1. During a concert at Hammons Center, a large number of patrons decided to leave 20 minutes early to avoid traffic congestion getting away from campus to late evening "study" spots. Due to the large number involved in the exodus, there was considerable congestion in the parking area before the concert was over. This occurrence depicts which of the following? a.
Murphy's Law b. post hoc fallacy c. law of diminishing returns * d. fallacy of composition e.
law of increasing costs 2. An editor of a local newspaper called for the government to abolish the minimum wage because it takes advantage of consumers. This is an example of: a. positive economic statement b.
a pure economic statement c. an exogenous use of economics * d. a normative economic statement e. an abstract economic statement an exogenous use of economics 3.
Which of the following is the primary incentive in determining WHAT to produce in a free market price system? Produce those products that a. enjoy maximum freedom from government controls b. are needed by the masses of people c. are easiest to produce * d.
will provide maximum profits for the producer Use the table below to answer question number 4 Alternative | Pizza | Beer | A | 0 | 100 | B | 10 | 95 |C | 20 | 80 | D | 30 | 60 | E | 40 | 35 | F | 50 | 0 | 4. The opportunity cost of each of the 11th through l9th units of pizza is approximately: a. 10 units of beer * b. 1. 5 units of beer c. 2 units of beer d.
80 units of beer e. none of the above 5. Assuming an economy to be operating at a point inside the production possibilities line, one may conclude that: a. the economy is at full employment b. maximum output is now achieved * c.
unemployment or underemployment exists d. the economy is of a command type 6. The law of increasing opportunity costs states that: a. f the prices of all the resources devoted to the production of goods increase, the cost of producing any particular good will increase at the same rate b. if the sum of the costs of producing a particular good rises by a specified percent, the price of that good must rise by a greater relative amount c.
the sum of the costs of producing a particular good cannot rise above the current market price of that good * d. if society wants to produce more of a particular good, it must sacrifice larger and larger amounts of other goods to do so 7. If the price of product L increases, the demand curve for a close substitute product M will: a. emain unchanged * b. shift to the right c.
shift to the left d. none of the above 8. Other things being unchanged, a decrease in the supply of X might be caused by: a. an improvement in the technology for producing X b. an increase in the number of firms producing X c.
a decline in the price of the basic raw material used in producing X d. a government subsidy per unit of output, paid to firms producing X * e. an increase in the wages paid to laborers employed in the production of X 9. The demand for parking spaces on this campus is very high. If we were to raise the price of a parking sticker, we would decrease the demand.This statement: a.
confuses a change in quantity demanded with a movement along the demand curve b. is correct as stated c. confuses the determinants of demand with the determinants of supply * d. confuses a change in quantity demanded with a change in demand 10.
With an increase in profits in a particular industry, we might expect a. firms to leave the industry b. firms to produce less * c. firms to enter the industry d. people to buy less e. profits don't have anything to do with what firms do Use the graph below to answer question number 11 11.
Using the graph above, a price of $1. 00 per unit will result in: * a. shortage of 50 units b. a surplus of 80 units c.
a shortage of 80 units d. a surplus of 50 units e. impossible to say without more information 12. Given the standard supply-and-demand diagram, which of the following statements is correct? (Hint: draw diagrams) a.
If supply shifts left and demand remains constant, equilibrium price will fall b. If supply shifts right and demand remains constant, equilibrium price will rise c. If demand shifts left and supply shifts right, equilibrium price will rise d. If supply shifts right and demand shifts right even more, equilibrium price will fall. * e.
one of the above 13. A price ceiling is * a. a maximum legal price b. the only legal price c. a minimum legal price d.
the legal price of housing 14. Real GDP (or GDP in "constant dollars") means * a. GDP has been adjusted for price level changes b. GDP is not changing c.
GDP has been corrected for quality changes d. prices have not changed e. GDP has been corrected for changes in tastes 15. Which of the following items is excluded from the calculation of GDP: a.
the purchase of 100 shares of General Motors stock b. the sale of 100 shares of General Motors stock c. the value of a housewife's services . the sale of unused military surplus * e.
all of these 16. GDP attempts to measure economic activity by avoiding double-counting. Which of the following would be an example of double-counting? * a. Counting both the value of a carpenter's labor and the value of the new house that he produces. b.
Counting the real estate agent's commission on the sale of a house. c. Counting the cost of government paid street improvements. d.
All of the above would be double-counting. 17. An income tax may be called progressive when: a. the tax rate on low-income groups exceeds the tax rate of high-income groups b. igh-income groups pay more taxes absolutely than do low-income groups * c.
the tax rate increases as income goes up d. the tax rate is constant, but the absolute amount of taxes paid increases, as income goes up 18. Suppose a person earning $20,000 a year is paying $2,000 in income taxes. If the marginal tax rate is 15%, what will his year's income taxes be if he takes a temporary part-time job earning $2,000 additional income? a. $3,300 b.
$300 c. $3,000 * d. $2,300 e. not possible to calculate given the information 19. In the official statistics, a worker who is so discouraged that he has stopped looking for employment is counted as: a.
nemployed b. in the labor force, but not employed c. underemployed * d. not in the labor force e. none of the above 20.
The Consumer Price Index rose from 340 in 1987 to 354 in 1988. The inflation rate from l987 to 1988 was: a. 14 percent b. 7 percent * c.
4. 1 percent d. 3. 54 percent e. less than 2 percent 21. In order to produce more fuel efficient cars, U.
S. auto makers have used less steel and more light weight materials. The unemployment it causes in the steel industry is an example of: a. cyclical unemployment b. seasonal unemployment * c.
structural unemployment d. frictional unemployment e. unnatural unemployment
