Economics Assignment | Essay Help Services

In-Class Test: Macroeconomics
ECO 201
Dr. David G. Raboy
Instructions: This test consists of 31 multiple choice questions. Questions are conceptual. There is only one correct answer for each question. There is a maximum score of 105. Submit your test by creating a Word document with question numbers and letter answers only, double spaced, and upload it as a Word or PDF file to Canvas in the test assignment. [Do not answer on the test sheet and scan, or scan hand written answers.] You have the full class period to complete the test. FILES MUST BE SUBMITTED BY 12:45pm.
1. A Rolling Stones song, one of the top-rated rock-and-roll songs of all time, was titled “You Can’t Always Get What You Want.” In a macroeconomic setting, the title suggests:
a. Unrealistic expectations.
b. Fairness in the market.
c. Scarcity.
d. Greed.
2. Macroeconomics concerns the analysis of all EXCEPT one of the following. Circle the incorrect response:
a. Business cycles.
b. The inflation rate.
c. Choices made by individual households and firms.
d. Monetary policy.
3. Which one of the following is considered a transactions cost:
a. Contractual opportunism.
b. Transportation expense.
c. The mark-up in retail price.
d. The cost of buying a good.
4. When in order to choose one thing you must give up another, it is considered:
a. An absolute expense.
b. A change in preference.
c. An opportunity cost.
d. A rare event.
5. In economics the word “marginal” refers to:
a. Something unimportant.
b. A little bit of something.
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c. Notes written on the sides of text.
d. A concept that is of little interest.
6. The concept of bounded rationality includes all EXCEPT one of the following. Circle the one that is not included:
a. Human fallibility.
b. Irrationality.
c. Limited information.
d. Constraints on cognitive resources.
7. Value added is a concept that means:
a. Inflation.
b. A change in relative prices.
c. The change in value from one stage of production to another.
d. The amount extra you pay because of scarcity.
8. The phrase Ceterus Paribus or “all else held constant” is:
a. A simplifying assumption to keep economic models from being overly complex.
b. A Latin phrase where time is stopped.
c. Identifying a small amount.
d. None of the above.
9. Gross Domestic Product (GDP) in a given period can be measured as:
a. The sum of value-added at each stage of production for all goods and services in that period.
b. The sum of the values of all final goods and services in a given period.
c. The sum of all of the income in a given period.
d. All of the above.
10. “Positive Analysis” concerns all the following attributes EXCEPT one. Circle the incorrect answer:
a. It is objective.
b. It measures “what should be.”
c. It includes no value judgement.
d. Its goal is to assess “what is.”
11. An economic model consists of:
a. Hypotheses.
b. Assumptions.
c. The use of data to test a hypothesis.
d. All of the above.
12. Information Asymmetries refers to:
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a. Conflicting beliefs over facts.
b. Changes in information over time due to technology.
c. When one party to a transaction knows something not known by the other party to the transaction
d. None of the above.
13. Gross Domestic Product includes all EXCEPT one of the following. Circle the wrong answer:
a. Personal Consumption Expenditure.
b. Government transfer payments.
c. Investment.
d. Government purchases of goods and services.
14. When population increases and the number of firms producing a good also increases:
a. The equilibrium price drops and the equilibrium quantity increases.
b. The equilibrium price rises and the equilibrium quantity drops.
c. There is no change in the equilibrium price.
d. We lack information on the sizes of the relative shifts, and therefore can only determine the direction of the new equilibrium quantity, but not price.
15. When analyzing a production possibilities curve a point denoting a combination outside the curve is said to be, all else constant:
a. Efficient.
b. Optimal.
c. Infeasible.
d. Equitable.
16. A good used in the production of other goods is referred to as:
a. A final good.
b. A substitute.
c. An intermediate good.
d. None of the above.
17. When demand exceeds supply we say the following exists:
a. A surplus.
b. A demand shift.
c. Scarcity.
d. Equilibrium.
18. “Normative analysis” concerns:
a. The objective result of an economic model.
b. Determining what is normal.
c. A subjective judgement about “what should be.”
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d. Assumptions in an economic model.
19. When there is an increase in income, for a normal good, which is the likely effect:
a. There is movement up the demand curve.
b. The demand curve shifts to the left.
c. The supply curve shifts to the right.
d. The demand curve shifts to the right.
20. Which of the following shifts the supply curve:
a. A change in consumer preferences.
b. A change in demographics.
c. A change in consumer income.
d. None of the above.
21. When a government functionary is more concerned about the number of bureaucrats reporting to him/her than about the economic policy agenda of the relevant cabinet secretary that he/she reports to, it may result from:
a. A problem with the media.
b. A principal-agent disconnect.
c. Irrationality.
d. An economic bubble.
22. Efficiency in production means that:
a. The economy has grown.
b. An innovation has occurred.
c. Limited resources are employed fully.
d. Production is fair.
23. Equilibrium is defined as:
a. A point where supply and demand intersect, and buyers and sellers agree on price.
b. A point dictated by firms.
c. A position in the supply/demand relationship that never changes.
d. Many sellers are in a market.
24. The production possibilities curve represents:
a. Trade-offs society faces in the production of goods.
b. Opportunity costs of producing more of one good.
c. The highest level of production achievable with scarce resources.
d. All of the above.
25. The market for things like labor, physical capital, and entrepreneurialism is:
a. A product market.
b. A geographical market.
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c. A consumer market.
d. A factor market.
26. When the prices of houses accelerate dramatically, slow, and then take a precipitous decline it is an example of:
a. Disequilibrium.
b. An economic bubble.
c. Normal inflation.
d. Deflation.
27. When there is a general increase in income, for a normal good:
a. The equilibrium price of a particular good drops and the equilibrium quantity increases.
b. The equilibrium price rises and the equilibrium quantity drops.
c. The equilibrium price and quantity both increase.
d. There is no change in the equilibrium price.
28. Items that shift the supply curve include all EXCEPT one of the following. Circle the wrong answer:
a. The prices of inputs change.
b. The number of firms in the market changes.
c. Consumer demographics change.
d. There is technological change.
THE FOLLOWING QUESTIONS (31-33) ARE BASED ON THIS INFORMATION:
Basmati rice is a unique type of rice with a distinctive taste. No other rice variety is considered a suitable substitute. It is a staple in all Indian and Pakistani, and other South Asian country meals, and often an ingredient in dishes associated with such countries. It is only grown in a geographic region known as the Punjab, adjacent parts of which are in both India and Pakistan.
29. A dish that contains basmati rice as a major ingredient is called biriyani, a combination of meats and/or vegetables, spices, and basmati rice. Which of the following WOULD NOT explain a price increase in any variety of biriyani in Indian restaurants in the United States:
a. A drought in the Punjab.
b. An increase in the number of Indians and Pakistanis living in the United States.
c. A change in the tastes of a significant number of consumers who develop a liking for Indian food.
d. An innovation that increases the yield per acre of production of basmati rice.
30. Movement along the demand curve for basmati rice implies:
a. A change in the quantities of basmati rice demanded due to a price increase.
b. A shift in the basmati demand curve.
c. A shift in the basmati supply curve.
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d. A decrease in the numbers of importers of basmati rice.
31. Consider the following graph depicting a change in the equilibrium price and quantity from Period 1 to the later Period 2 of basmati rice. Which of the following explanations WOULD NOT explain the graph below:
a. There is a war between India and Pakistan.
b. There is a drought in the Punjab.
c. Tastes change so there is more demand for basmati rice.
d. Farmers in the Punjab switch from basmati rice to wheat.
S1
S2
D
Q1
P2
P1
Q2
P
Q