Table 1 Production Possibilities Combination Soybeans(Tons) Plasma TV's A 1,000 0 B 800 100 C 600 150 D 400 175 E 200 190 F 0 200 1 Using Table 1 above, what is the opportunity cost of producing 800 tons of soybeans instead of 600 tons a There is no opportunity cost this country can easily produce more tons of soybeans b 100 plasma TV's c Four plasma TV's for every ton of soybeans produced d 50 plasma TV's 2 When the price of orange juice decreases, a the demand for orange juice decreases b the demand for orange juice increases c the demand curve for orange juice shifts d the quantity demanded for orange juice increases e the quantity demanded for orange juice decreases 3 When the price of pencils increases from $1 50 to $2 50, there is an increase in demand of pens from 100 to 150, this is evidence that pen and pencils are a substitute goods b complement goods c inferior goods d normal goods e not related 4 You purchased a lamb chop from the grocery store yesterday for $5 The store has a non refundable policy on lamb chops The $5 purchase of the lamb chop is best described as a an average cost b a variable cost c a sunk cost d a low fixed cost 5 Which of the following is a correct statement about a minimum wage law a It reduces costs for employers b It ensures that anyone who wants a job can get a job with a high enough wage c It causes prices to rise as producers pay more for labor d It is a price ceiling law that makes wages higher than the market equilibrium price e It is a price floor law that forces wages to be lower than the market equilibrium price 6 Mortimer loves sushi He loves sushi so much that he asks his congressional representative to work for passage of a price ceiling law Who would be affected by this law and how a Sellers would benefit from such a law because they would receive a higher price for their products b Consumers would benefit from such a law because prices would be lower and all would be able to purchase sushi cheaply c Consumers would benefit from such a law because the sushi would be made of higher quality fish, and each serving would be larger than it had been with no binding price ceiling in place d Some consumers would benefit from such a law because prices for sushi would be lower for those able to buy it in the legal market e Sellers would benefit from such a law because they would be able to sell higher quality sushi and thus capture a larger share of the market 7 A business owner makes 5000 tacos by hand in 600 hours He could have earned $10 00 an hour working at Taco Bell If a taco sells for $6 each and the explicit costs for his taco business total $14,000, then the business owner's economic profit equals $6,000 $10,000 $16,000 $30,000 $11,000 8 The presence of many buyers and sellers is an important characteristic of perfectly competitive markets because it allows a sellers in the market to have influence over the market price b buyers in the market to have influence over the market price c sellers in the market to have influence over the market quantity d buyers in the market to have influence over the market quantity e the price and quantity in the market to be determined by market forces 9 uppose a perfectly competitive broccoli farm can produce 35 crates at an output level where marginal revenue equals marginal cost The price per crate of broccoli is $60 and the average total cost is $30 What is the total profit or loss that this farm is earning a $1,050 00 d $30 b $1,050 00 e $30 c $2,100 9 A monopolist can sell 10,000 units of tea at a price of $5 per unit Lowering the price of tea to $4 raises the quantity demanded to 11,000 units of tea What is the change in total revenue resulting from this price change a $6,000 b $5,000 c $6,000 d $18,000 10 If an economist estimates the MPC to be 0 8 and a recession hits an economy, then a decrease in autonomous investment of $2 billion will result in a decrease in Real GDP of as much as a $6 billion b $1 6 billion c $2 5 billion d $10 billion e $2 billion 11 Here is a consumption function C $1,000 0 8 YD and disposable income is $7,000 Based on this information, what does savings equal to a $6,600 b $13,000 c $400 d $400 e none of the above 12 In the Great Recession of 2007, the Federal Reserve system decided to cut interest rates to increase spending on houses and cars in the United States, but consumer spending fell because people lost their jobs and foreclosed on their houses due to not paying their mortgage payments on their houses This statement is coming from a a Classical economist b a Keynesian economist c neither a Classical economist nor a Keynesian economist 13 Suppose the following occurs (1) consumers expect the prices of houses to rise in the U S within a year and at the same time, labor productivity rises for building houses in the U S economy because there is a more educated labor force (2) the shift in the AD curve shifts more than the shift in the AS curve Based on this information, the equilibrium Price Level will the equilibrium real GDP will and the unemployment rate will (Hint Draw the initial AD SRAS curves and then draw the new AD SRAS curves to derive your final answer) a rise fall rise b fall rise rise c fall rise fall d rise rise fall e none of the above 14 ( Hint Draw the initial AD AS curves and then on the same graph draw the new AD or AS curves to derive your final answer ) Suppose a country's population is aging and the size of the workforce is declining The equilibrium Real GDP will and the equilibrium price level will a increase increase b increase decrease c increase remain unchanged d decrease increase e remain unchanged remain unchanged 15 Which of the following would shift aggregate supply curve to the left a A study predicts that the recent drought during the summer of 2019 will increase food prices and lower output this winter b There is a rise in the median price of houses c A rise in the price level reduces saving and increases interest rates for consumers d Using more robotics in the mass assembly line will result in producing more computers much faster and output increasing 16 If the U S dollar price per Mexican peso moves from $0 10 1 peso to $0 05 1 peso, the peso is said to have and the dollar to have a depreciated appreciated b appreciated appreciated c appreciated depreciated d depreciated depreciated 17 Foreign national income rises and people from Europe and Asia buy more of our goods here in the U S such as houses and computers This raises U S which aggregate demand (AD) The AD curve shifts a net exports raises rightward b imports raises rightward c prices reduces leftward d investment reduces leftward e none of the above 18 Consider a country with a nominal gross domestic product (GDP) of $10 billion in 2010 and $11 billion in 2015 In the same period the population increased by 4 percent and price levels increased by 5 percent What is the economic growth rate for this country a 1 percent d 9 percent b 4 percent e 10 percent c 6 percent 19 When computing economic growth, changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because a if real GDP remains the same, an increase in the population actually means a lower average standards of living b an increase in population will tend to reduce nominal GDP c changes in population tend to have no effect on standards of living d if real GDP remains the same, an increase in the population actually means a raised average standards of living e an increase in the population will tend to decrease average prices 20 Assume tuition and fees at North Carolina State University cost $5,000 in 2004 and $8,500 in 2012 If the price index was 195 in 2004 and 250 in 2012, then we could say a tuition has increased more slowly than inflation b tuition has increased more rapidly than inflation c tuition has increased at about the same rate as inflation d nominal tuition has decreased e tuition suffers from money illusion due to inflation 21 n year 1 the CPI is 175, and in year 2 the CPI is 270 From year 1 to year 2, Martha's salary rises from $50,000 to $60,000, and Chiang's salary rises from $75,000 to $90,000 Who is more than keeping up with inflation a Martha b Chiang c both Martha and Chiang d neither Martha nor Chiang 22 Suppose a basket of goods and services has been selected to calculate the consumer price index (CPI) and 2002 has been selected as the base year In 2002, the basket's cost was $600 in 2004, the basket's cost was $650 and in 2006, the basket's cost was $700 The value of the CPI in 2006 was (rounded to one decimal place) a 92 3 d 116 7 b 106 3 e more than 155 0 c 108 3 23 One argument against unemployment insurance is that unemployment insurance a limits the effects of a recession b is only available during recessions c creates an indirect incentive that can make it less attractive for workers to stay unemployed d can be extended by the government during times of recession 24 In 2008, the Rhode Island's unemployment rate fell from 4 5 to 3 , when the U S economy was in a recession, which was very unusual That's because a there were more jobs being created b more people retired and left the civilian labor force c more people became discouraged and left the civilian labor force simply because they couldn't find a job and stopped actively looking for work d both b and c e all of the above 25 In NBC's hit TV show 30 Rock , actor Dean Winters plays Dennis Duffy, who works as a beeper salesman in New York City Because beepers are an old technology that has been taken over by cell phones, Dennis loses his job What kind of unemployment is Dennis experiencing in this scenario a cyclical d frictional b structural e seasonal c natural 26 The U S federal government offers homeowners a tax deduction for their home loan interest payments This reduction in taxes serves as a(n) incentive to buy a house a direct d complementary b indirect e unintended c neutral 27 A recession has crippled the United States economy, producing a high rate of unemployment Which of the following would be a macroeconomic decision a Congress decides to institute a tax cut and encourage consumer spending in the United States b The United States negotiates a new trade agreement with Japan, hoping to bolster its exports c The federal government extends the duration of unemployment benefits in the United States d A Congresswoman decides to delay the purchase of a new car e a,b,c are all correct choices

Question

