Econ 102 - Principles of Macroeconomics » Winter 2021 » Exam 1
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Question #1
The oldest economic system in which economic decisions are conducted in the same manner generation after generation is called a ________________ economy.
A.
market
B.
traditional
C.
underground
D.
command
Question #2
Which of the following is an example of a derived demand for labor?
A.
an increase demand for pets leads to an increase in demand for veterinarians
B.
people fleeing from a hurricane leads to a higher demand for gasoline
C.
hot weather leads to an increase in demand for ice cream
D.
the invention of online banking leads to a decrease in demand for bank tellers
Question #3
If the price of Apple iPhones increase and the demand for androids increase, this is an example of
A.
complements
B.
substitutes
C.
inferior goods
D.
normal goods
Question #4
Which of the following statements is true about the law of diminishing marginal utility?
A.
as consumption decreases the marginal utility derived from each additional unit declines
B.
as consumption increases the marginal utility derived from each additional unit increases
C.
as consumption increases the marginal utility derived from each additional unit stays the same
D.
as consumption increases the marginal utility derived from each additional unit declines
Question #5
Immigration policies restrict the number of agricultural workers entering the US. How will this affect the labor market for agricultural workers?
A.
labor demand will shift left
B.
labor supply will shift left
C.
labor supply will shift right
D.
labor demand will shift right
Question #6
Which of the following statements is true about the "Invisible Hand"?
A.
through self-interest, firms specialize and take advantage of economies of scale
B.
through self-interest, producers and consumers reach an efficient allocation of resources
C.
through self-interest, producers and consumers reach an inefficient allocation of resources
D.
labor is divided and workers specialize in one specific task
Question #7
If the demand for labor increases, then wages ______________ and the quantity of labor _____________
A.
rise, increases
B.
fall, decreases
C.
rise, decreases
D.
fall, increases
Question #8
When workers do a specific task repeatedly and become highly efficient, this is called
A.
specialization
B.
the invisible hand
C.
private enterprise
D.
division of labor
Question #9
Which factor will cause a shift in the demand curve?
A.
changes in income
B.
a change in the price of the good
C.
changes in technology
D.
changes in input prices
Question #10
Which of the following statements is true about the Law of Increasing Opportunity Cost?
A.
As production of a good or service increases, the marginal opportunity cost of producing it increases
B.
As production of a good or service increases, the marginal opportunity cost of producing it decreases
C.
As production of a good or service decreases, the marginal opportunity cost of producing it decreases
D.
As production of a good or service decreases, the marginal opportunity cost of producing it increases
Question #11
Unemployment is a situation where the supply of labor _______________ the demand for labor.
A.
is less than
B.
is equivalent to
C.
is equal to
D.
is more than
Question #12
Tim has a weekly budget of $50, which he likes to spend on going to the gym and buying protein shakes. Going to the gym costs $10 and a protein shake costs $5. What is the maximum number of protein shakes Tim can buy?
A.
50 protein shakes
B.
10 protein shakes
C.
15 protein shakes
D.
5 protein shakes
Question #13
Which statement is true about the Law of Demand?
A.
When the price of a good falls, quantity demanded falls
B.
There is a positive relationship between price and quantity demanded
C.
When the price of a good rises, quantity demanded rises
D.
When the price of a good falls, quantity demanded rises
Question #14
Which of the following is an example of a normative statement?
A.
"Washing hands is an effective way to stay healthy"
B.
"Face masks can be uncomfortable to wear"
C.
"Face masks help slow the spread of diseases"
D.
"Everyone should wear face masks"
Question #15
When incomes fall and quantity demanded for a good rises, the good is
A.
a complement
B.
a luxury
C.
inferior
D.
normal
Question #16
North Korea and Venezuela are examples of a _________________ economy.
A.
market
B.
command
C.
traditional
D.
underground
Question #17
Which of the following is true about a shortage?
A.
There is excess supply
B.
There is excess demand
C.
demand equals supply
D.
supply exceeds demand
Question #18
A point outside the production possibilities frontier is
A.
not feasible
B.
feasible, but inefficient
C.
not feasible, but efficient
D.
feasible and efficient
Question #19
In the market for goods and services, ______________ supply the goods and services.
A.
individuals
B.
households
C.
firms
D.
the government
Question #20
Which of the following statements is not true about economics?
A.
economists use mathematical modeling to explain theories
B.
economics is the study of how individuals allocate unlimited resources
C.
economics is a social science
D.
economics is the study of how individuals allocate scarce resources
Question #21
Minimum wage is an example of a(n)
A.
equilibrium wage
B.
price floor
C.
wage ceiling
D.
price ceiling
Question #22
Which of the following is an example where technology acts as a substitute for labor?
A.
the ATM machine reduces the demand for bank tellers
B.
a decrease in demand for clothes decreases the demand for seamstresses
C.
an increase in demand for solar panels leads to an increase in demand for solar panel installers
D.
a decrease in demand for haircuts decreases the demand for barbers
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