NDSU ECON 105 Test 1&2&3&4 (used for final too) Dave Englund

question

Test 1

answer

...

question

If a product has an excess of supply, we ca conclude that its price

answer

is above the equilibrium level

question

There are four job offers available to you: a job that pays $80,000; $70,000; $65,000; and $55,000. If you were to choose the $65,000 option what would your opportunity cost be?

answer

$80,000

question

A normative statement is one which

answer

Is based on value judgments

question

The demand curve shows the relationship betweem

answer

price and quantity demanded

question

Utility refers to the

answer

satisfaction which a consumer receives from a good or service

question

I told you that every economy must answer four basic questions. Which of the following is not one of them?

answer

where to produce

question

When the slope of a curve is negative, this means

answer

A decrease in the independent variable will cause an increase in the dependent variable

question

Which of the following is not one of our three economic agents

answer

salesmen

question

Quantity Total Utility Marginal Utility
1 22
2 32
3 40 (P)
4 44
5 45
What is the value of (P)?

answer

question

Which of the following is consistent with the law of demand

answer

an increase in the price of salads causes a decrease in the quantity of salads demanded.

question

Which statement best illustrates the concept of diminishing marginal utility

answer

A typical consumer will receive less extra satisfaction from consuming the fourth hamburger per week than the third hamburger per week

question

Which expression is another way of saying marginal benefit

answer

Extra benefit

question

The main difference between the short run and the long run is that

answer

in the short run, at least one input is fixed

question

The law of supply is illustrated by a supply curve that is

answer

upward sloping

question

The relationship between quantity supplied and price is ________ while the relationship between quantity demanded and price is _____

answer

direct, inverse

question

An increase in demand means that

answer

the demand curve has shifted to the right

question

The market for wooden shelves changes due to a price decrease in lumber. This change causes the following

answer

The supply curve will shift to the right

question

The market for wooden shelves changes due to a price decrease in lumber. This change causes the following

answer

Equilibrium price will fall

question

The market for wooden shelves changes due to a price decrease in lumber. This change causes the following

answer

Equilibrium quantity will rise

question

The market for Galaxy 17s changes due to a tax refund of $1,000 going to every resident of Fargo. This change causes the following:

answer

The demand curve will shift to the right

question

The market for Galaxy 17s changes due to a tax refund of $1,000 going to every resident of Fargo. This change causes the following:

answer

Equilibrium price will rise

question

The market for Galaxy 17s changes due to a tax refund of $1,000 going to every resident of Fargo. This change causes the following:

answer

Equilibrium quantity will rise

question

In class we constructed a list of concepts that you could see illustrated in the PPC. All of the following concepts made it on to the list except one. Which one?

answer

Equity

question

All of the following are variables that affect the demand for a product expect

answer

number of sellers

question

A study is conducted involving the variables, number of people attending a water park, and the high temperature for the day. Which variable is independent

answer

the high temperature for the day

question

The term economic scarcity in economics refers to the fact that

answer

no country can produce enough to satisfy everyone's wants

question

The law of supply means that if consumers want a product, it must be supplied

answer

FALSE

question

Ice cream and chocolate sauce would be examples substitute goods

answer

FALSE

question

An example of economies of scale is when farms merge, reducing their need for expensive capital equipment

answer

TRUE

question

Ceteris paribus means slopes down to the right

answer

FALSE

question

Maps are examples of abstraction

answer

TRUE

question

The law of diminishing returns is a short run concept because capital can be changed in the long run

answer

TRUE

question

Our economy determines the allocation of resources through prices and competitive markets

answer

TRUE

question

Mr. Englund tries to make this class fun and informative
(this is a legit question he put on the test)

answer

TRUE

question

EXAM 2

answer

...

question

When marginal cost is increasing

answer

total cost must be increasing

question

As output increases, average fixed costs

answer

decrease

question

Which characteristic would best be associated with perfect competition

answer

price taker

question

For a perfectly competitive firm the demand curve facing the firm will be

answer

a horizontal line on the graph

question

The law of demand

answer

tells us that demand curves slope down to the right

question

The law of diminishing returns only applies in the cases where

answer

there is at least one fixed input of production

question

Recent studies have shown that price elasticity of demand for theatrical plays at current prices is approximately .150
Plays are

answer

relatively inelastic

question

Recent studies have shown that price elasticity of demand for theatrical plays at current prices is approximately .150

