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Past Test 1 with Answer Key - Introductory Economics | ECON 1200, Exams of Economics

Rensselaer Polytechnic Institute (RPI)Economics

Material Type: Exam; Class: INTRODUCTORY ECONOMICS; Subject: Economics; University: Rensselaer Polytechnic Institute; Term: Spring 2010;

Typology: Exams

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View Attempt 1 of 1
Title: Test #1, Spring 2010
Started: February 11, 2010 11:56 AM
Submitted: February 11, 2010 12:41 PM
Time spent: 00:45:49
Total score: 94/100 = 94% Total score adjusted by 0.0 Maximum possible score: 100
Done
1.
Economics is the study of
Student Response Value Correct Answer
1. the government's role in society.
2. how to increase production.
3. how a free market system functions.
4. how society manages its scarce resources. 100%
Score: 2/2
2.
In class, you saw that economics primarily involves
Student Response Value Correct Answer
1. the study of how rational agents engage in actions that
advance t heir level of self- suffic ienc y.
2. the study of how the unlimited supply of resourc es
affects people's decision-making.
3. the study of how calculated, self-interested people
behave under the condition of sc arcity. 100%
4. the study of stocks, bonds, and other financial
inst it ut ions.
Score: 2/2
3.
The principle that "people face tradeoffs" applies to
Student Response Value Correct Answer
1. families.
Your location: Home Page › Test #1, Spring 2010 › Assessments › View All Submissions › View
Attempt
2/19/2010 Blackboard Learning System
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Download Past Test 1 with Answer Key - Introductory Economics | ECON 1200 and more Exams Economics in PDF only on Docsity!

View Attempt 1 of 11. 2. Title: Started:Submitted:Time spent: Total score: 94/100 = 94% Done Economics is the study of Score: 1. 2. 3. 4. Student Response the government's role in society.how to increase production.how a free market system functions.how society manages its scarce resources. Test #1, Spring 2010 February 11, 2010 11:56 AMFebruary 11, 2010 12:41 PM00:45:49 2/2 Total score adjusted by 0.0 Maximum possible score: 100 Value 100% Correct Answer

3.^ In class, you saw that economics primarily involvesScore: The principle that "people face tradeoffs" applies to^ 1. the study of how rational agents engage in actions that2. the study of how the unlimited supply of resources^ 3. the study of how calculated, self-interested people^ 4. the study of stocks, bonds, and other financial 1.^ Student Response advance their level of self-sufficiency.affects people's decision-making.behave under the condition of scarcity.institutions. Student Response families. 2/2^ Value 100% Value^ Correct AnswerCorrect Answer

2/19/2010 Attempt Your location: Home Page (^) › Test #1, Spring 2010Blackboard Learning System › Assessments › View All Submissions › View

4. 5.^ Score: College-age athletes who drop out of college to play professional sports Score: To say that "rational people think at the margin" is to say that2.^ 3.^ 4. 1. 2. 3. 4.^ societies.individuals.All of the choices are correct. Student Response underestimate the value of a college education.are not rational decision makers.are concerned more about present circumstances than theirfuture.are well aware that their opportunity cost of attending college isvery high. 2/22/2^ 100% Value 100% Correct Answer

6.^ Score: The fact that different countries experience different standards of living is largely explained bydifferences in those countries'^ 1.^ 2.^ 3.^ 4. 1. 2. 3.^^ Student Response changes in costs (but not changes in benefits) influence people'sdecisions and their behavior.changes in benefits and changes in costs influence people'sdecisions and their behavior.tradeoffs can be eliminated by rational people who think at themargin.changes in benefits (but not changes in costs) influence people'sdecisions and their behavior. Student Response populations.locations.productivity levels.2/2^ Value^ 100% Value 100%^ Correct AnswerCorrect Answer

10. 11. In a certain economy, peanuts and books are produced, and the economy currently operatesproduction possibilities frontier. Which of the following events would allow the economy to producemore peanuts and more books, relative to the quantities of those goods that are being produced now? Score: Table 2-1. Production Possibilities for Toyland Dolls 1. 2.3. 4. 400300200100 Student Response The economy experiences economic growth.All of the choices are correct.Unemployed labor is put to work producing peanuts and books.The economy puts its idle capital to work producing peanuts andbooks. Fire Trucks 2003504500 0/2 Value 0% Correct Answer on its

12.^ Refer to Table 2-1 for Toyland?^ Score: Figure 2-8^ 1.^ 2.^ 3.^ 4.^0^ Student Response The opportunity cost of an additional 100 dolls is 50 fire trucks.The opportunity cost of an additional 100 dolls increases asmore dolls are produced.The opportunity cost of an additional 100 dolls is 100 firetrucks.Toyland’s production possibilities frontier is a straight,downward-sloping line.^500. Which of the following statements accurately describes the production possibilities2/2^ Value^ 100%^ Correct Answer

nar009-1.jpg Refer to Figure 2-8. What is the opportunity cost of moving from point A to point B?

