Economics CC 2 Sec ON 1 Week 4 Quiz

Economics CC 2 Sec ON 1 Week 4 Quiz | chatbot las positas  community college

Question 1

With a constant opportunity cost between goods A and B, the production possibilities frontier (PPF) for goods A and B would  

·         be a straight line.  

·         be a bowed-outward line.  

·         be a bowed-inward line.  

·         not exist.

Question 2

Which of the following statements is true?

·         Productive inefficiency implies that it is possible to produce more of one good and no less of another, but only if additional resources are made available.  

·         Productive efficiency implies that it is possible to produce more of one good and no less of another, even without additional resources.  

·         Productive inefficiency implies that it is impossible to produce more of one good and no less of another.  

·         Productive inefficiency implies that it is possible to produce more of one good and no less of another, even without additional resources.

Question 3

Exhibit 2-9

Alex       Adam

Good A Good B Good A Good B

0              300         0              160

25           225         30           120

50           150         60           80

75           75           90           40

100         0              120         0

Refer to Exhibit 2-9. Who has the comparative advantage in the production of good B?

·         Alex  

·         Adam  

·         Both Alex and Adam  

·         Neither Alex nor Adam

Question 4

In a situation where two goods can be produced by two different people, it is possible for one person to have a comparative advantage in the production of both goods and the other person to have the comparative advantage in the production of neither good.  

·         True  

·         False

Question 5

Points inside (below) the production possibilities frontier (PPF) are  

·         unattainable.  

·         attainable, but productive inefficient.  

·         preferable to points that lie on the PPF.  

·         attainable and productive efficient.

Question 6

Which of the following is not part of GDP?   

·         the value of a new home built and purchased during the year   

·         the value of shares of Microsoft stock bought and sold during the year   

·         the value of long distance telephone services rendered during the year   

·         the value of new furniture produced during the year

Question 7

Which of the following is not included in GDP calculations?   

·         the value of an accountant's services   

·         the value of 500 shares of Microsoft stock sold to an investor   

·         the value of high-definition television sets produced, but not sold, during the year

·         the value of a haircut

Question 8

Which of the following products are not included in current U.S. GDP?   

·         a Washington apple   

·         a Ford Mustang produced last year and sold this year   

·         a physical examination at a California health clinic   

·         All of the above are included in current U.S. GDP.

Question 9

Net exports are defined as:   

·         exports plus imports.   

·         exports minus imports.   

·         imports minus exports.   

·         exports plus imports minus tariffs.

Question 10

If the unemployment rate is 8 percent, this means:   

·         8 percent of the population is unemployed.   

·         8 percent of the population over age 16 is unemployed.   

·         8 percent of the labor force is unemployed.   

·         the number of unemployed persons equals 8 percent of the employed persons.

Question 11

The official unemployment rate may not reflect the true state of unemployment because:   

·         Some workers may go through the motions of looking for work to keep their unemployment benefits, but not actually be looking for work.   

·         Some people who are working in the underground economy may be classified as unemployed.   

·         Some may leave the labor force and go back to school only because job conditions are currently poor.   

·         all of the above.

Question 12

Which of the following individuals would be considered unemployed?   

·         a lawyer temporarily working as an assistant in a law firm   

·         a computer technician who has not worked for 10 months and gave up looking 4 months ago   

·         a full time student who feel that he is taking too many classes to work  

·         none of the above

Question 13

The unemployment rate measures:    

·         unemployed workers as a percentage of the population.   

·         unemployed workers as a percentage of the population over the age of sixteen.   

·         unemployed workers as a percentage of the labor force.   

·         the number of people unemployed divided by the number of people employed.

Question 14

Kathryn chooses to go to college full-time rather than to work. Kathryn:   

·         is not part of the labor force.   

·         is part of the labor force and what economists call a discouraged worker.   

·         is part of the labor force, but not actively seeking work.   

·         is considered employed.

Question 15

A nation’s production possibilities curve [PPC] will shift outward if its workers receive better training.  

·         True  

·         False

Question 16

Which of the following best describes a tradeoff?  

