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Objective: Explain how the principles of economics affect de

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Objective: Explain how the principles of economics affect decision-making, interaction, and the workings of the economy as a whole. <br /><br />1.     The Kindle, an electronic book device, is a product for which its usefulness increases with the number of people who use it. The more people who own Kindles, the more products that will be available for download, and the more useful the Kindle will become for its owners. What economic concept does this describe? <br />a.     0a network externality. <br />b.     0the ultimatum game. <br />c.     0the endowment effect. <br />d.     0the substitution effect. <br /><br />Objective: Compare and contrast market systems and the role of an economist within these systems. <br /><br />2.     What are the actions of producers in the circular flow model? <br />a.     0sell goods and services in the input market. <br />b.     0and households spend earnings from resource sales on goods and services in the factor market. <br />c.     0hire resources sold by households in the factor market. <br />d.     0spend earnings from resource sales on goods and services in the product market. <br /><br />Objective: Describe how the necessity of a good and the availability of substitutions impact price elasticity. <br /><br />3.     If at a price of $24, Octavia sells 36 home-grown orchids and at $30 she sells 24 home-grown orchids, the demand for her orchids is <br />a.     0elastic. <br />b.     0inelastic. <br />c.     0unit-elastic. <br />d.     0perfectly elastic. <br /><br />Objective: termine how changes in price and quantity influence market equilibrium. <br /><br />4. Auctions in recent years have resulted in higher prices paid for letters written by John Wilkes Booth than those written by Abraham Lincoln. Which of the following events would cause the price differences in these letters to get smaller? <br />a.     0The demand for Booth letters decreases. <br />b.     0The supply of Lincoln letters increases. <br />c.     0The demand for Lincoln letters increases and the supply of Booth letters increases. <br />d.     0The demand for Lincoln letters decreases and the demand for Booth letters increases. <br /><br /><br />Week Two: Markets and types of Goods <br /><br />Objective: Explain how labor market equilibrium is affected by the supply and demand of labor. <br /><br />5.     The town of Saddle Peak has a fixed supply of mountain view lots. In this case, the price per square foot of mountain view lots is <br />a.     0determined only by supply. <br />b.     0determined only by demand. <br />c.     0set by government officials of Saddle Peak. <br />d.     0negotiated by environmental groups and property developers. <br /><br />Objective: Summarize the factors that affect labor supply and demand. <br /><br />6.     Suppose the demand curve for a product is represented by a typical downward-sloping curve. Now suppose the demand for this product decreases. Which of the following statements accurately predicts the resulting decrease in price? <br />a.     0The more elastic the supply curve, the greater the price increase. <br />b.     0The more elastic the supply curve, the smaller the price decrease. <br />c.     0The increase in price is not affected by the elasticity of the supply curve. <br />d.     0The decrease in price will always be proportional to the magnitude of the demand shift. <br /><br />Objective: Compare and contrast public goods, private goods, common resources, and natural monopolies. <br /><br />7.     In economics, the term "free rider" refers to <br />a.     0a person who evades taxes. <br />b.     0a supervisor who delegates menial time-consuming activities to others. <br />c.     0one who volunteers her services. <br />d.     0one who waits for others to produce a good and then enjoys its benefits without paying for it. <br /><br />Objective: Describe the characteristics of competitive markets, monopolies, and oligopolies. <br /><br />8.     Which of the following characteristics is common to monopolistic competition and perfect competition? <br />a.     0Firms produce identical products. <br />b.     0Entry barriers into the industry are low. <br />c.     0Each firm faces a downward -sloping demand curve. <br />d.     0Firms take market prices as given. <br /><br />Week Three: Measuring Economic Health and Fiscal Policy <br /><br />Objective: Describe the use of Gross Domestic Product (GDP) to measure the business cycle. <br /><br />9.     