Macomber 202 Final Exam pt 1

1.

1 point

For this question, consider the following: Zakistan can produce 25 mugs or 40 paper clips with the same resources as Macomberia can produce 20 mugs or 50 paper clips:

Based on this information, which of the following is true?

Zakistan has the absolute advantage in mugs and Macomberia has absolute advantage in paper clips.

Zakistan has absolute advantage in mugs and paper clips.

Macomberia has absolute advantage in mugs and Zakistan has absolute advantage in paper clips.

Macomberia has absolute advantage in mugs and paper clips.

2.

1 point

For this question, consider the following: Zakistan can produce 25 mugs or 40 paper clips with the same resources as Macomberia can produce 20 mugs or 50 paper clips:

How should the two nations interact?

Macomberia should specialize in mugs, Zakistan should specialize in paper clips, and the two countries should trade.

They should not engage in trade, as they will not both be made better off.

Zakistan should specialize in mugs, Macomberia should specialize in paper clips, and the two should trade.

They should specialize in both goods and then trade with each other.

3.

1 point

The government influences a majority of the economic transactions that take place in my society. However, I have many choices that are made by me. Which best describes my economy?

slightly command-orientated

very market-orientated

slightly market-orientated

very command orientated

4.

1 point

In order to be productive efficient, production must take place

on the PPF Curve

Anywhere

outside the PPF Curve

within the PPF Curve

5.

1 point

The united states can produce 50 trucks or 10 airplanes with the same resources as England can produce 36 trucks or 8 airplanes. Which of the following is true?

england has comparative advantage in both goods

The united states has comparative advantage in both goods.

England has comparative advantage in airplanes, the US has comparative advantage in trucks

england has comparative advantage in trucks, the US has comparative advantage in airplanes

6.

1 point

A country can have the comparative advantage in both goods in a two-country, two-good model.

True

False

7.

1 point

For this question, consider the following: Zakistan can produce 25 mugs or 40 paper clips with the same resources as Macomberia can produce 20 mugs or 50 paper clips:

What is the opportunity cost of producing 1 mug in Macomberia?

2.5 paper clips

70 paper clips

.4 paper clips

30 paper clips

8.

1 point

When the government institutes a minimum price, it is called a price ceiling.

True

False

9.

1 point

A country with comparative advantage in a good will also have absolute advantage in that good.

True

False

10.

1 point

Which of the following shifts supply?

A change in expectations

A change in tastes

A change in costs

A change in income

11.

1 point

Economic theory states that average wage levels will fall as international trade increases.

True

False

12.

1 point

"Eighty-seven billion dollars for Irag! Just think of how many of our children could be better educated; how many schools could be restored; how many youths could be trained for new jobs; how many bridges and roads could we rebuild; how many prescriptions and improved health care could be provided; how many more police officers, firefighters, etc., could be hired and equipped."

The economic concept illustrated in this statement is:

the law of diminishing marginal utility

diseconomies of scale

Opportunity Cost

The Law of diminishing marginal returns

13.

1 point

For this question, Macomberia GDP (in billions) is $15,000. Zakistan GDP (in billions) is 20,000yen. The population of Zakistan is 100,000,000; the population of Macoomberia is 200,000,000.

Which country has the larger per capita GDP?

Zakistan

Macomberia

14.

1 point

Why has globalization become so prevalent in the past half century?

Transportation and communication have become much cheaper than in the past.

foreign goods are always of better quality

foreign goods are cheaper than domestic goods

Trade relations have improved through agreements like NAFTA

15.

1 point

If there is an increase in the price of a key input of production in a market, what would happen to the equilibrium price and quantity?

price decreases while quantity increases

Price and Quantity increase

Price and Quantity decrease

Price increases while quantity decreases

16.

1 point

Which of the following is true about how domestic entities are affected by protectionism?

Consumers benefit, while firms are harmed

Both consumers and firms are harmed

Firms benefit, while consumers are harmed

Both consumers and firms benefit

17.

1 point

Match the type of labor to the job it is best suited for:
Very precise hand movement

Sales person

Surgeon

Professor

Stock room worker

18.

1 point

In order to measure the value of goods and services produced by a country, we use Gross Domestic Product.

True

False

19.

1 point

For this question, Macomberia GDP (in billions) is $15,000. Zakistan GDP (in billions) is 20,000yen. The population of Zakistan is 100,000,000; the population of Macoomberia is 200,000,000.

In Macomberia, Consumption is $9000; investment is $3000; government is $4500; which of the following must be true?

The trade balance is zero.

The trade balance is positive.

This is impossible.

The trade balance is negative.

20.

1 point

Protectionism causes lower prices on the domestic markets.

True

False

21.

1 point

What is true of equilibrium price?

None of the above

Qs > Qd

Qs < Qd

Qs = Qd

22.

1 point

Which of the following is not a tool of protectionism?

Quotas

Tariffs

Forcefields

Non-tarrif barriers

23.