·         An office executive enrolling into a management course to develop her skills.  

·         An investor buying stocks of a start-up company.  

·         A businessman investing a portion of company's profit in research and development.  

·         A college student sacrificing a few hours of study time to work at the town cafeteria. 

·         A worker purchasing a new car with her bonus earnings.

Question 17

People (and all resources):

·         tend to specialize in those activities in which their opportunity costs are minimized.  

·         tend to specialize in those activities in which their opportunity costs are maximized.  

·         never consider opportunity costs before specializing in a particular activity.  

·         consider only direct costs while choosing to specialize in a particular activity.  

·         do not act in their own self-interest but specialize in those activities which benefit others.

Question 18

If the general education level within a country rises significantly over time, it is likely that:  

·         the country will move to a different point along its current production possibilities curve.  

·         the country’s production possibilities curve will not change in any way.  

·         the country’s production possibilities curve will shift in.  

·         the country’s production possibilities curve will shift out.  

·         the country’s production possibilities curve will become convex to the origin.

Question 19

If an economy is operating at a point outside the production possibilities curve [PPC] , either the society has resources that are not being fully used or production is not efficient.  

·         True  

·         False

Question 20

GDP excludes:    

·         business purchases of investment goods, such as factories.    

·         government purchases of military equipment.    

·         the building of a new apartment complex.    

·         none of the above.

Question 21

Which of the following factors that affect our well-being does GDP fail to adequately account for?    

·         changes in the quality of goods    

·         externalities    

·         leisure  

·         all of the above

Question 22

A price index can fall from one year to the next:    

·         even when nominal GDP falls.    

·         even when real GDP falls.    

·         even when some individual good's prices rise.    

·         in any of the above circumstances.

Question 23

If real GDP increased by 2% and nominal GDP increased by 4%, then output:    

·         increased and the price level increased.    

·         increased and the price level decreased.    

·         decreased and the price level increased.    

·         decreased and the price level decreased.

Question 24

GDP that has been adjusted for changes in the price level is called:    

·         nominal GDP.    

·         real GDP.    

·         personal income.    

·         net GDP.

Question 25

An unanticipated increase in inflation will:    

·         redistribute income from employers to workers.    

·         redistribute income from lenders to borrowers.    

·         redistribute income from borrowers to lenders.    

·         do none of the above.

Question 26

Which of the following groups are typically harmed by unexpected inflation?

(i) lenders

(ii) borrowers

(iii) pensioners on fixed incomes

(i) only  

(i) and (ii) only  

(ii) and (iii) only  

(i) and (iii) only  

(i), (ii) and (iii)

Question 27

If inflation had long been 4% and was therefore expected to continue, then it unexpectedly increased to 7% inflation:    

·         the real interest rate on loans issued just before the change occurred would decrease by three percentage points.    

·         the real interest rate on loans issued just before the change occurred would increase by three percentage points.    

·         the real interest rate on loans issued just before the change occurred would not change.    

·         none of the above.

Question 28

If the real interest rate is 3% and the inflation rate is 6%, the nominal interest rate is    

·         2%    

·         3%    

·         -3%    

·         9%

Question 29

If the economy is operating at the natural rate of unemployment, which of the following is essentially eliminated?    

·         frictional unemployment    

·         structural unemployment    

·         cyclical unemployment    

·         all of the above

Question 30

The following table shows the macroeconomic data in a given country in 2019.

Table 13

Item      Amount in dollars

(billions)

Consumption     8,224

        Consumption of Durable Goods        2,460

        Consumption of Non Durable Goods              2,550

        Consumption of Services      3,214

Investment        2,585

       Fixed Investment     1,360

       Other Investment    1,225

Government purchases of Goods & Services      1,867

Imports                1,120

Exports 1,357

Refer to Table 13. What is the value of GDP in this country in 2019?

