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1) Suppose that you purchased a ticket to the symphony for $40 fro.docxdorishigh
1) Suppose that you purchased a ticket to the symphony for $40 from an online ticket broker. Once you arrived at the symphony, you discovered that parking costs you an additional $10. In this situation, the additional $10 you pay for parking is an example of
A) an inefficient cost.
B) marginal cost.
C) opportunity cost.
D) an economic loss.
2) Opportunity cost is
A) the additional cost incurred from the consumption of one more unit of output.
B) the cost involved when choosing between alternatives.
C) the cost of production which cannot be recaptured.
D) the total cost incurred from the consumption of additional output.
3) As an individual consumes ________ of a product within a given period of time, it is likely that each additional unit consumed will yield ________ satisfaction.
A) more; successively more
B) more; successively less
C) more; no additional
D) less; negative
Refer to the information provided in Figure 3.1 below to answer the questions that follow.
Figure 3.1
4) Refer to Figure 3.1. Which of the following would be most likely to cause the demand for Dr. Pepper to shift from D0 to D1?
A) an increase in income, assuming that Dr. Pepper is a normal good
B) a decrease in the price of 7-UP, assuming 7-UP is a substitute for Dr. Pepper
C) an increase in the price of Dr. Pepper
D) an increase in the price of sugar used to make Dr. Pepper
5) If the price of spinach decreases, there will be ________ of spinach enchiladas.
A) an increase in the supply
B) a decrease in the supply
C) an increase in the quantity supplied
D) a decrease in the quantity supplied
Refer to the information provided in Figure 3.15 below to answer the questions that follow.
Figure 3.15
6) Refer to Figure 3.15. A decrease in the wage rate of gardenburger makers will cause a movement from Point B on supply curve S2 to
A) Point A on supply curve S2.
B) Point C on supply curve S2.
C) supply curve S3.
D) supply curve S1.
Refer to the information provided in Table 3.2 below to answer the questions that follow.
Table 3.2
Price per Cheeseburger
Quantity Demanded (Cheeseburgers per Month)
Quantity Supplied (Cheeseburgers per Month)
$5
1,500
500
6
1,200
700
7
900
900
8
600
1,100
9
300
1,300
7) Refer to Table 3.2. This market will be in equilibrium if the quantity of cheeseburgers demanded is
A) 300.
B) 600.
C) 900.
D) 1,200.
8) Refer to Table 3.2. If the price per cheeseburger is $5, the price will
A) remain constant because the market is in equilibrium.
B) decrease because there is an excess demand in the market.
C) increase because there is an excess demand in the market.
D) decrease because there is an excess supply in the market.
Refer to the information provided in Figure 3.13 below to answer the questions that follow.
Figure 3.13
9) Refer to Figure 3.13. The market is initially in equilibrium at Point A. If supply shifts from S1 to S2 and there is an excess demand of 6 cheeseburgers, the price of cheeseburgers will hav ...
QEP Post Math Part 2 — Answers Questions 1-15 on a separate 10.docxamrit47
QEP Post Math Part 2 — Answers Questions 1-15 on a separate 101864 Par L par score
QEP Post Math Part 2 — Answers Questions 1-15 on a separate 101864 Par L par
Name:___________________________________ Banner:__________________________________
1) Suppose you decide to attend summer school and that this is considered a rational choice. When making this
choice,
A) you have made a positive statement.
B) you have used the ceteris paribus assumption.
C) you must have considered the social interest.
D) you must ignore the problem of scarcity.
E) you considered the marginal cost and marginal benefit of your choice.
2) The expenditure approach to measuring GDP is done by using data on only
A) consumption expenditure and investment.
B) wages, rent, interest, and profit.
C) consumption expenditure, investment, government expenditure on goods and services, and net exports
of goods and services.
D) consumption expenditure.
E) consumption expenditure, investment, and government expenditures.
3) The largest expenditure category in the United States is
A) net exports of goods and services.
B) investment.
C) wages.
D) consumption expenditure.
E) government expenditure on goods and services.
4) Economic growth is a sustained expansion of production possibilities, as measured by the increase in
________ over time.
A) population
B) the price level
C) inflation
D) employment
E) real GDP
5) The "value of money"
A) is the quantity of goods and services that a unit of money can buy.
B) increases during inflationary periods.
C) is directly related to the price level.
D) increases during economic expansions.
E) is determined by Fed regulations.
6) If the quantity of money supplied ________ the quantity demanded, in the long run the value of money
________.
A) exceeds; falls as people spend their surplus money
B) is less than; does not change unless the Fed increases the money supply
C) equals; equals zero
D) is less than; falls as people spend their surplus money
E) exceeds; rises as people buy bonds
7) Inflation is a tax because as the government ________ the quantity of money, the price level ________, and
the purchasing power of households' money ________.
A) decreases; rises; decreases
B) decreases; falls; decreases
C) increases; rises; decreases
D) does not change; rises; increases
E) increases; rises; increases
Figure 3-1
8) Refer to Figure 3-1. If the product represented is an inferior good, an increase in income would be
represented by a movement from
A) B to A. B) A to B. C) D2 to D1. D) D1 to D2.
9) Refer to Figure 3-1. A decrease in the price of the product would be represented by a movement from
A) D2 to D1. B) B to A. C) A to B. D) D1 to D2.
10) Suppose that when the price of raspberries increases, Lonnie increases his ...
1.The aggregate supply curve relating the price level to real GDP.docxherminaprocter
1.
The aggregate supply curve relating the price level to real GDP has three distinguishing segments. Which one of the following indicates the segments?
A) The horizontal segment reflects the increasing pressure on the price level as firms bid for resources. The upward-sloping segment reflects the availability of unused resources. The vertical segment reflects the full employment of all resources.
B) The horizontal segment reflects the availability of unused resources. The upward-sloping segment reflects the full employment of all resources. The vertical segment reflects the increasing pressure on the price level as firms bid for resources.
C) The horizontal segment reflects the full employment of all resources. The upward-sloping segment reflects the increasing pressure on the price level as firms bid for resources. The vertical segment reflects the availability of unused resources.
D) The horizontal segment reflects the availability of unused resources. The downward-sloping segment reflects decreasing pressure on the price level as firms bid for resources. The vertical segment reflects the full employment of all resources.
E) The horizontal segment reflects the availability of unused resources. The upward-sloping segment reflects increasing pressure on the price level as firms bid for resources. The vertical segment reflects the full employment of all resources.
2.
Fiscal policy is government action to influence aggregate demand and in turn to influence the level of real GDP and the price level, through:
A) expanding and contracting the money supply.
B) regulation of net exports.
C) changes in government spending and/or tax revenues.
D) encouraging businesses to invest.
3.
"It would be an undue hardship to require people whose income is below $15,000 per year to pay income taxes." This statement reflects which of the following principles for a tax?
A) Benefits-received.
B) Inexpensive-to-collect.
C) Ability-to-pay.
D) Fairness of contribution.
4.
