and services purchased by a typical consumer.

question

The CPI is more commonly used as a gauge of inflation than the GDP deflator is because

answer

The CPI better reflects the goods and services bought by consumers.

question

answer

102.0

question

answer

When 2007 is chosen as the base year, the inflation rate is 50 percent in 2007

question

Suppose a basket of goods and services has been selected to calculate the CPI and 2012 has been selected as the base year. In 2012, the basket's cost was $50; in 2014, the basket's cost was $52; and in 2016, the basket's cost was $55. The value of the CPI in 2016 was

answer

110.0

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ECO 252 – Exam 1

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