If the price of plays increased by 10%

answer

Consumers would decrease their purchases by less than 10%

question

Recent studies have shown that price elasticity of demand for theatrical plays at current prices is approximately .150

To increase total revenue, theaters should:

answer

increase the price

question

The law of diminishing marginal utility means that as a typical consumer consumes units of a product (over the relevant range)

answer

Total utility increases and marginal utility decreases

question

The main differences between the short run and the long run is that

answer

In the short run, at least one variable is fixed

question

If we were to calculate Price Elasticity of Demand and derive the answer +.435, what would be the significance of answers?

answer

It is relatively inelastic

question

THERE IS A GIANT GRAPH ON THE (TFC) (TVC) (MC) ect...

answer

...

question

If we were to calculate Price Elasticity of Supply and derive the answer .812, what would be the significance of our answer?

answer

It is relatively inelastic

question

If we were to calculate Income Elasticity of Demand and derive the answer -.626, what would be the significance of our answer?

answer

This good is inferior

question

If a product has excess of supply, we can conclude that its price

answer

is above the equilibrium level

question

If the demand for product (x) is inelastic, a 4% decrease in the price of (x) will

answer

increase the quantity of (x) demanded by less than 4%

question

Cross price elasticity of demand measures how sensitive purchases of a specific product are to changes in

answer

the price of some other product

question

If we hold the supply curve constant and increase demand

answer

equilibrium price would increase

question

Which of the following changes would decrease the demand for a good?

answer

a decrease in the number of consumer

question

Milk would be an example of an inelastic good

answer

True

question

The government might impose a price ceiling on a market to protect consumers

answer

TRUE

question

If the price of a good increases, quantity supplied would increase

answer

FALSE

question

An increase in resource prices will tend to decrease supply

answer

TRUE

question

The law of diminishing returns is a short run concept because capital can be changed in the long run

answer

TRUE

question

Consumer surplus is derived by a consumer that is willing to pay a higher price than the market price for a product.

answer

TRUE

question

If you were to graph typical cost curves, the marginal cost curve would cross the average variable cost curve at the lowest point of the average variable cost curve.

answer

TRUE

question

If you were to graph typical cost curves, the marginal cost curve would cross the average fixed cost curve at the lowest point of the average fixed cost curve

answer

FALSE

question

In economics it is assumed that the primary goal of the firm is to make a profit, however large or small that amount may be.

answer

FALSE

question

EXAM 3

answer

...

question

Fictionally unemployed

answer

Vicki just graduated from college and is now looking for work. She has had three job interviews in the past month

question

Structurally unemployed

answer

Bonnie worked as an aircraft design engineer for company that produces military aircraft until she lost her job last year when the Fed government cut defense spending. She has been looking for similar work for year but no company seems interested in her aircraft design skills

question

Cyclically unemployed

answer

Damon works in a coffee shop. He was laid off six months ago as the economy weakened. He expects to return to work in several months when national economic conditions improve.

question

The Law of Demand

answer

Tells us that demand curves slope down to the right

question

Cyclical unemployment is not a problem, not something that Macro policy would attempt to fix

answer

FALSE

question

If you were to graph typical cost curves, the marginal cost curve would cross the average fixed cost curve at the lowest point of the average fixed cost curve

answer

FALSE

question

GNP (or GDP) measures both national output and national income

answer

TRUE

question

If inflation was problem in our economy, the Keynesian School would say that the government should not try to fix it (leave the economy alone)

answer

FALSE

question

A used car that is resold this year would be included in this year's GNP

answer

FALSE

question

Government transfer payments are not included in GDP but private transfer payments are

answer

FALSE

question

In class, we agreed that producing 300 million plastic novelty hats would be a good use of resources in this country.