Exhibit 14-6 Aggregate supply curve
nar004-1.jpg
In Exhibit 14-6, the aggregate supply curve becomes vertical at GDP = $1,200 because:
A) there are no more workers available at any wage rate to increase real GDP.
B) the price level remains constant.
C) the only workers available would demand higher wage rates.
D) the economy is experiencing low employment and low production.
E) the Treasury is no longer allowed to explain away the deficit with creative accounting
5.
Exhibit 14-8 Aggregate demand and supply
nar005-1.jpg
In Exhibit 14-8, if aggregate demand shifts from AD3 to AD4, real GDP will:
A) rise from $7.0 to $8.0, and the price level will rise from 120 to 140.
B) rise from $7.0 to $8.0, and the price level will rise from 120 to 170.
C) rise from $7.0 to $8.0, and the price level will rise from 100 to 140.
D) not change, and the price level will rise from 120 to 140.
E) rise from $4.0 to $8.0, and the price level will rise from 120 to 140.
6.
The m.
South UniversityVirginia Beach CampusECO2071Name ________.docxwilliame8
South University
Virginia Beach Campus
ECO2071
Name: ____________________________________________
Score: ______________
Select the CORRECT answer to each question. Each question is worth 2 points.
1. Economics is the study of how society manages its
a.
limited wants and unlimited resources.
b.
unlimited wants and unlimited resources.
c.
limited wants and limited resources.
d.
unlimited wants and limited resources.
2. The terms equality and efficiency are similar in that they both refer to benefits to society. However they are different in that
a.
equality refers to uniform distribution of those benefits and efficiency refers to maximizing benefits from scarce resources.
b.
equality refers to maximizing benefits from scarce resources and efficiency refers to uniform distribution of those benefits.
c.
equality refers to everyone facing identical tradeoffs and efficiency refers to the opportunity cost of the benefits.
d.
equality refers to the opportunity cost of the benefits and efficiency refers to everyone facing identical tradeoffs.
3. Senator Bright, who understands economic principles, is trying to convince workers in her district that trade with other countries is beneficial. Senator Bright should argue that trade can be beneficial
a.
only if it allows us to obtain things that we couldn't make for ourselves.
b.
because it allows specialization, which increases total output.
c.
to us if we can gain and the others involved in the trade lose.
d.
in only a limited number of circumstances because others are typically self-interested.
4. A direct or positive relationship exists between a country's
a.
productivity and its standard of living.
b.
amount of government spending and its productivity.
c.
total population and its average citizen’s income.
d.
rate of population growth and the extent of its trade with other countries.
5. Economists, like mathematicians, physicists, and biologists,
a.
make use of the scientific method.
b.
try to address their subject with a scientist’s objectivity.
c.
devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories.
d.
All of the above are correct.
6. Which of the following is an example of a positive, as opposed to normative, statement?
a.
Inflation is more harmful to the economy than unemployment is.
b.
If welfare payments increase, the world will be a better place.
c.
Prices rise when the government prints too much money.
d.
When public policies are evaluated, the benefits to the economy of improved equality should be considered more important than the costs of reduced efficiency.
7. Which of the following is an example of a normative, as opposed to positive, statement?
a.
Universal health care would be good for U.S. citizens.
b.
An increase in the cigarette tax would cause a decrease in the number of smokers.
c.
A decrease in the minimum wage would decrease unemployment.
d.
A law requiri.
1. The market for ice cream isa.a monopolistic market.b.a h.docxjackiewalcutt
1. The market for ice cream is
a. a monopolistic market.
b. a highly competitive market.
c. a highly organized market.
d. both (b) and (c) are correct.
2.An increase in quantity demanded
a. results in a movement downward and to the right along a fixed demand curve.
b. results in a movement upward and to the left along a fixed demand curve.
c. shifts the demand curve to the left.
d. shifts the demand curve to the right.
Figure 3
3. Refer to Figure 3. At a price of $15,
a. quantity demanded exceeds quantity supplied.
b. there is a shortage.
c. there is an excess demand.
d. All of the above are correct.
Figure 4
The diagram below pertains to the supply of paper in university markets.
4. Refer to Figure 4. All else equal, an increase in the use of laptop computers for note-taking would cause a move
a. from x to y.
b. from y to x.
c. from SA to SB.
d. from SB to SA.
5. When demand is inelastic the price elasticity of demand is
a. less than 1, and price and total revenue will move in the same direction.
b. less than 1, and price and total revenue will move in opposite directions.
c. greater than 1, and price and total revenue will move in the same direction.
d. greater than 1, and price and total revenue will move in opposite directions.
6. A price floor will be binding only if it is set
a. equal to the equilibrium price.
b. above the equilibrium price.
c. below the equilibrium price.
d. either above or below the equilibrium price.
7. When a tax is placed on the buyers of cell phones,
a. the size of the cell phone market and the price paid by buyers both decrease.
b. the size of the cell phone market decreases, but the price paid by buyers increases.
c. the size of the cell phone market increases, but the price paid by buyers decreases.
d. the size of the cell phone market and the price paid by buyers both increase.
8. Which of the following statements is correct?
a. For all firms, marginal revenue equals the price of the good.
b. Only for competitive firms does average revenue equal the price of the good.
c. Marginal revenue can be calculated as total revenue divided by the quantity sold.
d. Only for competitive firms does average revenue equal marginal revenue.
9. When a profit-maximizing firm is earning profits, those profits can be identified by
a. P Q.
b. (MC - AVC) Q.
c. (P - ATC) Q.
d. (P - AVC) Q.
Scenario
Consider a transportation corporation named C.R. Evans that has just completed the development of a new subway system in a medium-sized town in the Northwest. Currently, there are plenty of seats on the subway, and it is never crowded. Its capacity far exceeds the needs of the city. After just a few years of operation, the shareholders of C.R. Evans experienced incredible rates of return on their investment, due to the profitability of the corporation.
10. Refer to Scenario above: C.R. Evans will continue to be a monopolist in the subway transportation industry only ...
Page 1 of 17 ECON 201 Introduction to Macroeconomics .docxalfred4lewis58146
Page 1 of 17
ECON 201: Introduction to Macroeconomics
Final Exam
December 5, 2011
NAME: _________________________________
Circle your TA’s name: Agustin Brian Meysam
Circle your section time: 9 a.m. 3 p.m.
INSTRUCTIONS:
1. The exam lasts 2 hours.
2. The exam is worth 120 points in total: 45 points for the multiple choice questions (Part A), and
75 points for the six analytical problems (Part B).
3. Write your answers for part A (the multiple choice section) in the blanks below. You won’t
get credit for circled answers in the multiple choice section. There is no penalty to guessing, so
be sure to answer all of them.
4. Place all of your answers for part B in the space provided.
5. You must show your work for part B questions. There is no need to explain your answers for the
multiple choice questions.