·         $12,913  

·         $12,224  

·         $12,439  

·         $23,722  

·         $25,962

Question 31

Exhibit 1

Person A

 Good X                Good Y

 200        0

 150        50

 100        100

 50          150

 0             200

Person B

 Good X                Good Y

0              120

40           90

  80         60

120         30

160         0

Refer Exhibit 1. Person A can produce the following combinations of X and Y: 200X and 0Y, 150X and 50Y, 100X and 100Y, 150X and 50Y, or 200X and 0Y.  Person B can produce the following combinations of X and Y: 0X and 120Y, 40X and 90Y, 80X and 60Y, 120X and 30Y, or 160X and 0Y. Person A has the comparative advantage in the production of _____________ and person B has the comparative advantage in the production of __________________.

X; Y

Y; X

neither good X nor good Y; neither good X nor good Y

both good X and good Y; neither good X nor good Y

neither good X nor good Y; both good X and good Y

Question 32

2.5 / 2.5 pts

Point        Production chocolate bars         Production cans of cola

A                                   0                                         100

B                                 10                                           90

C                                 20                                           70

D                                 30                                           40

E                                 40                                             0

The above table shows production points on Sweet-Tooth Land's production possibilities frontier. A movement from ________ represents the greatest opportunity cost of increasing chocolate bar production.

·         point B to point C   

·         point C to point D  

·         point A to point B  

·         point D to point E

Question 33

Michael can produce the following combinations of X and Y: 10X and 10Y, 5X and 15Y, or 0X and 20Y. Vernon can produce the following combinations of X and Y: 40X and 0Y, 30X and 50Y, or 20X and 100Y. It follows that

·         Michael has the comparative advantage in producing X and Vernon has the comparative advantage in producing Y.  

·         Michael has the comparative advantage in producing Y and Vernon has the comparative advantage in producing X.  

·         Neither Michael nor Vernon has a comparative advantage in producing X.  

·         Neither Michael nor Vernon has a comparative advantage in producing Y.  

·         There is not enough information to answer the question.

Question 34

If the law of increasing opportunity costs is operable, and currently the opportunity cost of producing the 101st unit of good X is 5Y, then the opportunity cost of producing the 91st unit of good is X is most likely to be

·         less than 5Y.  

·         more than 1/5Y but less than 1Y.  

·         more than 5Y  

·         less than 1/5Y but more than zero.

Question 35

Scenario 5:

Consider an island country called Sierraland. Of 2,177 adults surveyed in this country in 2019, 395 are not working. The status of those not working is as follows:

71 full-time students;

52 discouraged workers;

95 actively seeking employment;

87 retirees;

90 others.

Refer to Scenario 5. What is the official unemployment rate in this country in 2019?

·         5.06% 

·         4.36%  

·         7.62%  

·         6.75%  

·         18.14%

Question 36

Which of the following goods is a final good?  

·         lettuce that a restaurant buys to put on sandwiches  

·         tires that a car company buys to put on the cars it produces  

·         a television set that Chi-Mai buys to put in her college dorm room  

·         all of the above

Question 37

The economy was at point A producing 100X and 200Y. It moved to point B where it produces 200X and 300Y. It follows that

·         point A may have been a point below the economy's PPF, while point B may lie on the production possibilities frontier (PPF).  

·         the economy has moved from one point on its PPF to another point on the same PPF.  

·         the economy's PPF could have shifted outward and point A was a point on the economy's old PPF.  

·         a or b  

·         a or c

Question 38

Nominal GDP is $10,000 billion in 2011, but real GDP is only $11,111. It follows that:    

·         the GDP deflator is equal to 111.    

·         the GDP deflator is equal to 100.    

·         the GDP deflator is equal to 90.    

·         prices must have decreased relative to the base year.

Question 39

2.5 / 2.5 pts

Exhibit 11-1

GDP - Expenditure Approach     

Category              Amount

(billions of current dollars)           Percent of GDP

Consumption (C)             

  70%

Investment (I)  

  10%

Government purchases (G)       

  15%

Net exports of goods and services (NX)

Gross domestic product                $9,000   100%

Refer to Exhibit 11-1. What conclusion regarding exports and imports can be arrived at looking at the data provided?

·         Exports exceeded imports.    

·         Imports exceeded exports.    

·         Exports equaled imports.    

·         Data insufficient to arrive at any conclusion.