1 point

When does the nation hold comparative advantage in a good?

when the nation can produce a good at a higher opportunity cost compared to another

when the nation has a lower productivity advantage producing a good

when the nation has a greater productivity disadvantage producing a good

when the nation can produce a good at a lower opportunity cost compared to another

24.

1 point

An argument that protectionism should continue is that foreign firms will sell products in the domestic market below the cost of production to force competitors out of business. This is the...

Infant Industry Argument

Race to the Bottom Argument

National Interest Argument

Dumping Argument

25.

1 point

Match the type of labor to the job it is best suited for:
PhD in Economics

Stock room worker

Sales person

Professor

Surgeon

26.

1 point

What stops us from having everything we desire?

choices

The budget Constraint

scarcity

Economics

27.

1 point

This is a type of market where buyers and sellers interact without government approval.

point and click market

brick and mortar market

black market

brick and click market

28.

1 point

Which of the following would increase standard of living, and GDP?

The value of do-it-yourself painting by US homeowners.

The total spending on cocaine produced and sold in the US.

The total spending on public education in the US.

The amount of leisure time taken by US workers.

29.

1 point

The Kravlon Bank wants to loan money to customers. They have a risk premium of 1.5%, they expect inflation to be 2%, and there is a time value of money of .5%. What is the minimum interest rate they should charge?

4%

2.5%

6%

3.5%

30.

1 point

A firm can maximize profits through

reducing waste

increasing costs

creating more goods

decreasing revenues

31.

1 point

For this question, consider the following: Zakistan can produce 25 mugs or 40 paper clips with the same resources as Macomberia can produce 20 mugs or 50 paper clips:

When voluntary trade exists between Zakistan and Macomberia...

people in Zakistan are made better off at the expense of people in Macomberia

Businesses in both nations benefit at the expense of the consumers

both nations benefit through better efficiency and more goods to consume

People in Macomberia are made better off at the expense of people in Zakistan.

32.

1 point

How does a deadweight loss occur?

when the market is at equilibrium

When there is a price ceiling above the equilibrium price

when the market produces an inefficient quantity

when there is a price floor below the equilibrium price

33.

1 point

Simple interest allows for interest payments to accumulate over time, causing large growth on a principal investment.

True

False

34.

1 point

For this question, Macomberia GDP (in billions) is $15,000. Zakistan GDP (in billions) is 20,000yen. The population of Zakistan is 100,000,000; the population of Macoomberia is 200,000,000.

The exchange rate is 1yen = $2, what is the value of Zakistan GDP in Macomberia $?

$40,000

10,000yen

40,000yen

$10,000

35.

1 point

Match the type of labor to the job it is best suited for:
Able to lift heavy objects

Surgeon

Sales person

Professor

Stock room worker

36.

1 point

As the economy contracts, we fall into what is called a...

peak

recession

trough

depression

37.

1 point

If this contraction (recession) continues for a long time, we would consider it a...

peak

depression

recession

trough

38.

1 point

For this question, Macomberia GDP (in billions) is $15,000. Zakistan GDP (in billions) is 20,000yen. The population of Zakistan is 100,000,000; the population of Macoomberia is 200,000,000.

Zakistan has a higher standard of living than Macomberia.

True

False

39.

1 point

For this question, consider the following: Zakistan can produce 25 mugs or 40 paper clips with the same resources as Macomberia can produce 20 mugs or 50 paper clips:

If the price of mugs are $3 Zakistan and $2 Macomberia, what will happen to the price of mugs in each country when free trade occurs?

Price of mugs will rise in Macomberia, while falling in Zakistan.

Price of mugs will rise in Zakistan, while falling in Macomberia

Price of mugs will fall in both countries

Price of mugs will rise in both countries

40.

1 point

Match the type of labor to the job it is best suited for:
Friendly demeanor

Surgeon

Professor

Sales person

Stock room worker

41.

1 point

The money that i pay in order to lease a store front for my business is referred to as a

opportunity cost

interest rate

marginal analysis

sunk cost

42.

1 point

An individual's economic goal is to

consume the most goods and services

minimize costs

maximize utility

earn high profits

43.

1 point

When does a nation hold absolute advantage in a good?

when it can produce the good at a lower resource cost compared to another country

when it can produce the good at a lower profit compared to another country

When it can produce the good at a higher profit compared to another country

when it can produce the good at a higher resource cost compared to another country

44.

1 point

Illegally taking to the streets to sell tickets for a sporting event in New York City to get around the face value of the tickets is an example of

Quality Adjustment

Black Market

Shifting who is involved in the transaction

Side Payments

45.

1 point

Which of the following three questions is not answered through the set of social arrangements that make up an economy?

What is produced?

For whom is it produced?

How much is produced?

How is it produced?

46.

1 point

What will happen to jobs in countries that emerge in trade?

Jobs will shift to where countries have an absolute advantage

There will be more jobs in high income countries

Jobs will move to low income countries

Jobs will shift to where countries have a comparative advantage

47.

1 point

Protectionism is used to block imports of foreign goods and services.

True

False

48.

1 point

I purchase a cheeseburger and enjoy eating it for lunch. What have i just taken part in?

Production

Distribution

Consumption

Gluttony