6. Calculators are permitted. Books, notes, reference materials, etc. are prohibited.
7. Good luck!
PART A: Multiple Choice Problems. Answer multiple choice questions in the space provided
below. PLEASE USE CAPITAL LETTERS.
1 11 21 31 41
2 12 22 32 42
3 13 23 33 43
4 14 24 34 44
5 15 25 35 45
6 16 26 36
7 17 27 37
8 18 28 38
9 19 29 39
10 20 30 40
MC Q1 Q2 Q3 Q4 Q5 Q6 Total
Page 2 of 17
Part A. Multiple Choice Questions (45 points)
1. Money is
A) backed by gold in Fort Knox.
B) the same as income.
C) the value of all coins and currency in circulation at any time.
D) anything that is generally accepted as a medium of exchange.
2. The development of money as a medium of exchange has facilitated the expansion of trade because
A) holding money increases people's income.
B) no other mediums of exchange are available.
C) money eliminates the "double coincidence of wants" problem.
D) holding money increases people's wealth.
3. The price of bonds and the interest rate are
A) not related.
B) positively related.
C) negatively related.
D) sometimes positively related and other times negatively related, depending on the bond payments.
4. As the interest rate falls, people hold ________ money instead of bonds because the opportunity cost of
holding money has ________.
A) more; fallen
B) more; risen
C) less; fallen
D) less; risen
5. The lecture and readings explain the recent rise in food prices by
A) Subsidies to ethanol
B) Economic growth in China
C) Economic growth in the US
D) Quotas on corn imports
E) A) and B)
F) A) and D)
6. An example of a contractionary monetary policy is
A) an increase in the required reserve ratio.
B) a reduction in the taxes banks pay on their profits.
C) a decrease in the discount rate.
D) the Fed buying government securities in the open market.
7. Which of the following sequence of events follows an expansionary monetary policy?
A) r↓ ⇒ I↓ ⇒ AE↓ ⇒ Y↓.
B) r↑ ⇒ I↑ ⇒ AE↓ ⇒ Y↑.
C) r↑ ⇒ I↓ ⇒ AE↓ ⇒ Y↓.
D) r↓ ⇒ I↑ ⇒ AE↑ ⇒ Y↑.
Page 3 of 17
.
1. Carolyn spends $2.50 for a hamburger at a restaurant. Which.docxjackiewalcutt
1. Carolyn spends $2.50 for a hamburger at a restaurant. Which of the following would be included in the gross domestic product?
A) The $2.50 Carolyn spends for the hamburger
B) The price the restaurant paid for the meat in the hamburger
C) The price the restaurant paid for the bun
D) all of the above
E) none of the above
2. Most goods and services included in the U.S. gross domestic product are bought by
A) businesses in the United States
B) state, local, and federal governments in the United States
C) people and businesses in other nations
D) consumers in the United states
E) none of the above
3. Which of the following makes an adjustment for both inflation and population change?
A) the consumer price index
B) the unemployment rate
C) real GDP per capita
D) final goods and services
E) all of the above
4. A nation’s standard of living will rise if
A) GDP and population increase at the same rate
B) real GDP per capita increases
C) population increases more than GDP
D) production and consumption decrease
E) all of the above
5. Productivity is
A) a measure of the total amount of goods manufactured.
B) a measure of how much output is produced per unit of input.
C) an unimportant statistic commonly ignored by economists.
D) an important measure of how the U.S. economy is doing.
E) B and D.
6. A nation’s productivity is directly affected by
A) the education of its labor force.
B) the amount of physical capital used.
C) the level of innovation used.
D) all of the above
E) none of the above
7. A farmer produces wheat and sells it for $.50. A miller buys the wheat, grinds it into flour, and sells the flour for $1.00. A baker buys the flour, produces a loaf of bread, and sells it to a consumer for $2.00. The amount added to gross domestic product in this example is
A) 50 cents
B) $1.00
C) $2.00
D) $3.50
E) none of the above
8. In the U.S. economy, the total value of goods and services produced per year is measured by
A) the gross domestic product.
B) the consumer price index.
C) the productivity of labor.
D) the Dow Jones Industrial Average.
E) none of the above
9. Which of the following best summarizes the key elements used to calculate the gross domestic product (GDP) of the United States using the expenditure approach?
A) business inventories, net imports, balance of payments
B) disposable income, consumer spending, housing starts
C) unemployment, factory wages, personal consumption, personal income
D) consumer spending, business investment, government spending, net exports
E) none of the above
10. A recession is said to occur when real gross domestic product (GDP) declines for a period of at least
A) two days
B) two weeks
C) two months
D) two quarters
E) two years
11. The consumer price index (CPI) is used to measure
A) inflation.
B) productivity.
C) gross domestic product.
D) structural unemployment.
E) all of the above
12. Which of the following best describes the difference between GDP and real GDP?
A) unlike GDP, real GDP measures only the val ...
The French Revolution, which began in 1789, was a period of radical social and political upheaval in France. It marked the decline of absolute monarchies, the rise of secular and democratic republics, and the eventual rise of Napoleon Bonaparte. This revolutionary period is crucial in understanding the transition from feudalism to modernity in Europe.
For more information, visit-www.vavaclasses.com
1) Suppose that you purchased a ticket to the symphony for $40 fro.docxdorishigh
1) Suppose that you purchased a ticket to the symphony for $40 from an online ticket broker. Once you arrived at the symphony, you discovered that parking costs you an additional $10. In this situation, the additional $10 you pay for parking is an example of
A) an inefficient cost.
B) marginal cost.
C) opportunity cost.
D) an economic loss.
2) Opportunity cost is
A) the additional cost incurred from the consumption of one more unit of output.
B) the cost involved when choosing between alternatives.
C) the cost of production which cannot be recaptured.
D) the total cost incurred from the consumption of additional output.
3) As an individual consumes ________ of a product within a given period of time, it is likely that each additional unit consumed will yield ________ satisfaction.
A) more; successively more
B) more; successively less
C) more; no additional
D) less; negative
Refer to the information provided in Figure 3.1 below to answer the questions that follow.
Figure 3.1
4) Refer to Figure 3.1. Which of the following would be most likely to cause the demand for Dr. Pepper to shift from D0 to D1?
A) an increase in income, assuming that Dr. Pepper is a normal good
B) a decrease in the price of 7-UP, assuming 7-UP is a substitute for Dr. Pepper
C) an increase in the price of Dr. Pepper
D) an increase in the price of sugar used to make Dr. Pepper
5) If the price of spinach decreases, there will be ________ of spinach enchiladas.
A) an increase in the supply
B) a decrease in the supply
C) an increase in the quantity supplied
D) a decrease in the quantity supplied
Refer to the information provided in Figure 3.15 below to answer the questions that follow.
Figure 3.15
6) Refer to Figure 3.15. A decrease in the wage rate of gardenburger makers will cause a movement from Point B on supply curve S2 to
A) Point A on supply curve S2.
B) Point C on supply curve S2.
C) supply curve S3.
D) supply curve S1.
Refer to the information provided in Table 3.2 below to answer the questions that follow.