Question 40

Exhibit 2-9

Alex       Adam

Good X Good Y Good X Good Y

0              120         0              160

25           90           30           120

50           60           60           80

75           30           90           40

100         0              120         0

Refer to Exhibit 2-9. Alex can produce the following combinations of X and Y: 0X and 120Y, 25X and 90Y, 50X and 60Y, 75X and 30Y, or 100X and 0Y. Adam can produce the following combinations of X and Y: 0X and 160Y, 30X and 120Y, 60X and 80Y, 90X and 40Y, or 120X and 0Y. Who has the comparative advantage in the production of good X?

·         Alex  

·         Adam  

·         Both Alex and Adam  

·         Neither Alex nor Adam

Question 41

2.5 / 2.5 pts

The table below provides the nominal annual salary of the senators and the CPI data (Base Year: 2000) in the United States.

Table 15

Year       Nominal Annual Salary   CPI

1990       $98,400 75.9

1995       $133,600              88.5

2000       $141,300              100.0

2010       $172,100              113.4

2015       $184,300              119.4

2019       $195,500              124.8

Refer to Table 15. What is the real annual salary (expressed in 2000 constant prices) of the U.S. senators for the years 2015.

·         $168,712.2  

·         $154,355.1  

·         $156,650.6  

·         $176,342.4  

·         $220,054.2

Question 42

If a minimum wage law is passed imposing a price floor above the equilibrium price of unskilled labor and employers increasingly used efficiency wages, it would ___ unemployment and ____ the natural rate of unemployment:

·         Increase; increase.    

·         Increase; not change.    

·         Not change, increase.    

·         Do none of the above.

Question 43

Suzie Homemaker works in her home as a full-time caretaker and homemaker. Officially, she is:

·         employed.    

·         unemployed.    

·         not in the labor force.    

·         a discouraged worker.

Question 44

Scenario 8

Suppose that in Country A, one worker per day can produce either 68 units of food or 36 units of capital goods; while in in Country B, one worker per day can produce either 78 units of food or 46 units of capital goods.

Refer to Scenario 8. Which country has a comparative advantage in the production of capital goods?

·         Country A  

·         Country B  

·         Both Country A and Country B  

·         Neither Country A nor Country B

Question 45

Suppose the population (age 16 and over) of Madagascar is 200 million; 9 million are unemployed, and 102 million hold jobs. Indicate the rate of unemployment of Madagascar.

·         The unemployment rate is 4.5 percent.  

·         The unemployment rate is 7.5 percent.  

·         The unemployment rate is 8.1 percent.  

·         The unemployment rate is 8.8 percent.

Question 46

If the number of employed persons in a country equals 24 million, the number of unemployed persons equals 6 million, and the number of persons over age 16 in the population equals 40 million, the unemployment rate equals:    

·         8 percent.    

·         20 percent.    

·         25 percent.    

·         32 percent.

Question 47

If the population older than 16 years of age equals 150 million, the labor force equals 110 million, and the total number of persons employed equals 96 million, then the unemployment rate is:    

·         8 percent.    

·         9.3 percent.  

·         10.9 percent.    

·         12.7 percent.   

·         28 percent.

Question 48

Say that initially the nominal interest rate is 9% and prices are stable, but the inflation rate the following year rises to 6%. If the real rate of interest is to remain unchanged, the nominal interest rate in the second year must:    

·         rise by 9 percentage points.    

·         rise by 6 percentage points.    

·         rise by 3 percentage points.    

·         remain unchanged.

Question 49

What would happen to the nominal interest rate if originally the real interest rate was 14% and the inflation rate was 10%, then the real interest rate fell to 7% as the inflation rate fell to 4%? It would go from:    

·         24% to 11%.    

·         11% to 24%.   

·         4% to 3%.    

·         3% to 4%.

Question 50

The best reason economists take only final goods and services into account when calculating GDP is that  

·         this is the way things have always been done, but there is no particular reason why.  

·         they want to avoid the problem of final counting.  

·         they want to avoid the problem of double counting.  

·         this is the only way it can be done.