Question · Which of the following represents

04 Jun Question · Which of the following represents

Question
· Which of the following represents the relationship between disposable income (DI), consumption (C), and saving (S)?
Question
1) Economics is the study of
A) how to invest in the stock market.
B) how society uses limited resources.
C) the role of money in markets.
D) how government officials decide which goods and services are produced.
Answer:

2) Deciding how a society’s products are distributed among its citizens answers the economic question of
A) who consumes the products produced.
B) what products will be produced.
C) where will the products be consumed.
D) how will the products be produced.
Answer:

3) If the vertical variable increases by 12 and the horizontal variable increases by 4, the slope of the line is
A) 3.
B) 4.
C) 12.
D) 48.
Answer:

4) Suppose that your tuition to attend college is $16,000 per year and you spend $6,000 per year on room and board. If you were working full time, you could earn $20,000 per year. What is your opportunity cost of attending college for one year?
A) $22,000
B) $26,000
C) $36,000
D) $42,000
Answer:

5) The principle of diminishing returns implies that as one input increases while the other inputs are held fixed, output
A) increases at an increasing rate.
B) increases at a decreasing rate.
C) decreases at a decreasing rate.
D) decreases at an increasing rate.
Answer:

Bracelets /hour Pendants /hour
Celia 10 2
Sondra 4 1

6) Consider two individuals, Celia and Sondra, who produce bracelets and pendants. Table 3.1 shows how much of each good Celia and Sondra can produce in one hour. Sondra’s opportunity cost of one pendant is
A) 2 bracelets.
B) 4 bracelets.
C) 5 bracelets.
D) 10 bracelets.
Answer:

7) The Law of Demand can be explained as
A) a lot of people wanting the same thing.
B) the higher the price, the smaller the quantity demanded, ceteris paribus.
C) people are willing to make limited sacrifices to acquire products.
D) legal reasons people make purchases in the marketplace.
Answer:

8) Figure 4.3 illustrates the demand for tacos. Assume tacos are an inferior good. An increase in income would bring about a movement from
A) point b to point c.
B) point b to point a.
C) D1 to D0.
D) D1 to D2.
Answer:

9) The price of pens increases from $2 to $2.20. At the same time, the quantity of pens demanded decreases from 100 to 90. Demand for pens is:
A) perfectly inelastic.
B) inelastic.
C) unitary elastic.
D) elastic.
Answer:

10) Draw the demand curve for a good whose price elasticity of demand is equal to zero. Be sure to label both axes. Explain what the graph represents.
Answer:

o

DI + C = S

o

DI = C * S

o

DI = C – S

o

DI = C + S

· Which of the following is NOT a method for promoting global economic growth?

o

Count on the world’s governments to develop policies that promote economic growth in developing nations.

o

Reliance on private markets to direct capital goods toward their best use.

o

Encourage population growth so that developing nations’ labor supply increases.

o

Market based approach.

· In the classical model, an increase in aggregate demand will cause

o

a decrease in price level.

o

an increase in actual output, or Gross Domestic Product (GDP).

o

an increase in price level.

o

a decrease in actual output, or Gross Domestic Product (GDP).

· Of the relationships below, which is the least stable?

o

Consumption

o

Net exports

o

Investment

o

Saving

· When investment occurs in developing nations

o

investors hope to gain significant returns on their investment and residents gain higher rates of economic growth.

o

significant levels of pollution usually occur.

o

government politicians usually benefit from the illegal payments made to secure the investment.

o

higher rates of economic growth are usually not achieved.

· A multinational agency that specializes solely in making loans to promote long-term development and growth in developing countries is the

o

Federal Reserve System.

o

International Monetary Fund.

o

International World Fund.

o

World Bank.

· The Board of Governors of the Federal Reserve System is

o

composed of seven members who are appointed by the President and approved by the Senate.

o

elected by the general public.

o

composed of 12 members of the Senate and the U.S. House of Representatives.

o