Table 3.2
Price per Cheeseburger
Quantity Demanded (Cheeseburgers per Month)
Quantity Supplied (Cheeseburgers per Month)
$5
1,500
500
6
1,200
700
7
900
900
8
600
1,100
9
300
1,300
7) Refer to Table 3.2. This market will be in equilibrium if the quantity of cheeseburgers demanded is
A) 300.
B) 600.
C) 900.
D) 1,200.
8) Refer to Table 3.2. If the price per cheeseburger is $5, the price will
A) remain constant because the market is in equilibrium.
B) decrease because there is an excess demand in the market.
C) increase because there is an excess demand in the market.
D) decrease because there is an excess supply in the market.
Refer to the information provided in Figure 3.13 below to answer the questions that follow.
Figure 3.13
9) Refer to Figure 3.13. The market is initially in equilibrium at Point A. If supply shifts from S1 to S2 and there is an excess demand of 6 cheeseburgers, the price of cheeseburgers will hav ...
QEP Post Math Part 2 — Answers Questions 1-15 on a separate 10.docxamrit47
QEP Post Math Part 2 — Answers Questions 1-15 on a separate 101864 Par L par score
QEP Post Math Part 2 — Answers Questions 1-15 on a separate 101864 Par L par
Name:___________________________________ Banner:__________________________________
1) Suppose you decide to attend summer school and that this is considered a rational choice. When making this
choice,
A) you have made a positive statement.
B) you have used the ceteris paribus assumption.
C) you must have considered the social interest.
D) you must ignore the problem of scarcity.
E) you considered the marginal cost and marginal benefit of your choice.
2) The expenditure approach to measuring GDP is done by using data on only
A) consumption expenditure and investment.
B) wages, rent, interest, and profit.
C) consumption expenditure, investment, government expenditure on goods and services, and net exports
of goods and services.
D) consumption expenditure.
E) consumption expenditure, investment, and government expenditures.
3) The largest expenditure category in the United States is
A) net exports of goods and services.
B) investment.
C) wages.
D) consumption expenditure.
E) government expenditure on goods and services.
4) Economic growth is a sustained expansion of production possibilities, as measured by the increase in
________ over time.
A) population
B) the price level
C) inflation
D) employment
E) real GDP
5) The "value of money"
A) is the quantity of goods and services that a unit of money can buy.
B) increases during inflationary periods.
C) is directly related to the price level.
D) increases during economic expansions.
E) is determined by Fed regulations.
6) If the quantity of money supplied ________ the quantity demanded, in the long run the value of money
________.
A) exceeds; falls as people spend their surplus money
B) is less than; does not change unless the Fed increases the money supply
C) equals; equals zero
D) is less than; falls as people spend their surplus money
E) exceeds; rises as people buy bonds
7) Inflation is a tax because as the government ________ the quantity of money, the price level ________, and
the purchasing power of households' money ________.
A) decreases; rises; decreases
B) decreases; falls; decreases
C) increases; rises; decreases
D) does not change; rises; increases
E) increases; rises; increases
Figure 3-1
8) Refer to Figure 3-1. If the product represented is an inferior good, an increase in income would be
represented by a movement from
A) B to A. B) A to B. C) D2 to D1. D) D1 to D2.
9) Refer to Figure 3-1. A decrease in the price of the product would be represented by a movement from
A) D2 to D1. B) B to A. C) A to B. D) D1 to D2.
10) Suppose that when the price of raspberries increases, Lonnie increases his ...
1.The aggregate supply curve relating the price level to real GDP.docxherminaprocter
1.
The aggregate supply curve relating the price level to real GDP has three distinguishing segments. Which one of the following indicates the segments?
A) The horizontal segment reflects the increasing pressure on the price level as firms bid for resources. The upward-sloping segment reflects the availability of unused resources. The vertical segment reflects the full employment of all resources.
B) The horizontal segment reflects the availability of unused resources. The upward-sloping segment reflects the full employment of all resources. The vertical segment reflects the increasing pressure on the price level as firms bid for resources.
C) The horizontal segment reflects the full employment of all resources. The upward-sloping segment reflects the increasing pressure on the price level as firms bid for resources. The vertical segment reflects the availability of unused resources.
D) The horizontal segment reflects the availability of unused resources. The downward-sloping segment reflects decreasing pressure on the price level as firms bid for resources. The vertical segment reflects the full employment of all resources.
E) The horizontal segment reflects the availability of unused resources. The upward-sloping segment reflects increasing pressure on the price level as firms bid for resources. The vertical segment reflects the full employment of all resources.
2.
Fiscal policy is government action to influence aggregate demand and in turn to influence the level of real GDP and the price level, through:
A) expanding and contracting the money supply.
B) regulation of net exports.
C) changes in government spending and/or tax revenues.
D) encouraging businesses to invest.
3.
"It would be an undue hardship to require people whose income is below $15,000 per year to pay income taxes." This statement reflects which of the following principles for a tax?
A) Benefits-received.
B) Inexpensive-to-collect.
C) Ability-to-pay.
D) Fairness of contribution.
4.
Exhibit 14-6 Aggregate supply curve
nar004-1.jpg
In Exhibit 14-6, the aggregate supply curve becomes vertical at GDP = $1,200 because:
A) there are no more workers available at any wage rate to increase real GDP.
B) the price level remains constant.
C) the only workers available would demand higher wage rates.
D) the economy is experiencing low employment and low production.
E) the Treasury is no longer allowed to explain away the deficit with creative accounting
5.
Exhibit 14-8 Aggregate demand and supply
nar005-1.jpg
In Exhibit 14-8, if aggregate demand shifts from AD3 to AD4, real GDP will:
A) rise from $7.0 to $8.0, and the price level will rise from 120 to 140.
B) rise from $7.0 to $8.0, and the price level will rise from 120 to 170.
C) rise from $7.0 to $8.0, and the price level will rise from 100 to 140.
D) not change, and the price level will rise from 120 to 140.
E) rise from $4.0 to $8.0, and the price level will rise from 120 to 140.
6.
The m.
South UniversityVirginia Beach CampusECO2071Name ________.docxwilliame8
South University
Virginia Beach Campus
ECO2071
Name: ____________________________________________
Score: ______________
Select the CORRECT answer to each question. Each question is worth 2 points.
1. Economics is the study of how society manages its
a.
limited wants and unlimited resources.
b.
unlimited wants and unlimited resources.
c.
limited wants and limited resources.
d.
unlimited wants and limited resources.
2. The terms equality and efficiency are similar in that they both refer to benefits to society. However they are different in that
a.
equality refers to uniform distribution of those benefits and efficiency refers to maximizing benefits from scarce resources.
b.
equality refers to maximizing benefits from scarce resources and efficiency refers to uniform distribution of those benefits.
c.
equality refers to everyone facing identical tradeoffs and efficiency refers to the opportunity cost of the benefits.
d.
equality refers to the opportunity cost of the benefits and efficiency refers to everyone facing identical tradeoffs.
