1、if the price of oil, a close substitute for coal, increases, then a、the supply curve for coal will shift to the right. b、the demand curve for coal will shift to the right. c、the equilibrium price and quantity of coal will not change. d、the quantity of coal demanded will decline.
2、identify which one of the following is a normative statement: a、the high temperature today was 35 degrees. b、it was hotter today than yesterday. c、a kilogram of shrimp is more expensive than a kilogram of potato in the supermarket. d、shrimp is more delicious than potato.
3、a shift in the supply curve of bicycles that results from higher steel prices will lead to a、higher prices b、lower prices c、a shift of the demand curve d、larger output
4、the budget line a、determines an individual’s optimal consumption basket. b、will not shift at all if the prices of both commodities increase and income is unchanged. c、determines an individual’s possible consumption baskets. d、is a straight line whose slope is given by the rate of inflation.
5、marginal cost equals a、total cost divided by total output. b、the change in total cost associated with an additional unit of output. c、the change in average cost. d、the slope of the average cost curve.
6、an economist’s definition of profit differs from that of an accountant because a、the economist is only interested in marginal cost and marginal revenue. b、the economist includes the opportunity cost of owner-supplied inputs in total cost. c、accountants cannot maximize. d、economists cannot add or subtract correctly.
7、an increase in fixed cost will affect which of the following? a、marginal cost b、average variable cost c、average total cost d、marginal revenue
8、a firm will shut down in the short run if a、p < avc b、p > avc c、p < mc d、p > mc
chapter 14：the aggregate expenditure model
mid-term exam
1、which of the following is not a part of aggregate demand? a、consumption expenditures b、national income. c、government purchases of goods and services d、investment expenditures
2、if a $10 billion increase in disposable income results in an $8 billion increase in consumption spending, then the marginal propensity to consume is a、0.2 b、0.5 c、0.8 d、1.0
3、when aggregate demand is less than output a、inventories are likely to be increasing. b、inventories are likely to be decreasing. c、there will be a downward shift in the expenditure schedule. d、firms are likely to raise prices.
4、if the marginal propensity to consume is 0.75, what decrease in taxes will initially increase consumption spending by $15 billion? a、$11.25 billion b、$15 billion c、$20 billion d、$60 billion
5、an example of structural unemployment would be: a、sue leaving teaching and waiting to find a new teaching position. b、bob not being able to find work due to poor economic conditions. c、peter's teaching skills no longer being demanded in the market. d、phillip not finding employment over the summer vocation.
6、equilibrium gdp is determined by the intersection of the aggregate expenditures schedule and the a、consumption function b、aggregate demand curve c、45° line d、level of full-employment output
7、if the marginal propensity to consume is 0.6 and prices do not change, the multiplier is a、1/0.6 = 1.67 b、0.6 c、1/(1 – 0.6) = 2.5 d、1/(1 0.6) = 0.63
8、money serves all but which one of the following functions? a、medium of exchange. b、hedge against inflation c、unit of account d、store of value
final exam
economics
1、pure monopoly is characterized by a、many firms that produce a homogeneous product b、many firms that produce slightly different products that are close substitutes c、such a small number of firms that each must figure out how the others will respond to its own actions d、one firm, with no competitors, that produces a product with no close substitutes
2、an increase in a monopolist’s average cost will lead to a、an increase in price, as the monopolist passes on the price increase b、an increase in price only if marginal cost also increases c、a decrease in price as the monopolist needs to sell more in order to cover increased costs d、an increase in price only if the elasticity of demand is less than 1.0
3、following an increase in income, a、a consumer’s indifference curve will shift b、the slope of the budget line will increase. c、individual demand curve will not shift d、the budget line will shift in a parallel fashion
4、suppose that the government imposes a business licence fee of $100 on all firms. profit-maximizing firms that stay in business will respond to this tax by a、raising prices to pay the tax b、cutting output to reduce costs c、lowering prices to stimulate sales d、doing nothing
5、for an inferior good, the demand curve a、must have a negative slope b、is likely to be horizontal c、must have a positive slope d、may have a positive slope
6、a rise in the level of unsold products (inventories) indicates: a、total income is greater than total expenditure b、investment is greater than savings c、total expenditure is greater than total income d、economic activities is growing
7、which of the following least represents supply side policy to increase long term economic growth ? a、a reduction in business taxes b、a rise in government spending on education c、a fall in interest rates d、less regulation of industry
8、which of the following is likely to reduce the growth rate of the money supply? a、a large depreciation of the domestic currency b、a federal budget deficit c、sales by the central bank of government securities to the money market d、an increase in credit creation by commercial banks
9、a bank always holds a minimum reserve ratio of 20%. the minimum new deposit that would allow the banks to expand its loans by $1000 is: a、$200 b、$250 c、$425 d、$750
10、which of the following could explain an increase in the unemployment rate and the number of employed people: a、less people are actively looking for work b、the school leaving age has risen c、the economy has experienced a downturn d、the labor force has increased