answer

FALSE

question

Marginal cost is the change in fixed cost divided by the change in output

answer

FALSE

question

The current US population is approximately

answer

320 million

question

Which of the following is not included in the Expenditure side of calculating GDP

answer

wages

question

As output increases, average fixed costs

answer

decrease

question

Which characteristic would best be associated with perfect competition

answer

price taker

question

A business firm should produce

answer

as many units of the product as can be sold

question

If a business is earning losses at the profit maximizing quantity, it should still stay open if

answer

price > average variable cost

question

For a perfectly competitive firm the demand curve facing the firm will be

answer

a horizontal line on the graph

question

For a simple monopolist the demand curve facing the firm will be

answer

the same as the industry's demand curve

question

the AR, MR, TC, MC graph thing again!

answer

...

question

For a graph showing a perfectly competitive firm earning a loss but should stay open, at the profit maximizing quantity, the marginal cost will be

answer

greater than average variable cost

question

Are perfectly competitive firms allocatively efficient

answer

yes, because price equals marginal cost

question

Are simple monopolies allocatively efficient

answer

no, because price does not equal marginal cost

question

Marginal cost equals average total cost at 85 units, marginal revenue at 80 units, and average variable cost at 75 units. At the profit maximizing quantity average total cost is $25, average variable cost is $15, average fixed cost is $10, and the price is $20. Calculate the profit

answer

-$400

question

In the previous question would the firm stay open or shut down

answer

stay open because price > average variable cost

question

GDP in the economy at the end of 2015 was

answer

$18 trillion

question

Nominal GDP is used to compare GDP in different years (factoring for inflation)

answer

false

question

For a simple monopolist the marginal revenue curve is the same as the average revenue curve

answer

false

question

EXAM 4

answer

...

question

The current world population is approximately

answer

7 billion

question

The latest inflation statistic for the 12 months ending March, 2016 was

answer

0.9%

question

For March, the 12 month unemployment rate was

answer

5.0%

question

GDP in the economy at the end of the 2015 was

answer

$18 trillion

question

From class, as general rule of thumb, $10,000 in 1976 would be worth approximately how much from today?

answer

$60,000

question

CPI = 2002 2003 2004
179.9 184 188.9

Inflation from 2002 to 2004 was

answer

question

When consumption schedule is plotted as a straight line, the slope of that line is

answer

less than the slope of the 45 degree line

question

C = 1000 + .8Y for an individual. If this person earned $1,000 their spending would be

answer

$1,800

question

Autonomous consumption in the economy depends on the level of income in the economy

answer

FALSE

question

If the MPC in the economy = .8Y, an increase of $10,000 in consumption would add _____ to national income

answer

$50,000

question

During wartime, we tend to experience

answer

demand-pull inflation

question

Disposable income does not included

answer

taxes

question

The marginal propensity to consume for the economy does not depend on the level of income

answer

TRUE

question

The Life-Cycle Hypothesis suggests that consumers like to spend their entire tax refund from this year before the year is over

answer

FALSE

question

In the late 1970's the US experienced yearly inflation rates greater than 10% per year.

answer

TRUE

question

Demand-pull inflation often occurs during war time

answer

TRUE

question

German consumers after WWI had to pay about a trillion deutsche marks for something that would have been only one mark four years earlier

answer

TRUE

question

Inflation has occurred in the US every year since

answer

1890

question

In 1933, inflation was a problem in the US

answer

FALSE

question

The US has never dealt with galloping inflation

answer

TRUE

question

If inflation was a problem in our economy, the Neoclassical School would say that the government should not try to fix it (leave the economy alone)

answer

TRUE

question

The poorest 60% of the world's population earns ____ % of world income

answer

question

Half of the people born next year will be born in industrially advanced countries

answer

FALSE

question

The average per capita income for low-income nations is about $10,000 per year

answer

FALSE

question

All of the following are major problems in developing countries except

answer

structural unemployment

question

In Mozambique, more than half of adults cannot read

answer

TRUE

question

The paradox of thrift asserts that to increase savings in the economy, in reality, which of the following will happen (thus the paradox) except

[basically which of the answers given is correct]

answer

The MPS will increase

question

What should a little country try to do in order to be successful in its international intergration

answer

Find the way to be specialized at high levels of quality in order to find niches in the international markets

question

...

answer

...