3. Senator Bright, who understands economic principles, is trying to convince workers in her district that trade with other countries is beneficial. Senator Bright should argue that trade can be beneficial
a.
only if it allows us to obtain things that we couldn't make for ourselves.
b.
because it allows specialization, which increases total output.
c.
to us if we can gain and the others involved in the trade lose.
d.
in only a limited number of circumstances because others are typically self-interested.
4. A direct or positive relationship exists between a country's
a.
productivity and its standard of living.
b.
amount of government spending and its productivity.
c.
total population and its average citizen’s income.
d.
rate of population growth and the extent of its trade with other countries.
5. Economists, like mathematicians, physicists, and biologists,
a.
make use of the scientific method.
b.
try to address their subject with a scientist’s objectivity.
c.
devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories.
d.
All of the above are correct.
6. Which of the following is an example of a positive, as opposed to normative, statement?
a.
Inflation is more harmful to the economy than unemployment is.
b.
If welfare payments increase, the world will be a better place.
c.
Prices rise when the government prints too much money.
d.
When public policies are evaluated, the benefits to the economy of improved equality should be considered more important than the costs of reduced efficiency.
7. Which of the following is an example of a normative, as opposed to positive, statement?
a.
Universal health care would be good for U.S. citizens.
b.
An increase in the cigarette tax would cause a decrease in the number of smokers.
c.
A decrease in the minimum wage would decrease unemployment.
d.
A law requiri.
1. The market for ice cream isa.a monopolistic market.b.a h.docxjackiewalcutt
1. The market for ice cream is
a. a monopolistic market.
b. a highly competitive market.
c. a highly organized market.
d. both (b) and (c) are correct.
2.An increase in quantity demanded
a. results in a movement downward and to the right along a fixed demand curve.
b. results in a movement upward and to the left along a fixed demand curve.
c. shifts the demand curve to the left.
d. shifts the demand curve to the right.
Figure 3
3. Refer to Figure 3. At a price of $15,
a. quantity demanded exceeds quantity supplied.
b. there is a shortage.
c. there is an excess demand.
d. All of the above are correct.
Figure 4
The diagram below pertains to the supply of paper in university markets.
4. Refer to Figure 4. All else equal, an increase in the use of laptop computers for note-taking would cause a move
a. from x to y.
b. from y to x.
c. from SA to SB.
d. from SB to SA.
5. When demand is inelastic the price elasticity of demand is
a. less than 1, and price and total revenue will move in the same direction.
b. less than 1, and price and total revenue will move in opposite directions.
c. greater than 1, and price and total revenue will move in the same direction.
d. greater than 1, and price and total revenue will move in opposite directions.
6. A price floor will be binding only if it is set
a. equal to the equilibrium price.
b. above the equilibrium price.
c. below the equilibrium price.
d. either above or below the equilibrium price.
7. When a tax is placed on the buyers of cell phones,
a. the size of the cell phone market and the price paid by buyers both decrease.
b. the size of the cell phone market decreases, but the price paid by buyers increases.
c. the size of the cell phone market increases, but the price paid by buyers decreases.
d. the size of the cell phone market and the price paid by buyers both increase.
8. Which of the following statements is correct?
a. For all firms, marginal revenue equals the price of the good.
b. Only for competitive firms does average revenue equal the price of the good.
c. Marginal revenue can be calculated as total revenue divided by the quantity sold.
d. Only for competitive firms does average revenue equal marginal revenue.
9. When a profit-maximizing firm is earning profits, those profits can be identified by
a. P Q.
b. (MC - AVC) Q.
c. (P - ATC) Q.
d. (P - AVC) Q.
Scenario
Consider a transportation corporation named C.R. Evans that has just completed the development of a new subway system in a medium-sized town in the Northwest. Currently, there are plenty of seats on the subway, and it is never crowded. Its capacity far exceeds the needs of the city. After just a few years of operation, the shareholders of C.R. Evans experienced incredible rates of return on their investment, due to the profitability of the corporation.
10. Refer to Scenario above: C.R. Evans will continue to be a monopolist in the subway transportation industry only ...
Page 1 of 17 ECON 201 Introduction to Macroeconomics .docxalfred4lewis58146
Page 1 of 17
ECON 201: Introduction to Macroeconomics
Final Exam
December 5, 2011
NAME: _________________________________
Circle your TA’s name: Agustin Brian Meysam
Circle your section time: 9 a.m. 3 p.m.
INSTRUCTIONS:
1. The exam lasts 2 hours.
2. The exam is worth 120 points in total: 45 points for the multiple choice questions (Part A), and
75 points for the six analytical problems (Part B).
3. Write your answers for part A (the multiple choice section) in the blanks below. You won’t
get credit for circled answers in the multiple choice section. There is no penalty to guessing, so
be sure to answer all of them.
4. Place all of your answers for part B in the space provided.
5. You must show your work for part B questions. There is no need to explain your answers for the
multiple choice questions.
6. Calculators are permitted. Books, notes, reference materials, etc. are prohibited.
7. Good luck!
PART A: Multiple Choice Problems. Answer multiple choice questions in the space provided
below. PLEASE USE CAPITAL LETTERS.
1 11 21 31 41
2 12 22 32 42
3 13 23 33 43
4 14 24 34 44
5 15 25 35 45
6 16 26 36
7 17 27 37
8 18 28 38
9 19 29 39
10 20 30 40
MC Q1 Q2 Q3 Q4 Q5 Q6 Total
Page 2 of 17
Part A. Multiple Choice Questions (45 points)
1. Money is
A) backed by gold in Fort Knox.
B) the same as income.
C) the value of all coins and currency in circulation at any time.
D) anything that is generally accepted as a medium of exchange.
2. The development of money as a medium of exchange has facilitated the expansion of trade because
A) holding money increases people's income.
B) no other mediums of exchange are available.
C) money eliminates the "double coincidence of wants" problem.
D) holding money increases people's wealth.
3. The price of bonds and the interest rate are
A) not related.
B) positively related.
C) negatively related.
D) sometimes positively related and other times negatively related, depending on the bond payments.
4. As the interest rate falls, people hold ________ money instead of bonds because the opportunity cost of
holding money has ________.
A) more; fallen
B) more; risen
C) less; fallen
D) less; risen
5. The lecture and readings explain the recent rise in food prices by
A) Subsidies to ethanol
B) Economic growth in China
C) Economic growth in the US
D) Quotas on corn imports
E) A) and B)
F) A) and D)
6. An example of a contractionary monetary policy is
A) an increase in the required reserve ratio.
B) a reduction in the taxes banks pay on their profits.
C) a decrease in the discount rate.
D) the Fed buying government securities in the open market.
7. Which of the following sequence of events follows an expansionary monetary policy?
A) r↓ ⇒ I↓ ⇒ AE↓ ⇒ Y↓.
B) r↑ ⇒ I↑ ⇒ AE↓ ⇒ Y↑.
