ECON1110
EXAMI-FALL,2OO2
NAME
(PRINTLAST NAME, FIRSTNAME)
\.ERSION A
SS#
INSTRUCTIONS: SelecttheDg!l!response
to eachquestionor statement
andbubblein the
cofiesponding
letteron youranswersheet.Eachconectresponse
is worth3.75pointsout of a
possible150points.
l.
The studyofeconomicsarisesbccause:
a.
aesourccs
are abundantrclative to the usesfbr thoseresources.
b.
resources
arelimitedrelativeto thewantsandneedsfor thoseresources.
govemments
c.
rcquireassistance
to eliminatetheproblemof scarcity.
govemments
d.
aretheonly entitiescapableofeliminatingtheproblemof scarcity.
2.
If UNT increases
spendingon parkinglots,it will haveto reducespendingon classrooms.
This statement
bestrepresents
theconceptof:
a.
mlcroeconomlcs.
b.
thefallacyof falsecause.
c.
theceterispdribusassumption.
d.
opportunrty
cost.
3.
Whichof thefollowingis !gl! an cxampleof a factorof production?
x.
A commercrul
landscirfer
b.
Chainsaws
usedby lumberjacks
c.
Moneyin individualretirement
accounts
prcsidcnt
d.
Thc
of i corlorrt'on
4.
Macroeconomics:
a.
is thestudyof how businesses
makedecisionsto incrcaseprollts.
b.
is studiedin marketbasedeconomies
but is not relevantto planncdcconomies.
c.
useseconomicaggregates,
suchasunemploymcnt
andGDP,to mexsureeconomic
actlvrty.
d.
5.
relieson hypotheticaldataratherthan actualdatato gaugethe pertbrmanceof the
economyas a whole.
Which of the following statementsillustratesthe fallacy ofcomposition?
a.
Somc groupsin the economywill benefit from a nationalhealthcare plan,
thereforethe entireeconomywill benefitfrom sucha plan.
b.
Thc entireeconomywill benefitfrorn a nationalhealthcarc plan, therctbrceach
group in the cconomywill benctlt from sucha plan.
c.
Increasinggovemmentprovision of hcalthcarc to the nation'spoor will leadto an
increasein the demandtbr healthcare.
d.
The governmentshouldincreaseits provisionof healthcarc to the nation'spoor.
EXAMl-FALL,2OO2
ECON l1l0
VERSIONA
6.
The statement"unemploymentin a wealthy country like the United Statesshouldnot
exist" is an exampleof:
a.
a positivemicroeconomicstatement.
b.
a normativemicroeconomicstatement.
c.
a positivemacroeconomicstatement.
d.
a normativemacroeconomicstatement.
7.
Thc fallacy oi falsecauscoccurswhen:
a.
it is assumcd
thatbecause
eventB followseventA, eventA causeseventB.
b.
it is assumcd
thatotherinfluences
on a relationship
areheldconstant.
c.
it is assumed
thatbecause
a policyis goodfor onesectorof theeconomy,it is also
d.
goodtbr thc economyasa whole.
it is assumed
thatbecause
a policyis goodfor theeconomyasa whole,it must
alsobe goodfor eachindividualsectorof theeconomy.
Use the graphbelowto answerthe next
nextlwo
two questlons
ouestions.
Radios
ters
8.
productionis
If PPFIrepresents
thiseconomy'sabilityto produceradiosandcomputers,
inefficientat point(s):
a.
b.
c.
d.
e,
9.
A Only.
B only.
C only.
D only.
A, C, andD.
A shift from PPF,to PPF"illusrrates
b.
c.
d.
e,
and could come aboutdue to
constantopportunitycost; a decreasein uncmploymcntin the economyus a whole
increasingopponunily cost; more efficient useof rcsourcesby radio
mtnufactuters
economicgrowth; an increasein the rcsourccsavailablc to producecompute$ and
a decreasein the resourcesavailableto produoeradios
economicgrowth; an increasein the technologyusedto produceboth radiosanc
computers
scarcity;r decreasein the resourcesavailableto produceradios and computen
ECON1110
10-
EXAM1.FAI,L.2OO2
\.ERSION A
policy goalsof mostindustrialized
The macroeconomic
nationsinclude:
a.
full employment
andpricelevelstability.
pricelevelstabilityandmaximumcorporatcprofits.
b.
c.
maximizingta,\ratesin orderto maximizetaxrevenues.
d.
economicgrowthandan equaldistributionof income.
Usethetablebelowto answerthenextthrecquestions.
Schedule
ProductionPossibilities
Combination
A
B
l
Haircuts
0
c
'
D
E
4
o
Manicures
0
t
2
3
4
I l.
C to combinationD andproducingthc
The oppo.tunitycostof movingfrom combination
thirdmanicure
is:
c.
7 haircuts.
a.
3 haircuts.
l0 haircuts.
4 haircuts.
d.
b.
12.
isl
thattheopportunitycostof manicures
This productionpossibilities
scheduleindicates
c.
dccreastng.
a.
increasing.
d.
impossibleto dctermine.
b.
constant.
