Question 1 (3 points)

In calculating the unemployment rate, part-time workers are

	counted as employed because they are receiving payment for work.
	treated the same as "discouraged" workers who are not actively seeking employment.
	used to determine the size of the labor force, but not the unemployment rate.
	counted as unemployed because they are not working full-time.

Question 2 (5 points)

I open a business selling vegetables at a farm market stand. I decide that even though the other farmers charge $0.50 for peppers I am going to raise my price for peppers to $0.75 per pepper. What will happen to my business? Why?

Question 3 (16 points)

Answer for each good/service below:

• Should it be counted in GDP?
• Why? Or explain how.
• Which category? (C I G X M)
• Is it durable or non-durable?

Question 3 options:

1. Coffee beans
   • Should it be counted in GDP?
   • Why? Or explain how.
   • Which category? (C I G X M)
   • Is it durable or non-durable?
2. Hair cut
   • Should it be counted in GDP?
   • Why? Or explain how.
   • Which category? (C I G X M)
   • Is it durable or non-durable?
3. A used car purchased this year
   • Should it be counted in GDP?
   • Why? Or explain how.
   • Which category? (C I G X M)
   • Is it durable or non-durable?
4. Tires for a car
   • Should it be counted in GDP?
   • Why? Or explain how.
   • Which category? (C I G X M)
   • Is it durable or non-durable?

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Question 4 (3 points)

The best example of a "frictionally unemployed" worker is one who

	is discouraged and not actively seeking work.
	reduces productivity by causing friction in a business.
	is laid off during a recessionary period in the economy.
	is in the process of voluntarily switching jobs.

Question 5 (3 points)

In which industry is monopolistic competition most likely to be found?

	agriculture (farming)
	retail
	mining
	utilities

Question 6 (3 points)

I have an MBA (Masters in Business Administration) but can't find a job in business. In order to make money, I took at job making coffee at Starbucks. What kind of employment am I experiencing?

	unemployment
	cyclical employment
	underemployment
	frictional employment

Question 7 (3 points)

Which phase of the business cycle would be most closely associated with an economic contraction?

	recession
	recovery
	peak
	trough

Question 8 (3 points)

Drug dealers agreeing to sell drugs at a certain price is an example of

	collective bargaining
	monopoly
	entreprenuer
	cartel

Question 9 (3 points)

In an economy where Consumption= 50, Investment = 25, Government expenditures = 30, Exports = 10 and Imports = 15, what would the total GDP be equal to?

	175
	100
	105
	130

Question 10 (6 points)

What does it mean to be a Price Taker? What does it mean to be a Price Maker?

Question 11 (5 points)

Give an example of a product or service that you have seen inflation impact recently and explain why you think that.

Question 12 (6 points)

Name 3 benefits of competition.

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Question 13 (3 points)

Full-time homemakers (ex: stay at home mom) and retirees are classified in the data as

Question 13 options:

	employed
	unemployed
	part of the labor force
	not part of the labor force

Question 14 (2 points)

When inflation happens, my buying power (ability to purchase more things for the same price) goes down.

Question 14 options:

	True
	False

Question 15 (5 points)

What is an example of a product that would be included for GNP but not GDP?

Question 15 options:

Question 16 (6 points)

Tell me what you think is the difference between MICROeconomics and MACROeconomics.

Question 16 options:

Question 17 (5 points)

Explain what a trough in the business cycle means.

Question 17 options:

Question 18 (3 points)

Which of the following statements is correct?

Question 18 options:

	Both perfectly competitive and monopolistic firms are price takers.
	Both perfectly competitive and monopolistic firms are price makers.
	A perfectly competitive firm is a price taker, while a pure monopoly is a price maker.
	A perfectly competitive firm is a price maker, while a pure monopoly is a price taker.

Question 19 (3 points)

Which of the following is a barrier to entry?

Question 19 options:

	Startup costs to set up a new business
	Buyer's income
	Close substitutes
	Diminishing marginal returns

Question 20 (3 points)

Government purchases in national income accounts would include payments for _____.

Question 20 options:

	unemployment benefits
	salaries for current U.S. military officers
	public assistance for welfare recipients
	Social Security checks to retirees

Question 21 (3 points)

A perfectly competitive firm does not try to raise its price above the market price because

Question 21 options:

	its demand curve is inelastic, so total revenue will decline
	its competitors would not give permission for it
	this would be considered unethical price chiseling
	it would not be able to sell its products

Question 22 (5 points)

Ebay is an example of a company in the online shopping industry. Answer the following questions about Ebay:

1. Which of the four market structures do you think Ebay would be in? Monopoly, Perfect Competition, Monopolistic Competition, or Oligopoly?
2. Why do you think Ebay and online shopping would be included in that market structure?

Question 22 options:

Paragraph

Lato (Recommended)

19px (Default)

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Question 23 (5 points)

What does CPI include? What does it tell us about cost of living?

Question 24 (3 points)

If one company in a market controls a natural resource, this results in

Question 24 options:

	oligopoly
	monopolistic competition
	monopoly
	pure competition