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Econ 1100 Exam 1 Review (1).
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Econ 1100 Exam 1 Review (1).
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Scarcity exists because:a. it is impossible to increase the quantity of available resources.
b. it is impossible to increase the productivity of available resources.
c. currently available resources are not sufficient to produce everything people want
and need.
✅✅
d. currently available resources are sufficient to produce everything people want and
need. - -currently available resources are not sufficient to produce everything
people want and need.
"The government should raise the minimum wage" is an example of a:
a. factual statement.
b. ceteris paribus statement.
✅✅
c. positive statement.
d.normative statement. - -normative statement.
Which of the following would most likely be studied in a microeconomics course?
a. The relationship between national output and the rate of unemployment
b. The strategy used by the owners of a competitive firm to maximize profits
c. The relationship between the national money supply and the price level
✅✅
d. The strategy used by the Federal Reserve, the nation's central bank, to lower
interest rates - -The strategy used by the owners of a competitive firm to
maximize profits
Incorrectly concluding that because tax reform measures benefit some individuals,
the
measures are also beneficial for the economy as a whole is an example of the:
a. post hoc fallacy (association-causation issue).
b. fallacy of division.
✅✅
c. fallacy of false cause.
d. fallacy of composition. - -fallacy of composition.
Which of the following is not an example of the factor of production or economic
resource referred to as capital?
a. An office building
b. Computers used by a tax preparation business
✅✅
c. Lawn mowers owned by a landscaping firm
d.Money used to start a new business - -Money used to start a new business
The opportunity cost of attending school is:
a. the same for all people.
b. highest for people who gave up good jobs to attend school.
✅✅
c. highest for people who continue to work while attending school.
d. equal to the tuition charged by each school. - -highest for people who gave
up good jobs to attend school.
,A command economy is characterized by:
a. decentralized decisions about how to allocate resources.
b. government ownership or control of most resources.
✅✅
c. voluntary exchange and incentives to exchange.
d. efficient allocation of scarce resources. - -government ownership or control
of most resources.
The business sector sells goods and services in the product market in order to
generate
_____, which then creates _____ for the household sector.
a. costs; revenue
b. revenue; income
✅✅
c. profit; costs
d. costs; profit - -revenue; income
A country experiences a trade deficit when:
a. the value of exports exceeds the value of imports.
b. some of the goods and services produced in the business sector are exported.
c. the value of imports exceeds the value of exports.
✅✅
d. some of the goods and services purchased by the household sector are imported.
- -the value of imports exceeds the value of exports.
A rightward shift of a production possibilities frontier (curve) indicates that:
a. economic activity is declining.
b. economic growth has occurred.
✅✅
c. opportunity costs are decreasing.
d. opportunity costs are constant. - -economic growth has occurred.
Protectionist policies are designed to:
a. restrict imports so domestic consumers are able to pay lower prices.
b. increase imports so domestic consumers are able to pay lower prices.
c. restrict imports so it is easier for domestic firms to compete with foreign firms.
✅✅
d. increase imports so it is easier for domestic firms to compete with foreign firms. -
-restrict imports so it is easier for domestic firms to compete with foreign firms.
Two parties can enjoy gains from trade by specializing in the activities for which:
a. an absolute advantage exists.
b. a comparative advantage exists.
✅✅
c. an unlimited market exists.
d. a stratified market exists. - -a comparative advantage exists.
If country A can produce coffee at a lower opportunity cost than country B, then:
a. country A has an absolute advantage in the production of coffee.
, b. country B has an absolute advantage in the production of coffee.
✅✅-country
c. country A has a comparative advantage in the production of coffee.
d.country B has a comparative advantage in the production of coffee. -
A has a comparative advantage in the production of coffee.
According to the law of demand, an increase in the price of personal computers will,
ceteris paribus, lead to:
a. an increase in the demand for personal computers.
b. a decrease in the demand for personal computers.
✅✅
c. an increase in the quantity demanded of personal computers.
d. a decrease in the quantity demanded of personal computers. - -a decrease
in the quantity demanded of personal computers.
All of the following will lead to an increase in the demand for jeans except:
an increase in income, assuming jeans are normal goods.
a decrease in the price of khakis, assuming khakis are substitutes for jeans.
✅✅-a
an increase in the popularity of jeans.
an increase in the number of schools that allow students to wear jeans. -
decrease in the price of khakis, assuming khakis are substitutes for jeans.
Which of the following would best explain a decrease in the demand for shrimp?
a. An increase in consumer income, assuming shrimp is a normal good
b. A decrease in the price of crab legs (a substitute for shrimp)
✅✅
c. An increase in the price of shrimp
d. A decrease in the price of shrimp - -A decrease in the price of crab legs (a
substitute for shrimp)
An increase in the quantity supplied of haircuts is most likely to occur as a result of:
a. a decrease in the supply of baseball caps.
b. an increase in the popularity of long hair.
✅✅
c. an increase in the price of haircuts.
d. an increase in cost of getting a license to cut hair. - -an increase in the price
of haircuts.
Which of the following would best explain a decrease in the supply of bicycles?
a. An increase in the price of bicycles
b. A decrease in the price of bicycles
✅✅
c. An increase in the popularity of bicycling
d. A decrease in the number of bicycle manufacturers - -A decrease in the
number of bicycle manufacturers
Technological improvements that reduce the cost of manufacturing personal
computers combined with a decrease in the demand for personal computers results
in:
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