1 of 125

question

Test 1

answer

...

question

If a product has an excess of supply, we ca conclude that its price

answer

is above the equilibrium level

question

There are four job offers available to you: a job that pays $80,000; $70,000; $65,000; and $55,000. If you were to choose the $65,000 option what would your opportunity cost be?

answer

$80,000

question

A normative statement is one which

answer

Is based on value judgments

question

The demand curve shows the relationship betweem

answer

price and quantity demanded

question

Utility refers to the

answer

satisfaction which a consumer receives from a good or service

question

I told you that every economy must answer four basic questions. Which of the following is not one of them?

answer

where to produce

question

When the slope of a curve is negative, this means

answer

A decrease in the independent variable will cause an increase in the dependent variable

question

Which of the following is not one of our three economic agents

answer

salesmen

question

Quantity Total Utility Marginal Utility
1 22
2 32
3 40 (P)
4 44
5 45
What is the value of (P)?

answer

question

Which of the following is consistent with the law of demand

answer

an increase in the price of salads causes a decrease in the quantity of salads demanded.

question

Which statement best illustrates the concept of diminishing marginal utility

answer

A typical consumer will receive less extra satisfaction from consuming the fourth hamburger per week than the third hamburger per week

question

Which expression is another way of saying marginal benefit

answer

Extra benefit

question

The main difference between the short run and the long run is that

answer

in the short run, at least one input is fixed

question

The law of supply is illustrated by a supply curve that is

answer

upward sloping

question

The relationship between quantity supplied and price is ________ while the relationship between quantity demanded and price is _____

answer

direct, inverse

question

An increase in demand means that

answer

the demand curve has shifted to the right

question

The market for wooden shelves changes due to a price decrease in lumber. This change causes the following

answer

The supply curve will shift to the right

question

The market for wooden shelves changes due to a price decrease in lumber. This change causes the following

answer

Equilibrium price will fall

question

The market for wooden shelves changes due to a price decrease in lumber. This change causes the following

answer

Equilibrium quantity will rise

question

The market for Galaxy 17s changes due to a tax refund of $1,000 going to every resident of Fargo. This change causes the following:

answer

The demand curve will shift to the right

question

The market for Galaxy 17s changes due to a tax refund of $1,000 going to every resident of Fargo. This change causes the following:

answer

Equilibrium price will rise

question

The market for Galaxy 17s changes due to a tax refund of $1,000 going to every resident of Fargo. This change causes the following:

answer

Equilibrium quantity will rise

question

In class we constructed a list of concepts that you could see illustrated in the PPC. All of the following concepts made it on to the list except one. Which one?

answer

Equity

question

All of the following are variables that affect the demand for a product expect

answer

number of sellers

question

A study is conducted involving the variables, number of people attending a water park, and the high temperature for the day. Which variable is independent

answer

the high temperature for the day

question

The term economic scarcity in economics refers to the fact that

answer

no country can produce enough to satisfy everyone's wants

question

The law of supply means that if consumers want a product, it must be supplied

answer

FALSE

question

Ice cream and chocolate sauce would be examples substitute goods

answer

FALSE

question

An example of economies of scale is when farms merge, reducing their need for expensive capital equipment

answer

TRUE

question

Ceteris paribus means slopes down to the right

answer

FALSE

question

Maps are examples of abstraction

answer

TRUE

question

The law of diminishing returns is a short run concept because capital can be changed in the long run

answer

TRUE

question

Our economy determines the allocation of resources through prices and competitive markets

answer

TRUE

question

Mr. Englund tries to make this class fun and informative
(this is a legit question he put on the test)

answer

TRUE

question

EXAM 2

answer

...

