Samplemultiplechoicequestionsformidexam(Ch:1,2,3,5)

PrinciplesofMacroeconomics,Spring2015

1.Toaneconomist,scarcitymeansthat:
A.Shortageswillalwaysexist.
B.Themarketmechanismcannotbereliedupon.
C.Aproductionpossibilitiescurvecannotaccuratelyrepresentthetradeoffbetweentwogoods.
D.Therearenotenoughresourcesavailabletosatisfyallourdesires.

2.Economicscanbedefinedasthestudyof:
A.Forwhomresourcesareallocatedtoincreaseefficiency.
B.Howsocietyspendstheincomeofindividuals.
C.Howscarceresourcesareallocatedtofulfillsociety'sgoals.
D.Whatscarceresourcesareusedtoproducegoodsandservices.

3.Macroeconomicsfocusesontheperformanceof:
A.Individualconsumers.
B.Governmentagencies.
C.Theoveralleconomy.
D.Alloftheabove.

Figure1.1
Productionpossibilitiescurve

4.Atwhichpointmightsocietybeabletoproducethiscombinationifnewresourceswerediscoveredbut
cannotproduceatwithcurrentresources?(SeeFigure1.1.)
A.A.
B.B.
C.C.
D.D.

5.Afactormarketisanyplacewhere:
A.Finishedgoodsareboughtandsold.
B.Land,labor,orcapitalisboughtandsold.
C.Finishedservicesareboughtandsold.
D.Factoriesareboughtandsold.

6.Thetermopportunitycostsreferstothe:
A.Valueofalltheoptionsgivenupwhenagoodorserviceisproduced.
B.Financialcostsofallthefactorsofproductionusedtoproduceagoodorservice.
C.Amountofresourcesusedtoproduceagoodorservice.
D.Valueofthebestoptiongivenupwhenagoodorserviceisproduced.

7.Ceterisparibus,ifbuyersexpectthepriceofsoccerballstofallinthefuture,thenrightnowthereshouldbe:
A.Anincreaseinthedemandforsoccerballs.
B.Adecreaseinthesupplyofsoccerballs.
C.Adecreaseinthedemandforsoccerballs.
D.Nochangeinthesupplyofordemandforsoccerballssincethepriceisnotchangingrightnow.

8.Whichofthefollowingeventswouldcausearightwardshiftinthemarketsupplycurveforautomobiles?
A.Atechnologicalimprovementwhichreducesthecostofproduction.
B.Anincreaseinthewagesofautoworkers.
C.Ahighersalestaxonautomobiles.
D.Adecreaseinthenumberofsellers.

9.Ifthereisasurplusatagivenprice,then:
A.Themarketisinequilibriumatthatprice.
B.Thatpriceisgreaterthantheequilibriumprice.
C.Thatpriceislowerthantheequilibriumprice.
D.Thepriceiszero.

10.Assumemilkisusedtoproduceicecream.Ceterisparibus,adecreaseinthepriceofmilkwillcausethe
equilibriumpriceoficecreamto:
A.Increaseandtheequilibriumquantityoficecreamtoincrease.
B.Increaseandtheequilibriumquantityoficecreamtodecrease.
C.Decreaseandtheequilibriumquantityoficecreamtoincrease.
D.Decreaseandtheequilibriumquantityoficecreamtodecrease.

11.Thetotalmarketvalueofallfinalgoodsandservicesproducedwithinanation'sbordersinagiventime
periodis:
A.Intermediategoods.
B.GNP.
C.GDP.
D.PriceIndex.

12.Supposeyouvolunteertohelpcleanupyourneighborhoodandtheonlypaymentyoureceiveisthesenseof
goodwillthatdevelopswithyourneighbors.YoureffortscausetheGDPoftheeconomyto:
A.Remainunchanged.
B.Fallbytheopportunitycostofthetimeyouspenddoingvolunteerwork.
C.Risebytheopportunitycostofthetimespentbyallofthepeopleintheneighborhoodonthevolunteer
project.
D.Risebythevalueofincreasedcleanlinessoftheneighborhood.

13.Afurniturefactoryproducesdiningroomsets.Thelumbertheypurchasefromthelumberyardisa/an:
A.Factorofproduction.
B.Finalgood.
C.Intermediategood.
D.Service.

14.RealGDPismoreaccuratethannominalGDPinmakingcomparisonsofoutputovertimebecause:
A.NominalGDPcanincreasesimplybecauseofpriceincreasesovertime.
B.RealGDPisnotaffectedbyoutputchanges.
C.NominalGDPisthehypotheticaloutputthatwouldbeproducedatfullemployment.
D.RealGDPisnotaffectedbychangesinproductivityorthesizeofthelaborforce.

15.IfnominalGDPwas$11,500billionin2003andthepricelevelin2003was111.6,thenrealGDPwould
havebeenapproximately:
A.$9,795billion.
B.$10,305billion.
C.$10,485billion.
D.$9,750billion.

16.Theeconomicdefinitionofinvestmentincludesallofthefollowingexcept:
A.Residentialconstruction.
B.Netchangesininventory.
C.Spendingforplantandcapitalequipment.
D.Aretirementportfolioofstocksandbonds.

Practicesfromtheendofthechapterexercisesare:
Chapter1,Page22:2.4
Chapter2,Page61:1.2,1.6,3.3,3.7

Chapter3,Page95:1.5(a,b),2.3,4.6
Chapter5,Page163:1.6,1.8,1.9,1.10,2.5,3.1,3.5

samplemidKey
(Ignorethepagenumbersinthebrackets)

1.(p.4)D

2.(p.5)C

3.(p.17)C

4.(p.10)A

5.(p.44)B

6.(p.46)D

7.(p.50)C

8.(p.55)A

9.(p.57)B

10.(p.60)C

11.(p.87)C

12.(p.89)A

13.(p.91)C

14.(p.92)A

15.(p.93)B

16.(p.96)D