13.^ Score: Figure 2-8^ 1.^ 2.^ 3.^ 4.^^ Student Response the gain in well-being that the society experiences as a result ofthe move8 bathtubsthe loss of well-being that the society experiences as a result ofthe move20 barrels^^ 2/2 Value 100%^ Correct Answer

15.^ Score: Which of the following statements best captures the relationship between microeconomics andmacroeconomics? Score:3.^ 4. 1. 2. 3. 4.^ Econoland acquired more resources.Econoland experienced an improvement in widget-makingtechnology. Student Response Microeconomists study markets for small products, whereasmacroeconomists study markets for large products.Microeconomics and macroeconomics are distinct from oneanother, yet they are closely related.For the most part, microeconomists are unconcerned withmacroeconomics, and macroeconomists are unconcerned withmicroeconomics.Microeconomics is oriented toward policy studies, whereasmacroeconomics is oriented toward theoretical studies.2/22/2 Value 100% Correct Answer

16. 17. When an economist points out that you and millions of other people arereferring to the fact that we all Score: Ben bakes bread and Shawna knits sweaters. Ben likes to eat bread and wear sweaters, and the sameis true for Shawna. In which of the following cases is it impossible for both Ben and Shawna to benefitfrom trade? 1. 2. 3. 4. Student Response have similar tastes and abilities.are concerned about one another’s well-being.rely upon government to provide us with the basic necessities oflife.rely upon one another for the goods and services we allconsume. Student Response 2/2 interdependent Value 100% Value Correct AnswerCorrect Answer , he or she is

18.^ Score: Total output in an economy increases when each person specializes because Score:1.^ 2.^ 3.^ 4. 1. 2. 3. 4.^ Ben is better than Shawna at baking bread and at knittingsweaters.Ben cannot knit sweaters and Shawna cannot bake bread.None of the choices are correct.Ben is better than Shawna at baking bread and Shawna is betterthan Ben at knitting sweaters. Student Response government necessarily plays a larger role in the economy due tospecialization.each person spends more time producing that product in whichhe or she has a comparative advantage.there is less competition for the same resources.a wider variety of products will be produced within each countrydue to specialization.2/22/2^ 100% Value 100% Correct Answer

19. Table 3-4 Brenda and Eric run a business that involves setting up and testing computers. The following tableapplies.BrendaEric Refer to Table 3-4 1.2. Student Response Brenda has an absolute advantage, and Eric has a comparativeadvantage, in setting up computers.Brenda has an absolute advantage and a comparative advantagein setting up computers.a Computer Set Up. Which of the following statements is correct? 3048 Minutes Needed to a ComputerTest 40? Number of Computers Set Up or Tested ComputersSet Up 8050 in a 40-Hour Week Value 0% Correct Answer ComputersTested 6040

23. Refer to Table 3-5^ Score: In a competitive market, each seller has limited control over the price of his product because^ 1.^ 2.^ 3.^ 4. 1. 2. 3. 4.^^ Student Response airplanes and the United States has an absolute advantage inboth goods.cars and the United States has an absolute advantage inairplanes.cars and the United States has an absolute advantage in neithergood.airplanes and the United States has an absolute advantage incars. Student Response these markets are highly regulated by government.other sellers are offering similar products.buyers exert more control over the price than do sellers.. Japan has a comparative advantage in2/2^ Value^ 100% Value 100%^ Correct AnswerCorrect Answer

24. 25.^ Score: Quantity demanded falls as the price rises and rises as the price falls, so we say that Score: Suppose scientists provide evidence to the effect that chocolate pudding increases cholesterol. Wewould expect to see 1. 2. 3. 4. sellers usually agree to set a common price that will allow eachseller to earn a comfortable profit. Student Response quantity demanded is a function of demand.price is determined by quantity demanded.quantity demanded is determined by quantity supplied.quantity demanded is negatively related to the price.2/22/2 Value 100% Correct Answer

26. 27.^ Score: According to the law of supply, Score:^ 1.^ 2.^ 3.^ 4. 1. 2. 3. 4.^ Student Response no change in the demand for chocolate pudding.an increase in the demand for chocolate pudding.a decrease in the demand for chocolate pudding.a decrease in the supply of chocolate pudding. Student Response the quantity supplied of a good is negatively related to the priceof the good.the supply curve for a good is upward-sloping.All of the choices are correct.when the price of a good falls, the quantity supplied of the goodrises. 2/22/2^ Value 100% Value 100%^ Correct AnswerCorrect Answer