C) r↑ ⇒ I↓ ⇒ AE↓ ⇒ Y↓.
D) r↓ ⇒ I↑ ⇒ AE↑ ⇒ Y↑.
Page 3 of 17
.
1. Carolyn spends $2.50 for a hamburger at a restaurant. Which.docxjackiewalcutt
1. Carolyn spends $2.50 for a hamburger at a restaurant. Which of the following would be included in the gross domestic product?
A) The $2.50 Carolyn spends for the hamburger
B) The price the restaurant paid for the meat in the hamburger
C) The price the restaurant paid for the bun
D) all of the above
E) none of the above
2. Most goods and services included in the U.S. gross domestic product are bought by
A) businesses in the United States
B) state, local, and federal governments in the United States
C) people and businesses in other nations
D) consumers in the United states
E) none of the above
3. Which of the following makes an adjustment for both inflation and population change?
A) the consumer price index
B) the unemployment rate
C) real GDP per capita
D) final goods and services
E) all of the above
4. A nation’s standard of living will rise if
A) GDP and population increase at the same rate
B) real GDP per capita increases
C) population increases more than GDP
D) production and consumption decrease
E) all of the above
5. Productivity is
A) a measure of the total amount of goods manufactured.
B) a measure of how much output is produced per unit of input.
C) an unimportant statistic commonly ignored by economists.
D) an important measure of how the U.S. economy is doing.
E) B and D.
6. A nation’s productivity is directly affected by
A) the education of its labor force.
B) the amount of physical capital used.
C) the level of innovation used.
D) all of the above
E) none of the above
7. A farmer produces wheat and sells it for $.50. A miller buys the wheat, grinds it into flour, and sells the flour for $1.00. A baker buys the flour, produces a loaf of bread, and sells it to a consumer for $2.00. The amount added to gross domestic product in this example is
A) 50 cents
B) $1.00
C) $2.00
D) $3.50
E) none of the above
8. In the U.S. economy, the total value of goods and services produced per year is measured by
A) the gross domestic product.
B) the consumer price index.
C) the productivity of labor.
D) the Dow Jones Industrial Average.
E) none of the above
9. Which of the following best summarizes the key elements used to calculate the gross domestic product (GDP) of the United States using the expenditure approach?
A) business inventories, net imports, balance of payments
B) disposable income, consumer spending, housing starts
C) unemployment, factory wages, personal consumption, personal income
D) consumer spending, business investment, government spending, net exports
E) none of the above
10. A recession is said to occur when real gross domestic product (GDP) declines for a period of at least
A) two days
B) two weeks
C) two months
D) two quarters
E) two years
11. The consumer price index (CPI) is used to measure
A) inflation.
B) productivity.
C) gross domestic product.
D) structural unemployment.
E) all of the above
12. Which of the following best describes the difference between GDP and real GDP?
A) unlike GDP, real GDP measures only the val ...
The French Revolution, which began in 1789, was a period of radical social and political upheaval in France. It marked the decline of absolute monarchies, the rise of secular and democratic republics, and the eventual rise of Napoleon Bonaparte. This revolutionary period is crucial in understanding the transition from feudalism to modernity in Europe.
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Macroeconomics- Movie Location
This will be used as part of your Personal Professional Portfolio once graded.
Objective:
Prepare a presentation or a paper using research, basic comparative analysis, data organization and application of economic information. You will make an informed assessment of an economic climate outside of the United States to accomplish an entertainment industry objective.
2024.06.01 Introducing a competency framework for languag learning materials ...Sandy Millin
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Published classroom materials form the basis of syllabuses, drive teacher professional development, and have a potentially huge influence on learners, teachers and education systems. All teachers also create their own materials, whether a few sentences on a blackboard, a highly-structured fully-realised online course, or anything in between. Despite this, the knowledge and skills needed to create effective language learning materials are rarely part of teacher training, and are mostly learnt by trial and error.
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Operation “Blue Star” is the only event in the history of Independent India where the state went into war with its own people. Even after about 40 years it is not clear if it was culmination of states anger over people of the region, a political game of power or start of dictatorial chapter in the democratic setup.
The people of Punjab felt alienated from main stream due to denial of their just demands during a long democratic struggle since independence. As it happen all over the word, it led to militant struggle with great loss of lives of military, police and civilian personnel. Killing of Indira Gandhi and massacre of innocent Sikhs in Delhi and other India cities was also associated with this movement.
June 3, 2024 Anti-Semitism Letter Sent to MIT President Kornbluth and MIT Cor...Levi Shapiro
Letter from the Congress of the United States regarding Anti-Semitism sent June 3rd to MIT President Sally Kornbluth, MIT Corp Chair, Mark Gorenberg
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harassment and intimidation at the Massachusetts Institute of Technology (MIT). Failing to act decisively to ensure a safe learning environment for all students would be a grave dereliction of your responsibilities as President of MIT and Chair of the MIT Corporation.
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The House of Representatives will not countenance the use of federal funds to indoctrinate students into hateful, antisemitic, anti-American supporters of terrorism. Investigations into campus antisemitism by the Committee on Education and the Workforce and the Committee on Ways and Means have been expanded into a Congress-wide probe across all relevant jurisdictions to address this national crisis. The undersigned Committees will conduct oversight into the use of federal funds at MIT and its learning environment under authorities granted to each Committee.
• The Committee on Education and the Workforce has been investigating your institution since December 7, 2023. The Committee has broad jurisdiction over postsecondary education, including its compliance with Title VI of the Civil Rights Act, campus safety concerns over disruptions to the learning environment, and the awarding of federal student aid under the Higher Education Act.
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1. ECON 2105 EXAM 2
CHAPTERS 3, 4 AND 8
FALL 2014
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2. 1. What is the difference between an "increase in demand" and an "increase in
quantity demanded"?
A) There is no difference between the two terms; they both refer to a shift of
the demand curve.
B) An "increase in demand" is represented by a rightward shift of the demand
curve while an "increase in quantity demanded" is represented by a movement
along a given demand curve.
C) There is no difference between the two terms; they both refer to a movement
downward along a given demand curve.
D) An "increase in demand" is represented by a movement along a given demand
curve, while an "increase in quantity demanded" is represented by a rightward
shift of the demand curve.
2. If, in response to an increase in the price of chocolate, the quantity
demanded of chocolate decreases economists would describe this as
A) a decrease in demand.
B) a decrease in quantity demanded.
C) a change in consumer income.
D) a decrease in consumers' taste for chocolate.
3. By drawing a demand curve with ________ on the vertical axis and ________ on
the horizontal axis, economists assume that the most important determinant of
the demand for a good is the ________ of the good.
A) quantity; price; quantity
B) price; quantity; quantity
C) price; quantity; price
D) quantity; price; price
4. If a demand curve shifts to the right, then
A) demand has increased.
B) quantity demanded has increased.
C) demand has decreased.
D) quantity demanded has decreased.