question

When marginal cost is increasing

answer

total cost must be increasing

question

As output increases, average fixed costs

answer

decrease

question

Which characteristic would best be associated with perfect competition

answer

price taker

question

For a perfectly competitive firm the demand curve facing the firm will be

answer

a horizontal line on the graph

question

The law of demand

answer

tells us that demand curves slope down to the right

question

The law of diminishing returns only applies in the cases where

answer

there is at least one fixed input of production

question

Recent studies have shown that price elasticity of demand for theatrical plays at current prices is approximately .150
Plays are

answer

relatively inelastic

question

Recent studies have shown that price elasticity of demand for theatrical plays at current prices is approximately .150

If the price of plays increased by 10%

answer

Consumers would decrease their purchases by less than 10%

question

Recent studies have shown that price elasticity of demand for theatrical plays at current prices is approximately .150

To increase total revenue, theaters should:

answer

increase the price

question

The law of diminishing marginal utility means that as a typical consumer consumes units of a product (over the relevant range)

answer

Total utility increases and marginal utility decreases

question

The main differences between the short run and the long run is that

answer

In the short run, at least one variable is fixed

question

If we were to calculate Price Elasticity of Demand and derive the answer +.435, what would be the significance of answers?

answer

It is relatively inelastic

question

THERE IS A GIANT GRAPH ON THE (TFC) (TVC) (MC) ect...

answer

...

question

If we were to calculate Price Elasticity of Supply and derive the answer .812, what would be the significance of our answer?

answer

It is relatively inelastic

question

If we were to calculate Income Elasticity of Demand and derive the answer -.626, what would be the significance of our answer?

answer

This good is inferior

question

If a product has excess of supply, we can conclude that its price

answer

is above the equilibrium level

question

If the demand for product (x) is inelastic, a 4% decrease in the price of (x) will

answer

increase the quantity of (x) demanded by less than 4%

question

Cross price elasticity of demand measures how sensitive purchases of a specific product are to changes in

answer

the price of some other product

question

If we hold the supply curve constant and increase demand

answer

equilibrium price would increase

question

Which of the following changes would decrease the demand for a good?

answer

a decrease in the number of consumer

question

Milk would be an example of an inelastic good

answer

True

question

The government might impose a price ceiling on a market to protect consumers

answer

TRUE

question

If the price of a good increases, quantity supplied would increase

answer

FALSE

question

An increase in resource prices will tend to decrease supply

answer

TRUE

question

The law of diminishing returns is a short run concept because capital can be changed in the long run

answer

TRUE

question

Consumer surplus is derived by a consumer that is willing to pay a higher price than the market price for a product.

answer

TRUE

question

If you were to graph typical cost curves, the marginal cost curve would cross the average variable cost curve at the lowest point of the average variable cost curve.

answer

TRUE

question

If you were to graph typical cost curves, the marginal cost curve would cross the average fixed cost curve at the lowest point of the average fixed cost curve

answer

FALSE

question

In economics it is assumed that the primary goal of the firm is to make a profit, however large or small that amount may be.

answer

FALSE

question

EXAM 3

answer

...

question

Fictionally unemployed

answer

Vicki just graduated from college and is now looking for work. She has had three job interviews in the past month

question

Structurally unemployed

answer

question

Cyclically unemployed

answer

Damon works in a coffee shop. He was laid off six months ago as the economy weakened. He expects to return to work in several months when national economic conditions improve.

question

The Law of Demand

answer

Tells us that demand curves slope down to the right

question

Cyclical unemployment is not a problem, not something that Macro policy would attempt to fix

answer

FALSE

question

If you were to graph typical cost curves, the marginal cost curve would cross the average fixed cost curve at the lowest point of the average fixed cost curve

answer

FALSE

question

GNP (or GDP) measures both national output and national income

answer

TRUE

question

If inflation was problem in our economy, the Keynesian School would say that the government should not try to fix it (leave the economy alone)

answer

FALSE

question

A used car that is resold this year would be included in this year's GNP

answer

FALSE

question

Government transfer payments are not included in GDP but private transfer payments are

answer

FALSE

question

In class, we agreed that producing 300 million plastic novelty hats would be a good use of resources in this country.

