Download ECON 2301 (Lee) Exam 1 Study Guide 35 Multiple

ECON 2301 (Lee) Exam 1 Study Guide
35 Multiple-Choice Questions.
Test date: May 23 in class. Time allowance: 90 minutes. Bring scantron form (882-E) and pencil.
Textbook chapters: 1, 2, 4, 23
[These are questions. Graphs and numbers included in questions have been omitted.]
1. The word “economy” comes from the Greek word oikonomos, which means
2. The phenomenon of scarcity stems from the fact that
3. The phrase “no such thing as a free lunch” means
4. In economics, the opportunity cost of something is
5. For which of the following persons would the opportunity cost of going to college be highest?
6. One reason we need government, even in a market economy, is that
7. In the markets for the factors of production in the circular-flow diagram, (HINT: Who does what?)
8. Refer to the above figure. Which arrow represents the flow of spending by households?
9. Refer to the above figure. Which arrow represents the flow of income payments?
10. Refer to the above figure. If the economy moves from point Y and point Z, it must give up
11. Refer to the above figure. It is not possible for this economy to produce at point
12. Refer to the above figure. Suppose this economy is producing at point W. Which of the following
statements would best explain this situation?
13. Which of the following would likely be a topic of macroeconomics rather than microeconomics?
14. Refer to the above figure. The movement from point A to point B on the graph is caused by
15. If something happens to change the quantity demanded at a given price, then
16. You lose your job and, as a result, you buy more iTunes music downloads and fewer CDs. This shows that
you consider iTunes music downloads to be a(n)
17. You wear either shorts or sweatpants every day. You notice that sweatpants have gone on sale, so your
demand for
18. Which of the following demonstrates the law of supply?
19. The supply curve for gasoline shifts to the right in response to
20. Refer to the above figure. In this market, equilibrium price and quantity, respectively, are
21. Refer to the above figure. If price in this market is currently $14, then there would be a(n)
22. A hurricane destroys many banana trees in Mexico would cause a(n)
23. Ramen noodles are inferior goods. What would happen to the equilibrium price and quantity of Ramen
noodles if the economy is in a recession and so household income falls?
24. Refer to the above figure. Panel (c) shows which of the following?
25. Refer to the above figure. Which panel best represents the change in the market for pizza delivery in a
college town when students return for a new semester at the university?
26.
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31.
32.
The circular-flow concept of an economy implies that
If an economy’s GDP falls, then it must be the case that the economy’s
GDP is defined as the
Which of the following is an example of a final good?
Which of the following household spending is part of investment in GDP?
Which of the following is part of the government purchase component in GDP?
Al’s Aluminum Company sells $3 million worth of aluminum to Shiny Foil Company, which uses the aluminum to
make aluminum foil. Shiny Foil Company sells $5 million worth of aluminum foil to households. The transactions
just described contribute how much to GDP?
33. If a U.S. resident buys a Samsung smartphone made in Korea by a Korean firm, then
34. If the prices of all goods and services produced in the economy rose while the quantity of all goods and services
stayed the same, which would rise?
35. Which of the following statements about GDP is correct?