5. Holding everything else constant, an increase in the price of MP3 players
will result in
A) a decrease in the quantity of MP3 players supplied.
B) a decrease in the demand for MP3 players.
C) an increase in the supply of MP3 players.
D) a decrease in the quantity of MP3 players demanded.
6. A change in all of the following variables will change the market demand for
a product except
A) the price of the product.
B) population and demographics.
C) income.
D) tastes.
7. Which of the following willshift the demand curve for a good?
A) a change in the technology used to produce the good
B) an increase in the price of the good
C) a decrease in the price of a complementary good
D) a decrease in the price of the good
8. A movement along the demand curve for toothpaste would be caused by
A) a change in the price of toothbrushes.
B) a change in consumer income.
C) a change in the price of toothpaste.
D) a change in population.
9. The ________ effect refers to the change in quantity demanded for a good that
results from the effect of a change in the good's price on consumer's purchasing
power.
A) ceteris paribus
B) population
C) substitution
3. D) income
10. If an increase in income leads to in an increase in the demand for peanut
butter, then peanut butter is
A) a neutral good.
B) a normal good.
C) a necessity.
D) a complement.
11. If an increase in income leads to a decrease in the demand for popcorn, then
popcorn is
A) an inferior good.
B) a neutral good.
C) a necessity.
D) a normal good.
Figure 3-1
12. Refer to Figure 3-1. An increase in population would be represented by a
movement from
A) A to B.
B) B to A.
C) D1 to D2.
D) D2 to D1.
13. Refer to Figure 3-1. A decrease in taste or preference would be represented
by a movement from
A) A to B.
B) B to A.
C) D1 to D2.
D) D2 to D1.
14. Refer to Figure 3-1. If the product represented is an inferior good, an
increase in income would be represented by a movement from
A) A to B.
B) B to A.
C) D1 to D2.
D) D2 to D1.
15. Refer to Figure 3-1. A decrease in the price of the product would be
represented by a movement from
A) A to B.
B) B to A.
C) D1 to D2.
D) D2 to D1.
16. Elvira decreased her consumption of bananas when the price of peanut butter
increased. For Elvira, peanut butter and bananas are
A) substitutes in consumption.
B) both inferior goods.
C) complements in consumption.
D) both luxury goods.
17. Suppose that when the price of raspberries increases, Lonnie increases his
purchases of papayas. To Lonnie,
A) raspberries and papayas are complements.
B) raspberries and papayas are inferior goods.
C) raspberries and papayas are normal goods.
D) raspberries and papayas are substitutes.
18. In January, buyers of gold expect that the price of gold will rise in
February. What happens in the gold market in January, holding all else
constant?
A) The supply curve shifts to the right.
B) The demand curve shifts to the left.
4. C) The demand curve shifts to the right.
D) The quantity demanded increases.
19. Chips and salsa are complements. If the price of salsa decreases, the demand
for chips will increase.
A) TRUE
B) FALSE
20. A normal good is a good for which the demanded increases as income
decreases, holding everything else constant.
A) TRUE
B) FALSE
21. If in the market for peaches, the supply curve has shifted to the left,
A) the supply of peaches has increased.
B) the supply of peaches has decreased.
C) the quantity of peaches supplied has increased.
D) the quantity of peaches supplied has decreased.
22. What is the difference between an "increase in supply" and an "increase in
quantity supplied"?
A) There is no difference between the two terms; they both refer to a shift of
the supply curve.
B) There is no difference between the two terms; they both refer to a movement
along a given supply curve.
C) An "increase in supply" means the supply curve has shifted to the right while
an "increase in quantity supplied" means at any given price supply has
increased.
D) An "increase in supply" means the supply curve has shifted to the right while
an "increase in quantity supplied" refers to a movement along a given supply
curve in response to an increase in price.
Figure 3-2
23. Refer to Figure 3-2. An increase in price of inputs would be represented by
a movement from
A) A to B.
B) B to A.
C) S1 to S2.
D) S2 to S1.
24. Refer to Figure 3-2. An increase in the number of firms in the market would
be represented by a movement from
A) A to B.
B) B to A.
C) S1 to S2.
D) S2 to S1.
25. Refer to Figure 3-2. An increase in the price of substitutes in production
would be represented by a movement from
A) A to B.
B) B to A.
C) S1 to S2.
D) S2 to S1.
26. Refer to Figure 3-2. A decrease in the price of the product would be
represented by a movement from
A) A to B.
B) B to A.
C) S1 to S2.
D) S2 to S1.
27. ) If a firm expects that the price of its product will be higher in the
future than it is today
A) the firm will go out of business.
5. B) the firm has an incentive to increase supply now and decrease supply in the
future.
C) the firm has an incentive to decrease quantity supplied now and increase
quantity supplied in the future.
D) the firm has an incentive to decrease supply now and increase supply in the
future.
28. A decrease in the price of GPS systems will result in
A) a smaller quantity of GPS systems supplied.
B) a larger quantity of GPS systems supplied.
C) a decrease in the demand for GPS systems.
D) an increase in the supply of GPS systems.
29. A change in supply is represented by a shift of the supply curve.
A) TRUE B) FALSE
30. An increase in the quantity of a product supplied is caused by an increase
in the price of the product.
A) TRUE B) FALSE
31. Which of the following is the correct way to describe equilibrium in a
market?
A) At equilibrium, demand equals supply.
B) At equilibrium, quantity demanded equals quantity supplied.
C) At equilibrium, market forces no longer apply.
D) At equilibrium, scarcity is eliminated.
32. Refer to Figure 3-5. At a price of $15,
A) there would be a surplus of 4 units.
B) there would be a shortage of 2 units.
C) there would be a surplus of 6 units.
D) there would be a shortage of 4 units.
33. Refer to Figure 3-5. At a price of $5, the quantity sold
A) is 2 units.
B) is 4 units.
C) is 6 units.
D) cannot be determined.
34. Refer to Figure 3-5. In a free market such as that depicted above, a
surplus is eliminated by
A) a price increase, increasing the supply and decreasing the demand.
B) a price decrease, decreasing the supply and increasing the demand.
C) a price decrease, decreasing the quantity supplied and increasing the
quantity demanded.
D) a price increase, increasing the quantity supplied and decreasing the
quantity demanded.
35. A successful marketing campaign will increase the demand for Red Bull. This
will ________ the equilibrium price and ________ the equilibrium quantity of
Red Bull.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
36.To affect the market outcome, a price ceiling
A) must be set below the black market price.
B) must be set below the legal price.
C) must be set below the price floor.
D) must be set below the equilibrium price.
37.The minimum wage is an example of a price ceiling.
A) TRUE B) FALSE
6. 38. Suppose a price floor on sparkling wine is proposed by the Health Minister
of the country of Vinyardia. What will be the likely effect on the market for
sparkling wine in Vinyardia?
A) Quantity demanded will decrease, quantity supplied will increase, and a
surplus will result.
B) Quantity demanded will increase, quantity supplied will decrease, and a
surplus will result.