Table 1 Production Possibilities Combination Soybeans(Tons) Plasma TV's A 1,000 0 B 800 100 C 600 150 D 400 175 E 200 190 F 0 200 1  Using Table 1 above, what is the opportunity cost of producing 800 tons of soybeans instead of 600 tons  a  There is no opportunity cost  this country can easily produce more tons of soybeans  b  100 plasma TV's  c  Four plasma TV's for every ton of soybeans produced  d  50 plasma TV's  2 When the price of orange juice decreases, a  the demand for orange juice decreases  b  the demand for orange juice increases  c  the demand curve for orange juice shifts  d  the quantity demanded for orange juice increases  e  the quantity demanded for orange juice decreases  3 When the price of pencils increases from $1 50 to $2 50, there is an increase in demand of pens from 100 to 150, this is evidence that pen and pencils are a  substitute goods  b  complement goods  c  inferior goods  d  normal goods  e  not related  4 You purchased a lamb chop from the grocery store yesterday for $5  The store has a non refundable policy on lamb chops  The $5 purchase of the lamb chop is best described as a  an average cost  b  a variable cost  c  a sunk cost  d  a low fixed cost 5 Which of the following is a correct statement about a minimum wage law  a  It reduces costs for employers  b  It ensures that anyone who wants a job can get a job with a high enough wage  c  It causes prices to rise as producers pay more for labor  d  It is a price ceiling law that makes wages higher than the market equilibrium price  e  It is a price floor law that forces wages to be lower than the market equilibrium price  6 Mortimer loves sushi  He loves sushi so much that he asks his congressional representative to work for passage of a price ceiling law  Who would be affected by this law and how  a  Sellers would benefit from such a law because they would receive a higher price for their products  b  Consumers would benefit from such a law because prices would be lower and all would be able to purchase sushi cheaply  c  Consumers would benefit from such a law because the sushi would be made of higher quality fish, and each serving would be larger than it had been with no binding price ceiling in place  d  Some consumers would benefit from such a law because prices for sushi would be lower for those able to buy it in the legal market  e  Sellers would benefit from such a law because they would be able to sell higher quality sushi and thus capture a larger share of the market  7 A business owner makes 5000 tacos by hand in 600 hours  He could have earned $10 00 an hour working at Taco Bell  If a taco sells for $6 each and the explicit costs for his taco business total $14,000, then the business owner's economic profit equals  $6,000 $10,000 $16,000 $30,000 $11,000 8   The presence of many buyers and sellers is an important characteristic of perfectly competitive markets because it allows a  sellers in the market to have influence over the market price  b  buyers in the market to have influence over the market price  c  sellers in the market to have influence over the market quantity  d  buyers in the market to have influence over the market quantity  e  the price and quantity in the market to be determined by market forces  9 uppose a perfectly competitive broccoli farm can produce 35 crates at an output level where marginal revenue equals marginal cost  The price per crate of broccoli is $60 and the average total cost is $30  What is the total profit or loss that this farm is earning  a  $1,050 00 d  $30 b  $1,050 00 e  $30 c  $2,100 9   A monopolist can sell 10,000 units of tea at a price of $5 per unit  Lowering the price of tea to $4 raises the quantity demanded to 11,000 units of tea  What is the change in total revenue resulting from this price change  a  $6,000 b  $5,000 c   $6,000 d   $18,000                 10 If an economist estimates the MPC to be 0 8 and a recession hits an economy, then a decrease in autonomous investment of $2 billion will result in a decrease in Real GDP of as much as a  $6 billion b  $1 6 billion c  $2 5 billion d  $10 billion e  $2 billion 11 Here is a consumption function  C   $1,000   0 8 YD and disposable income is $7,000  Based on this information, what does savings equal to  a  $6,600 b  $13,000 c   $400 d  $400 e  none of the above 12 In the Great Recession of 2007, the Federal Reserve system decided to cut interest rates to increase spending on houses and cars in the United States, but consumer spending fell because people lost their jobs and foreclosed on their houses due to not paying their mortgage payments on their houses  This statement is coming from a  a Classical economist  b  a Keynesian economist  c  neither a Classical economist nor a Keynesian economist  13 Suppose the following occurs  (1) consumers expect the prices of houses to rise in the U S  within a year and at the same time, labor productivity rises for building houses in the U S  economy because there is a more educated labor force  (2) the shift in the AD curve shifts more than the shift in the AS curve  Based on this information, the equilibrium Price Level will              the equilibrium real GDP will           and the unemployment rate will             (Hint  Draw the initial AD SRAS curves and then draw the new AD SRAS curves to derive your final answer)  a  rise  fall  rise b  fall  rise  rise c  fall  rise  fall d  rise  rise fall e none of the above 14 ( Hint  Draw the initial AD AS curves and then on the same graph draw the new AD or AS curves to derive your final answer ) Suppose a country's population is aging and the size of the workforce is declining  The equilibrium Real GDP will           and