Econ 252 Exam Questions With Correct Answers | 100% VERIFIED

Econ 252 Exam Questions With Correct Answers | 100% VERIFIED Statements that claim to describe the way things are: - ANSWER- are positive statements can be tested for accuracy Both B and C above In determining how to use their resources, resource owners are motivated by: - ANSWER- self-interest Produced goods that are used in the production of other goods are: - ANSWER- capital The basic goal in dealing with the problem of scarcity is: - ANSWER- to produce as much consumer satisfaction as possible with the limited resources available At the optimal level of an activity: - ANSWER- its marginal benefit must be equal to its marginal cost If per capita output quadruples in the next fifty years: - ANSWER- human wants will still exceed the production possible with the limited resources available "American automakers benefit from a tariff on imported automobiles. Therefore, tariffs on imported automobiles must be good for the American economy." This statement is an example of the: - ANSWER- fallacy of composition Developed ability that increases a person's productivity is: - ANSWER- human capital The value of the best alternative surrendered when a choice is made is: - ANSWER- opportunity cost Using dollar price as the rationing device means: - ANSWER- that resources will be rationed to the use that is most highly valued by consumers In a market economy, the question of "what to produce" is determined primarily by: - ANSWER- consumer demand When an economy is operating efficiently: - ANSWER- it is producing the maximum output with the available resources and technology Self-sufficiency: - ANSWER- yields a very low standard of living The capitalist vision favors: - ANSWER- private ownership of resources market determination of prices limited government All of the above According to the capitalist vision: - ANSWER- private property leads to the efficient use of resources In a market economy, the question of "how to produce" is determined primarily by: - ANSWER- the least cost method of production Producing according to comparative advantage: - ANSWER- means producing where one has a lower opportunity cost than other producers leads to a higher standard of living Both of the above A trade is beneficial to a person: - ANSWER- when that person values what is received in the trade more than what is given up In a market economy, the question of "for whom to produce" is determined primarily by: - ANSWER- the distribution of income Ned hires Barney to landscape Ned's front yard. The new landscaping increases the value of Ned's house and also increases the value of Homer's house next door. This is an example of: - ANSWER- an external benefit Technological advance: - ANSWER- is the ability to produce more output per resource An increase in the price level is - ANSWER- Inflation Joyce graduates with a degree in industrial engineering in May. After searching for three months, Joyce lands a job as an industrial engineer with a heavy equipment manufacturer. While Joyce was looking for work, she was: - ANSWER- frictionally unemployed The natural unemployment rate is: - ANSWER- the lowest unemployment rate that can be sustained without causing increasing inflation Job destruction caused by technological advance: - ANSWER- frees up labor for new types of production To be counted as employed: - ANSWER- the worker must be 16 years old or older Joyce loses her job with the heavy equipment manufacturer due to new technology that decreases the need for industrial engineers. She searches for a job for six months, but finds that there are no openings for industrial engineers. While Joyce was looking for work, she was: - ANSWER- structurally unemployed The largest category in the market basket that is used to calculate the CPI is: - ANSWER- housing Anyone who does not have a paying job and is not actively seeking employment is: - ANSWER- not in the labor force A period of unemployment: - ANSWER- can be financially devastating for the household affected When output is measured as the sum of Total Expenditures: - ANSWER- the result is GDP On a simple circular flow diagram: - ANSWER- households provide resources households consume goods and services Both of the above On a simple circular flow diagram: - ANSWER- firms use resources to produce goods and services consumption spending is revenue for firms Both A and C above The phase of the business cycle when Real GDP is decreasing is: - ANSWER- Contraction Real GDP is GDP: - ANSWER- adjusted for changes in the price level Which of the following statements is true? - ANSWER- Consumption is the largest component of GDP Nominal GDP may increase: - ANSWER- if there is an increase in production if there is an increase in the price level even if Real GDP decreases All of the above Comparisons of GDP between developed countries and less developed countries will tend to overstate the difference in standard of living because: - ANSWER- GDP does not include nonmarket production