answer

FALSE

question

Marginal cost is the change in fixed cost divided by the change in output

answer

FALSE

question

The current US population is approximately

answer

320 million

question

Which of the following is not included in the Expenditure side of calculating GDP

answer

wages

question

As output increases, average fixed costs

answer

decrease

question

Which characteristic would best be associated with perfect competition

answer

price taker

question

A business firm should produce

answer

as many units of the product as can be sold

question

If a business is earning losses at the profit maximizing quantity, it should still stay open if

answer

price > average variable cost

question

For a perfectly competitive firm the demand curve facing the firm will be

answer

a horizontal line on the graph

question

For a simple monopolist the demand curve facing the firm will be

answer

the same as the industry's demand curve

question

the AR, MR, TC, MC graph thing again!

answer

...

question

For a graph showing a perfectly competitive firm earning a loss but should stay open, at the profit maximizing quantity, the marginal cost will be

answer

greater than average variable cost

question

Are perfectly competitive firms allocatively efficient

answer

yes, because price equals marginal cost

question

Are simple monopolies allocatively efficient

answer

no, because price does not equal marginal cost

question

answer

-$400

question

In the previous question would the firm stay open or shut down

answer

stay open because price > average variable cost

question

GDP in the economy at the end of 2015 was

answer

$18 trillion

question

Nominal GDP is used to compare GDP in different years (factoring for inflation)

answer

false

question

For a simple monopolist the marginal revenue curve is the same as the average revenue curve

answer

false

question

EXAM 4

answer

...

question

The current world population is approximately

answer

7 billion

question

The latest inflation statistic for the 12 months ending March, 2016 was

answer

0.9%

question

For March, the 12 month unemployment rate was

answer

5.0%

question

GDP in the economy at the end of the 2015 was

answer

$18 trillion

question

From class, as general rule of thumb, $10,000 in 1976 would be worth approximately how much from today?

answer

$60,000

question

CPI = 2002 2003 2004
179.9 184 188.9

Inflation from 2002 to 2004 was

answer

question

When consumption schedule is plotted as a straight line, the slope of that line is

answer

less than the slope of the 45 degree line

question

C = 1000 + .8Y for an individual. If this person earned $1,000 their spending would be

answer

$1,800

question

Autonomous consumption in the economy depends on the level of income in the economy

answer

FALSE

question

If the MPC in the economy = .8Y, an increase of $10,000 in consumption would add _____ to national income

answer

$50,000

question

During wartime, we tend to experience

answer

demand-pull inflation

question

Disposable income does not included

answer

taxes

question

The marginal propensity to consume for the economy does not depend on the level of income

answer

TRUE

question

The Life-Cycle Hypothesis suggests that consumers like to spend their entire tax refund from this year before the year is over

answer

FALSE

question

In the late 1970's the US experienced yearly inflation rates greater than 10% per year.

answer

TRUE

question

Demand-pull inflation often occurs during war time

answer

TRUE

question

German consumers after WWI had to pay about a trillion deutsche marks for something that would have been only one mark four years earlier

answer

TRUE

question

Inflation has occurred in the US every year since

answer

1890

question

In 1933, inflation was a problem in the US

answer

FALSE

question

The US has never dealt with galloping inflation

answer

TRUE

question

If inflation was a problem in our economy, the Neoclassical School would say that the government should not try to fix it (leave the economy alone)

answer

TRUE

question

The poorest 60% of the world's population earns ____ % of world income

answer

question

Half of the people born next year will be born in industrially advanced countries

answer

FALSE

question

The average per capita income for low-income nations is about $10,000 per year

answer

FALSE

question

All of the following are major problems in developing countries except

answer

structural unemployment

question

In Mozambique, more than half of adults cannot read

answer

TRUE

question

The paradox of thrift asserts that to increase savings in the economy, in reality, which of the following will happen (thus the paradox) except

[basically which of the answers given is correct]

answer

The MPS will increase

question

What should a little country try to do in order to be successful in its international intergration

answer

Find the way to be specialized at high levels of quality in order to find niches in the international markets

question

...

answer

...

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