13.
and2 manicures:
Thecombination
of t haircuts
production
possible
if
the
of bothis efficienl.
a.
is
giventhecurrentresources
andtechnology.
is unattainable
b.
ratedecreases.
c.
canbc producedonly if the unemploymcnt
canbeproducedonly if pcoplcwanttheirhaircut.
d.
14.
Relianceon theinteractionof individualbuyersandsellersandsupplyanddemandto
thebasicquestions
of whatoutputsto producc,how to produceoutputs,andwho
address
of:
getsto consumetheoutputsproduccdis chamcteristic
a.
b.
c.
d.
15.
mallKeteconomles,
plannedeconomies.
socialism.
communism.
In a pure (laissez-faire)crpitalistic economy,the role of govemmentis limited to:
activitiessuchas enforcing laws rnd providing nationaldefense.
a.
b.
levying taxesin order to provide corporatesubsidiesand encourageproduction.
directingrcsourcesto their highestvalued use.
c.
d.
all of the abovc are corect.
ECON1110
EXAMI-FALL,2OO2
VERSIONA
16.
Eouilibriumoccursin a marketwhen:
a,
bothbuyersandsellershavebeensatisfiedandquantitydemanded
is equalto
quantitysupplied.
b.
all buyershavebeensatisfiedanddemandis equalto supply.
c,
all sellershavebeensatisfiedandquantitysuppliedhasfallento zero.
d.
bothbuyersandsellershavebeensatisfiedandbothquantitysuppliedand
ouantitvdemandcd
havefallento zero.
r7.
The law of demandindicatesthat:
a.
D-
c.
d.
supply and demandare inverselyrclated.
supply and demandarc dircctly relatedprice and quantity demandedare directly related.
price and quantity demandedare inverselyrelated.
Usethegaph belowto answerthen€xtthreequestions.
Price
$/novel
$8
Supply
$6
$4
$2
Demand
100 l20 140 l6(l Qutlntityof Novels
andtheequilibriumquantityis _.
$6; 140
$6; t20
18.
priceof novclsis
Theequilibrium
c.
a.
$8; 100
d.
b.
$4;120
19.
A marketDriceof $8 Dernovelwill leadto:
a surplusof 20 novels.
a surplusof 40 novels.
b.
a shortage
of 20 novels.
d.
a shortage
of 40 novels.
20.
An eflectiveDriceceilinsfor novelscouldbe sel at
a,
b.
$4; surplus
$8;surplus
c.
d.
$4; sho(age
$8;shofiage
and would causea
ECON lll0
EXAMl-FALL,2OO2
\.ERSION A
21.
Ceterisparibus,a decrease
in thenumberof suppliersin themarketfor goodX will:
a.
decrease
boththeequilibriumpdceandequilibriumquantityof goodX.
b.
decrease
theequilibriumpdceandincrcasetheequilibriumquantityof goodX.
c.
increaseboththeequilibriumpriceandequilibriumquantityof goodX.
d.
increasetheequilibriumpriceanddecrease
the equilibriumquantityof goodX.
22.
The demandfor localbustransportation
is likely to increaso
if;
a.
thepaiceof localtaxi servicedecreases.
b.
thepriceof localbustranspoftation
increases.
c.
thepriceof gasolineandparkingincredse.
d.
thepricepaidto busd.iversdecreases-
23.
If thedemandfor milk increases
at thesametime thatthesupplyof milk decreases,
supplyanddemandanalysispredictsthat:
theequilibriumpriceof milk will incrcascandtheequilibriumquantity
a.
of milk will decreasc.
b.
theequilibriumpriceof milk will increasebut moreinformationis
neededto predictwhatwill happento theequilibriumquantityof miik.
priceandtheequilibrium
quantity
c.
boththeequilibrium
of milk will increase.
d.
theequilibriumquantityof milk will increasebut moreinformationis neededto
predictwhatwill happ€nto theequilibriumpriceof milk.
24.
Accordingto the law of supply,an increase
in thepriccof shocswill leadto:
a.
an increasein thequantitysuppliedof shoes.
in thequantitysuppliedof shoes.
b.
a decrease
c.
an incrcasein thesupplyof shoes.
d.
a decrease
in thesupplyof shoes.
25.
Effectivepricefloorstendto causc:
a.
surpluses.
b.
shortages.
c.
equilibium.
d.
increases
in supply.
Usetheinformationin thc tablebelowto answerthl] nexttwo questions.
Year
NominalIncome
CPI
I
l3l
$30,000
2
136
$32,500
l4l
3
$36,000
4
154
$38,000
26.
21.
Realincomein year3 is approximately:
b.
a.
$36,000.
$34,490.
c.
Theinflationratefor year4 is approximately:
'1%.
b.
a.49a.
c.
a.
$27,481.
d.
$25,532.
9.2o/o.
tl.
l3Vo.
ECONrl10
EXAMl.FALL,2OO2
YERSIONA
28.