What is the largest component of spending in the United States? <br />a.     0consumption spending <br />b.     0investment spending <br />c.     0government spending <br />d.     0net investment spending <br /><br />Objective: Describe the roles of the government bodies that determine national fiscal policies. <br /><br />10.     Fiscal policy refers to changes in <br />a.     0state and local taxes and purchases that are intended to achieve macroeconomic policy objectives. <br />b.     0federal taxes and purchases that are intended to achieve macroeconomic policy objectives. <br />c.     0federal taxes and purchases that are intended to fund the war on terrorism. <br />d.     0the money supply and interest rates that are intended to achieve macroeconomic policy objectives. <br /><br />Objective: Explain the effects of fiscal policies on the economy's production and employment. <br /><br />11.     Money's most narrow definition is based on its function as a <br />a.     0store of value. <br />b.     0unit of account. <br />c.     0standard of deferred payment. <br />d.     0medium of exchange. <br />e.     0standard of barter. <br /><br />Week Four: The Federal Reserve <br /><br />Objective: Describe the purpose and function of money. <br /><br />13.     Economists estimate that ________ of U.S. currency is outside the United States and held primarily by ________. <br />a.     0over half; households and firms in countries where there is little confidence in the local currency <br />b.     0over half; foreign banks and foreign governments <br />c.     0less than one quarter; households and firms in countries where there is little confidence in the local currency <br />d.     0less than one quarter; foreign banks and foreign governments <br /><br />Objective: Explain how the central bank manages a nation's monetary system. <br /><br />14.     Hyperinflation can be caused by <br />a.     0the government selling bonds to the central bank. <br />b.     0the central bank selling bonds to the public. <br />c.     0the government selling bonds to the public. <br />d.     0the central bank selling bonds to the government. <br /><br />Objective: Explain the effects of monetary policies on the economy's production and employment. <br /><br />15.     Expansionary monetary policy to prevent real GDP from falling below potential real GDP would cause the inflation rate to be relatively ________ and real GDP to be relatively ________. <br />a.     0higher; higher <br />b.     0higher; lower <br />c.     0lower; higher <br />d.     0lower; lower <br /><br />Week Five: International Trade <br /><br />Objective: Define absolute and comparative advantage. <br /><br />17.     You have an absolute advantage whenever you <br />a.     0are better educated than someone else. <br />b.     0can produce more of something than others with the same resources. <br />c.     0prefer to do one particular activity. <br />d.     0can produce something at a lower opportunity cost than others. <br /><br />Objective: Describe the influences affecting foreign exchange rates. <br /><br />18.     Currency traders expect the dollar to appreciate. What impact will this have on equilibrium in the foreign exchange market? <br />a.     0The dollar will appreciate, and the equilibrium quantity of dollars will decrease. <br />b.     0The dollar will depreciate, and the equilibrium quantity of dollars exchanged will decrease. <br />c.     0The dollar will appreciate, and the equilibrium quantity of dollars will increase. <br />d.     0The dollar will appreciate, and the change in the equilibrium quantity of dollars exchanged cannot be determined. <br /><br />Objective: Debate issues surrounding international trade. <br /><br />19.     Which of the following would increase the value of the dollar in the long run? <br />a.     0an increase in inflation in the United States relative to other countries <br />b.     0an increase in the demand for American goods relative to goods from other countries <br />c.     0a decrease in U.S. tariffs on foreign goods <br />d.     0an increase in the supply of dollars on the foreign exchange market <br /><br />Objective: Evaluate the effects of government policy on economic behavior. <br /><br />20.     Suppose the United States decides to go back on the gold standard. This should <br />a.     0decrease the Federal Reserve's ability to pursue active monetary policy. <br />b.     0increase the effectiveness of contractionary monetary policy. <br />c.     0increase the effectiveness of expansionary monetary policy. <br />d.     0improve the Federal Reserve's ability to target inflation. <br /><br /><br />The questions contained in the Sample Examination and Final Examination were adapted from Economics.
Submitted: 3 years ago.
Category: Homework

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