Reference no: EM13945680

QUESTION 1: The law of demand states that there is a direct relationship between supply and demand.

True
False

QUESTION 2: Equilibrium is a state of balance between supply and demand.

True
False

QUESTION 3: Goods are scarce for both rich and poor.

True
False

QUESTION 4: "The big corporations in this country, like ExxonMobil and GM, have deep pockets and need to be hiring more people." This is a positive statement about economic policy.

True
False

QUESTION 5: The law of supply states that there is a direct relationship between price and quantity demanded.

True
False

QUESTION 6: In the circular flow model, firms own economic resources, and householdsbuy the manufactured products and services.

True
False

QUESTION 7: Households play a dual role of providing the factors of production whilepurchasing the goods and services of firms.

True
False

QUESTION 8: Opportunity cost is the lowest valued benefit that must be sacrificed asthe result of choosing an alternative.

True
False

QUESTION 9: Scarcity denotes that our desire for a good exceeds the amount that isfreely available from nature.

True
False

QUESTION 10: Economics is a social science concerned with satisfying man's unlimitedwants with limited resources.

True
False

QUESTION 11: Joint output of individuals or nations will be maximized when goods areexchanged between parties in accordance with the law of"comparative advantage".

True
False

QUESTION 12: The production possibilities frontier assumes that the level of technologyvaries when applying the model.

True
False

QUESTION 13: Excess demand in the market will cause the price of a product to decline.

True
False

QUESTION 14: Demand is measured on the vertical axis and supply on the horizontalaxis.

True
False

QUESTION 15: A change in quantity demanded is a movement along the same demandcurve.

True
False

QUESTION 16: As globalization and world trade proliferates, individual markets withincountries' economies become more competitive.

True
False

QUESTION 17: Which growth theory compares a subsistence real wage rate to the actual real wage rate?

Classical growth theory

Inflation growth theory

Neoclassical growth theory

New growth theory

QUESTION 18: Suppose the working age population in Tiny Town is 100 people. If 25 of these people are NOT in the labor force, the ________ equals ________.

unemployment rate; 25/100 × 100

employment rate; 25/75 × 100

labor force; 75

labor force; 25/100 × 100

QUESTION 19: Suppose there is a rise in the real wage rate. As a result, the quantity of labor demanded:

increases.

decreases.

does not change because there is no change in the money wage rate.

increases only if the price level also decreases.

QUESTION 20: GDP can be computed as the sum of:

all sales that have taken place in an economy over a period of time.

the total expenditures of consumers and business over a period of time.

the total expenditures of consumption, investment, and government expenditure on goods and services over a period of time.

the total expenditures of consumption, investment, government expenditure on goods and services, and net exports over a period of time.

QUESTION 21: The real wage rate equals:

(100 x (money wage rate/price level)

(100 x (price level/money wage rate)

(money wage rate x (price level)

(money wage + (number of hours worked/(price level)

QUESTION 22: If the CPI was 121.5 at the end of 2007 and 138.3 at the end of 2008, the inflation rate over these two years was:

10.2 percent.

13.8 percent.

12.2 percent.

16.8 percent.

QUESTION 23: A movement along the production function is the result of a change in:

the quantity of labor.

technology.

capital.

interest rates.

QUESTION 24: All of the following are part of fiscal policy EXCEPT:

setting tax rates.

setting government spending.

choosing the size of the government deficit.

controlling the money supply.

QUESTION 25: Along a production possibilities frontier for real GDP and the quantity of leisure time, as leisure time increases, real GDP:

decreases.

increases.

stays the same.

could increase, decrease or stay the same.