Inflation is defined as:
a.
an increase
in thepriceofone productrclativeto thepricesof otherproducts.
b.
an increase
in thegeneral(average)
pricelevelovertime.
c.
an increase
in thepricesof all productsovertime.
d.
an increase
in the demandfor all Droducts.
29.
Duringinflationaryperiods,thepurchasing
powerof ihedollar:
a.
b.
c.
d.
30.
is unaffected.
lncreases.
inflates.
decreases.
ln orderto beclassifiedasutemployed,a personmust:
a.
notha\c workcdduringthesurveywcck.
b.
be activelylookingfor work.
c.
currentlybe availablefor work.
d.
all of theabove.
Usetheinfo.mationin thetablebelowto answerthenexttwo ouestions.
YearI
Year3
Labor Force
TotalPopulation
Emploved
120million
t24 million
128million
220 million
225million
230 million
I 1 5 . 2m i l l i o n
118.42million
120.32million
workersin Ycar I is:
3 1 . The numberof unemDlovcd
b.
c.
d.
32.
The unemploymcnt
ratein Ycir J isi
a.
b.
c.
d.
t3.
t.9 million.
5.58million.
4.8million.
7.68million.
4 pcrccnt.
4.5 percent.
6 percent.
6.4 percent.
in labor
The unemployment
thatoccurswhcnworkersdo not havetheskills demanded
marketsis called
unemployment.
a.
b.
c.
d.
frictional
structural
seasonal
cyclical
ECON1ll0
EXAM1.FALL,2OO2
VERSIONA
34.
Whichof thefoltowingindividualswouldbe classifiedasfrictionallyunemployed?
a.
A collegegaduate that hasb€enoffered two jobs but is still lookng to seewhat
otherjobsmightbe available
business
is slow
A restaurant
managerthathasbeenlaid off bccause
b.
worker
has
prevented
from
working
dueto bad weather
c.
A construction
that
been
unlonls out on
An automobileworkerthathasbeenoffbecausetheautoworker's
d.
strike
35.
then:
If theeconomyis oporatingat full employment,
a.
theunemploymcnt
rateis zeropercent.
havcb€eneiiminated.
b.
structuralandfrictionalunemployment
rateis equalto thc naturalrate.
c.
theunemployment
d.
cyclicalunemployment
is g.oaterthanthesumof structuralandf.ictional
unemployment.
36.
for 2002?
Whichof thefollowingl@gkl!g]! b€ includedin U.S.GDPestimates
a.
A farmer'sspendingon a newtractorbuilt in 2002
b.
The valueof studentvolunteeractivitiesin thc fall of 2002
of haircutsin 2002
c.
Purchases
by U.S.houscholds
of American-made
shoesproducedin 2002
Purchases
by foreignhouseholds
d.
37.
within the
The totalmarketvalueof all final goodsandservicesproducedby resources
U.S.in a giventimeperiodis:
a.
GNP.
GDP.
b,
NDP.
C.
d.
NI.
38.
GDP addsup spendingonly on final goodsand
Theexpenditure
approachto calculating
servrces
to:
getan accurate
measure
ofchangcsin thepricelevelduringthetime periodin
a.
question.
the valueof
b.
avoidtheproblemof doublecounting,andthusovcrstating
productionin theeconomy.
maywork andproducein foreign
c.
accountfor thefactthatdomesticresourccs
countdes.
d.
eliminatetheeffectof inflationon thevalueof output.
QUESTIONS39 AND 40 ARE ON THE BACK OF THIS PAGE!
ECON 1110
EXAMT-FALL,2002
\.ERSION A
Usetheinformationin thetablebelowto answerthe nexttwo questions.
Consumptionspending $3,000billion
Govemmentspending
600billion
Investment
spending
240billion
-30 billion
Net exports
Capitalconsumption
allowance130billion
(depreciation)
Indirectbusiness
ta,\es
104billion
Net foreignfactorincomc
0 billion
39.
Grossdomesticproductequals:
$3,680billion.
b.
$4,058billion.
c_
$3,810billion.
d.
$3,870billion.
40.
Net domesticproductequals:
a.
$3,784billion.
b.
$3,680billion.
c.
$4,058billion.
d.
$3,814billion.
41.
Bubblein "a" on yourscantron;thisdenotes
examL
42.
Bubblein "a" on yourscantrontthisdenotesversionA.
Be sure you have answeredall 40 questions. Print yout lasl name,first name on lhe front of
this examand turn in both this exam and,tour comDletedscantron.
ECON lr l0 (MACRO)
EXAM I \'ERSION A
FALL 2OO2
L
2
3
1
5
6
.
.
.
.
.
B
D
C
C
A
D
8 .
9 .
10.
lt.
12.
13.
t4.
15.
16.
t1.
18.
19.
20.
2t.
22.
23.
24.
25.
26.
21.
28.
29.
30.
31.
32.
33.
34.
35.
36.
3't.
38.
39.
40.
B
D
A
A
A
B
A
A
A
D
D
B
c
D
C
B
A
A
D
C
B
D
D
c
C
B
A
C
B
B
B
C
B