C) Quantity demanded will decrease, quantity supplied will increase, and a
shortage will result.
D) Quantity demanded will increase, quantity supplied will decrease, and a
shortage will result.
39. In the economic sense, almost everything is scarce. ________ of a good or
service occurs when the quantity demanded is greater than the quantity supplied
at the current market price.
A) Scarcity
B) A shortage
C) A surplus
D) An overstock
40.Rent control is an example of
A) a subsidy for low-skilled workers.
B) a price floor.
C) a price ceiling.
D) a black market.
41. A sole proprietorship is
A) the easiest type of business to set up.
B) the most difficult type of business to set up.
C) the most expensive type of business to set up.
D) the least profitable type of business to set up.
42.Which type of business is the most difficult to set up?
A) sole proprietorship
B) partnership
C) corporation
D) There is no difference in the difficulty of establishment.
43. A corporation is the type of business has ________ government rules and
regulations affecting it.
A) no
B) the fewest
C) the most
D) only federal
44. How do a sole proprietorship and a corporation differ?
A) Proprietorships have unlimited liability while corporations have limited
liability.
B) Corporations can issue stocks and bonds, while proprietorships cannot.
C) Corporations face more taxes than do proprietorships.
D) All of these are differences between the two types of businesses.
45. Assume you set up a sole proprietorship and your lawyer tells you that as
the owner, you could stand to lose your personal wealth if the business goes
bankrupt. This means a sole proprietorship
A) faces limited liability.
B) faces unlimited liability.
C) has little chance of succeeding.
D) is not a good type of business to set up.
46. Who controls a sole proprietorship?
A) stockholders
B) bondholders
C) the owner
D) all of these
7. 47. Eighty-five percent of all firms employ ________ workers.
A) only one or two
B) fewer than 20
C) 50 or more
D) over 100
48. Which of the following is an advantage of starting a new business as a
proprietorship?
A) The owner has limited personal liability.
B) A proprietorship has few government rules and regulations to comply with.
C) Business profits are not taxed.
D) A proprietorship can easily attain additional funding.
49. Which of the following is not an advantage of starting a new business as a
corporation?
A) separation of ownership and business liability
B) enhanced ability to raise funds
C) ability to share risks
D) possibility of double taxation
50. How are corporate profits taxed in the United States?
A) Earnings are taxed first by state sales taxes and then as corporate profits
at the Federal level.
B) Earnings are taxed first as personal income then as corporate profits at the
Federal level.
C) Earnings are taxed first as corporate profits then as personal income after
dividends are paid.
D) Corporate profits are not taxed at all.
51. Which type of businesses earns the majority of profits in the United States?
A) corporations
B) partnerships
C) sole proprietorships
D) none of these
52. What is an inside director?
A) a movie director who also appears in the movie
B) a member of a corporate board of directors that is also a manager of the
business
C) the CEO that is selected by the corporation's board of directors
D) a board of director chair who has been in the job for at least three years
Topic: Corporate Structure
53. A corporation's board of directors
A) hire the managers of the corporation.
B) control the day-to-day activities of the corporation.
C) are personally liable for the debts of the corporation.
D) are the sole owners of the corporation.
54. What do economists call the situation where a hired manager does not have
the same interests as the owners of the business?
A) conquest and control
B) a financial problem
C) a principal-agent problem
D) a financial intermediary problem
55. Corporations are legally owned by their shareholders.
A) TRUE B) FALSE
56. How can a proprietorship or partnership raise funds for expansion?
A) borrow from someone or an institution willing to lend the funds
B) reinvest profit back into the business
C) take on a partner or more partners
D) Any of these would generate funds for expansion.
57. What takes place in the indirect finance market?
8. A) Part ownership of corporations is sold in the form of stocks.
B) Corporate and government bonds are sold to savers.
C) Deposits of savers are accepted and loans made to borrowers.
D) Government purchases of buildings and equipment are sold to the highest
bidder.
58. Which of the following takes place in the direct finance market?
A) Firms borrow funds from banks.
B) Deposits from savers are accumulated and loans made to borrowers.
C) Ownership in corporations is sold in the form of preferred stock.
D) Banks offer savings accounts to customers.
59. A bond is a financial security that represents
A) ownership in a corporation.
B) the portion of profits paid to shareholders.
C) the interest rate paid on a share of stock.
D) a promise to repay a fixed amount of funds.
60. What is different about buying stocks and buying bonds?
A) A stock can possibly pay dividends forever, but bonds have a fixed number of
payments.
B) Differences of opinion about a stock's future may vary considerably but there
is less difference about a bond's future.
C) The future growth of a stock is more uncertain than the payments of a bond.
D) All these are differences between stocks and bonds.
61. Which of the following is a characteristic of stock?
A) Stock represents a promise to repay a fixed amount of funds.
B) The face value or principal plus interest is repaid at a specified period of
time.
C) The length of coupon payments is fixed by the stated maturity period.
D) Stock represents ownership in a firm
62. Payments by a corporation to its shareholders are known as
A) stocks.
B) bonds.
C) coupons.
D) dividends.
63. If a corporate bond with a face value of $5,000 pays yearly coupon payments
of $100, what is the coupon rate?
A) 2%
B) 5%
C) 10%
D) 20%
64. What happens in the secondary market?
A) secondary inputs like electricity are sold
B) a corporate financial manager will raise funds for expansion of the firm
C) newly issued claims are sold by the borrowing firm to the initial buyer
D) already issued claims are sold from one investor to another
65. One of the most widely followed stock indexes in the United States is the
Dow Jones Industrial Average. This index represents
A) the stock prices of 500 large U.S. firms.
B) an over-the-counter market.
C) the stock prices of more than 4,000 U.S. firms.
D) the stock prices of 30 large U.S. corporations.
66. When the coupon rate on newly issued bonds decreases relative to older,
outstanding bonds, what happens?
A) The market price of the older bond falls in the secondary market.
B) The market price of the older bond rises in the secondary market.
C) Older bonds can still be sold at their face value.
D) Older bonds will sell for more than their face value.
9. 67. A nonmonetary opportunity cost is called a(n) ________, while a cost that
involves spending money is called a(n) ________.
A) accounting cost; explicit cost
B) implicit cost; explicit cost
C) accounting profit; economic profit
D) normal rate of return; asset
68. What is accounting profit?
A) gross revenue minus explicit costs
B) gross revenue minus implicit costs
C) gross revenue minus explicit and implicit costs
D) the same as economic profit
69. What is shown on a firm's income statement?
A) costs
B) profits
C) revenues
D) All of these are shown on a firm's income statement.
70. In response to accounting scandals in 2002, the federal government passed
legislation requiring that corporate directors have a certain level of expertise
with financial information and mandating that chief executive officers
personally certify the accuracy of financial statements. What is the name of
this legislation?
A) the Accountant Reliability Act
B) the 24th amendment to the Constitution
C) the Kennedy-Lott Act
D) the Sarbanes-Oxley Act