Figure 4-10 nar005-1.jpg

29. 30. Score: In a given market, how are the equilibrium price and the market-clearing price related? Score: Beef is a normal good. You observe that both the equilibrium price and quantity of beef have fallen overtime. Which of the following explanations would be most consistent with this observation? 1. 2. 3. 4. 1. 2. Student Response The equilibrium price exceeds the market-clearing price.The market-clearing price exceeds the equilibrium price.They are the same price.There is no relationship. Student Response Consumers have experienced an increase in income and beef-production technology has improved.New medical evidence has been released that indicates anegative correlation between a person’s beef consumption and2/22/2 Value 100% Value Correct AnswerCorrect Answer

31.^ Score: Which of the following sets of events would most likely cause an increase in the price of a new house?^ 3.^ 4. 1. 2. 3.^ his or her longevity.The price of chicken has risen and the price of steak sauce hasfallen.The demand curve for beef must be positively sloped. Student Response lower wages for carpenters, lower wood prices, increases inconsumer incomes, higher apartment rents, increases inpopulation and expectations of higher house prices in the futurehigher wages for carpenters, higher wood prices, increases inconsumer incomes, higher apartment rents, increases inpopulation and expectations of higher house prices in the futurehigher wages for carpenters, lower wood prices, decreases inconsumer incomes, lower apartment rents, decreases inpopulation and expectations of lower house prices in the future2/2^ 100% Value 100% Correct Answer

32. 33.^ Score: Suppose that demand for a good increases and, at the same time, supply of the good decreases. Whatwould happen in the market for the good? Score: Suppose the incomes of buyers in a market for a particular normal good decrease and there is also areduction in input prices. What would we expect to occur in this market?4. 1. 2. 3. 4.^ lower wages for carpenters, higher wood prices, decreases inconsumer incomes, higher apartment rents, decreases inpopulation and expectations of higher house prices in the future Student Response Both equilibrium price and quantity would increase.Both equilibrium price and quantity would decrease.Equilibrium price would decrease, but the impact on equilibriumquantity would be ambiguous.Equilibrium price would increase, but the impact on equilibriumquantity would be ambiguous.2/22/2 Value 100% Correct Answer

34.^ Score: Which of the following events would definitely result in a higher price in the market for Snickers?^ 1.^ 2.^ 3.^ 4. 1. 2.^^ Student Response The equilibrium price would increase, but the impact on theamount sold in the market would be ambiguous.Both equilibrium price and equilibrium quantity would increase.Equilibrium quantity would increase, but the impact onequilibrium price would be ambiguous.The equilibrium price would decrease, but the impact on theamount sold in the market would be ambiguous. Student Response Demand for Snickers decreases and supply of Snickersincreases.Demand for Snickers increases and supply of Snickers2/2^ Value^ 100% Value 100%^ Correct AnswerCorrect Answer

38. 39.^ Score: The greater the price elasticity of demand, the Score: Demand is elastic if Price Elasticity of Demand (PED) is4. 1. 2. 3. 4. 1.^ the longer the period of time. Student Response greater the percentage change in price over the percentagechange in quantity demanded.greater the responsiveness of quantity demanded to a change inprice.more likely the product is a necessity.smaller the responsiveness of quantity demanded to a change inprice. Student Response 2/22/2 Value 100% Value Correct AnswerCorrect Answer

40. 41.^ Score: An increase in price causes an increase in total revenue when Score: Eric produces jewelry boxes. If the demand for jewelry boxes is elastic and Eric wants to increase his^ 2.^ 3.^ 4. 1. 2. 3. 4.^ greater than 1.less than 1.equal to 0.equal to 1. Student Response demand is unit elastic.demand is elastic.demand is inelastic.All of the choices are possible.^ 2/22/2 100% Value 100% Correct Answer

42. 43. total revenue, he should^ Score: If a change in the price of a good results in no change in total revenue, then Score:^ 1.^ 2.^ 3.^ 4. 1. 2. 3. 4.^^ Student Response increase the price of his jewelry boxes.not change the price of his jewelry boxes.decrease the price of his jewelry boxes.None of the choices are correct. Student Response the demand for the good must be elastic.the demand for the good must be inelastic.buyers must not respond very much to a change in price.the demand for the good must be unit elastic.2/22/2^^ Value 100% Value 100%^ Correct AnswerCorrect Answer

44. 45.^ In a simple circular-flow diagram, firms own the factors of production and use them to produce goodsand services.Score: Differences in opportunity cost allow for gains from trade. Score: Supply is said to be inelastic if the quantity supplied responds substantially to changes in the price, andelastic if the quantity supplied responds only slightly to price.^ 1. False^ 2. True 1. False 2. True^^ Student Response Student Response 2/22/2^ Value 100% Value 100%^ Correct AnswerCorrect Answer

2/19/2010 49. 50. Done Greg Mankiw pointed out that in centrally planned economies, prices are not allowed tobalance supply and demand.Score: Price elasticity of demand and the slope of the demand curve are the same thing.Score: Student Response True Student Response False (^) 2/22/2 Value 100% Value 100%Blackboard Learning System Correct Answer True Correct Answer False