the equilibrium price level will            a  increase  increase b  increase  decrease c  increase  remain unchanged d  decrease  increase e  remain unchanged  remain unchanged 15 Which of the following would shift aggregate supply curve to the left  a  A study predicts that the recent drought during the summer of 2019 will increase food prices and lower output this winter  b  There is a rise in the median price of houses  c  A rise in the price level reduces saving and increases interest rates for consumers  d  Using more robotics in the mass assembly line will result in producing more computers much faster and output increasing  16 If the U S  dollar price per Mexican peso moves from $0 10   1 peso to $0 05   1 peso, the peso is said to have            and the dollar to have             a  depreciated  appreciated b  appreciated  appreciated c  appreciated  depreciated d  depreciated  depreciated 17 Foreign national income rises and people from Europe and Asia buy more of our goods here in the U S  such as houses and computers  This raises U S              which          aggregate demand (AD)  The AD curve shifts              a  net exports  raises  rightward b  imports  raises  rightward c  prices  reduces  leftward d  investment  reduces  leftward e  none of the above 18 Consider a country with a nominal gross domestic product (GDP) of $10 billion in 2010 and $11 billion in 2015  In the same period the population increased by 4 percent and price levels increased by 5 percent  What is the economic growth rate for this country  a 1 percent d  9 percent b 4 percent e  10 percent c 6 percent 19 When computing economic growth, changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because a  if real GDP remains the same, an increase in the population actually means a lower average standards of living  b an increase in population will tend to reduce nominal GDP  c  changes in population tend to have no effect on standards of living  d  if real GDP remains the same, an increase in the population actually means a raised average standards of living  e an increase in the population will tend to decrease average prices  20  Assume tuition and fees at North Carolina State University cost $5,000 in 2004 and $8,500 in 2012  If the price index was 195 in 2004 and 250 in 2012, then we could say a  tuition has increased more slowly than inflation  b  tuition has increased more rapidly than inflation  c  tuition has increased at about the same rate as inflation  d  nominal tuition has decreased  e  tuition suffers from money illusion due to inflation  21 n year 1 the CPI is 175, and in year 2 the CPI is 270  From year 1 to year 2, Martha's salary rises from $50,000 to $60,000, and Chiang's salary rises from $75,000 to $90,000  Who is  more than keeping up with inflation   a  Martha b  Chiang c  both Martha and Chiang d  neither Martha nor Chiang 22 Suppose a basket of goods and services has been selected to calculate the consumer price index (CPI) and 2002 has been selected as the base year  In 2002, the basket's cost was $600  in 2004, the basket's cost was $650  and in 2006, the basket's cost was $700  The value of the CPI in 2006 was           (rounded to one decimal place) a  92 3  d  116 7  b  106 3  e  more than 155 0  c  108 3  23 One argument against unemployment insurance is that unemployment insurance a  limits the effects of a recession  b is only available during recessions  c  creates an indirect incentive that can make it less attractive for workers to stay unemployed  d  can be extended by the government during times of recession  24 In 2008, the Rhode Island's unemployment rate fell from 4 5  to 3 , when the U S  economy was in a recession, which was very unusual  That's because  a  there were more jobs being created  b  more people retired and left the civilian labor force  c  more people became discouraged and left the civilian labor force simply because they couldn't find a job and stopped actively looking for work  d  both b and c  e  all of the above  25 In NBC's hit TV show 30 Rock , actor Dean Winters plays Dennis Duffy, who works as a beeper salesman in New York City  Because beepers are an old technology that has been taken over by cell phones, Dennis loses his job  What kind of unemployment is Dennis experiencing in this scenario  a  cyclical d  frictional b structural e seasonal c natural 26 The U S  federal government offers homeowners a tax deduction for their home loan interest payments  This reduction in taxes serves as a(n) incentive to buy a house  a  direct d  complementary b  indirect e  unintended c  neutral 27 A recession has crippled the United States economy, producing a high rate of unemployment  Which of the following would be a macroeconomic decision  a  Congress decides to institute a tax cut and encourage consumer spending in the United States  b  The United States negotiates a new trade agreement with Japan, hoping to bolster its exports  c  The federal government extends the duration of unemployment benefits in the United States  d  A Congresswoman decides to delay the purchase of a new car  e  a,b,c are all correct choices

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Table 1 Production Possibilities Combination Soybeans(Tons) Plasma TV's A 1,000 0 B 800 100 C 600 150 D 400 175 E 200 190 F 0

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