sample mid1 macro spr11

Sample multiple choice questions for mid exam (Ch: 1, 2, 3, 5)

Principles of Macroeconomics, Spring 20151.To an economist, scarcity means that:A.Shortages will always exist.B.The market mechanism cannot be relied upon.C.A production-possibilities curve cannot accurately represent the tradeoff between two goods.D.There are not enough resources available to satisfy all our desires.

2.Economics can be defined as the study of:A.For whom resources are allocated to increase efficiency.B.How society spends the income of individuals.C.How scarce resources are allocated to fulfill society's goals.D.What scarce resources are used to produce goods and services.

3.Macroeconomics focuses on the performance of:A.Individual consumers.B.Government agencies.C.The overall economy.D.All of the above.

Figure 1.1Production-possibilities curve

4.At which point might society be able to produce this combination if new resources were discovered but cannot produce at with current resources? (See Figure 1.1.)A.A.B.B.C.C.D.D.

5.A factor market is any place where:A.Finished goods are bought and sold.B.Land, labor, or capital is bought and sold.C.Finished services are bought and sold.D.Factories are bought and sold.

6.The term opportunity costs refers to the:A.Value of all the options given up when a good or service is produced.B.Financial costs of all the factors of production used to produce a good or service.C.Amount of resources used to produce a good or service.D.Value of the best option given up when a good or service is produced.

7.Ceteris paribus, if buyers expect the price of soccer balls to fall in the future, then right now there should be:A.An increase in the demand for soccer balls.B.A decrease in the supply of soccer balls.C.A decrease in the demand for soccer balls.D.No change in the supply of or demand for soccer balls since the price is not changing right now.

8.Which of the following events would cause a rightward shift in the market supply curve for automobiles?A.A technological improvement which reduces the cost of production.B.An increase in the wages of autoworkers.C.A higher sales tax on automobiles.D.A decrease in the number of sellers.

9.If there is a surplus at a given price, then:A.The market is in equilibrium at that price.B.That price is greater than the equilibrium price.C.That price is lower than the equilibrium price.D.The price is zero.

10.Assume milk is used to produce ice cream. Ceteris paribus, a decrease in the price of milk will cause the equilibrium price of ice cream to:A.Increase and the equilibrium quantity of ice cream to increase.B.Increase and the equilibrium quantity of ice cream to decrease.C.Decrease and the equilibrium quantity of ice cream to increase.D.Decrease and the equilibrium quantity of ice cream to decrease.

11.The total market value of all final goods and services produced within a nation's borders in a given time period is:A.Intermediate goods.B.GNP.C.GDP.D.Price Index.

12.Suppose you volunteer to help clean up your neighborhood and the only payment you receive is the sense of goodwill that develops with your neighbors. Your efforts cause the GDP of the economy to:A.Remain unchanged.B.Fall by the opportunity cost of the time you spend doing volunteer work.C.Rise by the opportunity cost of the time spent by all of the people in the neighborhood on the volunteer project.D.Rise by the value of increased cleanliness of the neighborhood.

13.A furniture factory produces dining room sets. The lumber they purchase from the lumberyard is a/an:A.Factor of production.B.Final good.C.Intermediate good.D.Service.

14.Real GDP is more accurate than nominal GDP in making comparisons of output over time because:A.Nominal GDP can increase simply because of price increases over time.B.Real GDP is not affected by output changes.C.Nominal GDP is the hypothetical output that would be produced at full employment.D.Real GDP is not affected by changes in productivity or the size of the labor force.

15.If nominal GDP was $11,500 billion in 2003 and the price level in 2003 was 111.6, then real GDP would have been approximately:A.$9,795 billion.B.$10,305 billion.C.$10,485 billion.D.$9,750 billion.

16.The economic definition of investment includes all of the following except:A.Residential construction.B.Net changes in inventory.C.Spending for plant and capital equipment.D.A retirement portfolio of stocks and bonds.

Practices from the end of the chapter exercises are:

Chapter 1, Page 22: 2.4

Chapter 2, Page 61: 1.2, 1.6, 3.3, 3.7

Chapter 3, Page 95: 1.5 (a,b), 2.3, 4.6

Chapter 5, Page 163: 1.6, 1.8, 1.9, 1.10, 2.5, 3.1, 3.5sample mid Key(Ignore the page numbers in the brackets)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