Download Key - KSU Web Home

ECON 1100 – Global Economics (Section 05)
Exam #2 – Summer 2011 (Version B) – Answer Key
1.
The Gini-Coefficient provides a quantitative measure of
A.
income equality/inequality within a society.
2.
During the past six decades, inflation rates in the U.S. (reported on an annual
basis) were
D.
relatively low from 1949 through 1967, then relatively high from 1968
through 1982, and finally relatively low from 1983 through 2010.
3.
Bobby owns a one of a kind “Kitty Karry-All” doll. His reservation price as a
seller of this item is $20. Cindy’s reservation price as a buyer of this item is
$120. If Bobby sells this doll to Cindy, the resulting Social Surplus would be
equal to
B.
$100.
4.
_____________________ refers to the production of goods and services, valued
in each period according to current period prices.
A.
Nominal GDP
5.
The present economic system of Germany would be most accurately described as
A.
a Mixed Economy.
6.
Suppose that between 2012 and 2015 the Unemployment Rate in Japan decreased
from 9.6% to 8.1% while the inflation rate increased from 1.1% to 3.4%. It
follows that the value of the Misery Index in Japan in 2015 would be
______________________ the value of the Misery Index in Japan in 2012.
A.
greater than
7.
Demand
D.
More than one (perhaps all) of the above answers is correct.
8.
Which of the following is a basic characteristic of Capitalism?
A.
Factors of production are privately owned and operated for a profit.
9.
Focusing on the “household at the 40th Percentile of earned income” in the United
States, over the past three decades the “real income” of the household at this
cutoff level
A.
increased from $41,950 to $45,207 between 1980 and 1989, and then
further increased to $49,510 by 2007.
10.
When purchasing a new car last year, Ralph chose to buy a hybrid vehicle partly
because doing so gave him an income tax credit which reduced his state income
taxes by $1,000. This observation illustrates how the behavior of an individual
can be influenced by
C.
a material incentive.
11.
The Phillips Curve
D.
illustrates the short term tradeoff between unemployment and inflation
that an economy faces.
12.
The “outward shift” of the PPC (from “1987 PPC” to “2011 PPC”) which
occurred between 1987 and 2011 could be best described as
C.
Economic Growth.
13.
If this society had instead chosen “Point B” in 1987, then the relevant PPC in
2011 would
A.
lie somewhere below the curve labeled “2011 PPC” (i.e., be closer to the
origin than the curve labeled “2011 PPC”).
14.
__________________ is the subfield of economics that compares the structure
and performance of different types of economic organization.
C.
Comparative Economic Systems
15.
Suppose that the Lorenz Curve for Brazil in 2011 lies completely below the
Lorenz Curve for Germany in 2011. This implies that
C.
incomes are distributed more equally in Germany than in Brazil.
16.
Which of the following demonstrates the “Law of Demand”?
D.
Joan chooses to buy fewer donuts at $8.50 per dozen than she chooses to
buy at $7.50 per dozen.
17.
Suppose that “County X” were to realize a constant Real GDP Growth Rate of 2%
per year. It follows that Real GDP would double
A.
in roughly 35 years.
18.
Under “Indicative Planning”
C.
the government relies upon the voluntary response of the private sector to
a set of guidelines jointly formulated by government, industry, and labor.
19.
Adam Smith was
A.
an 18th century Scottish economist.
20.
Total Social Surplus
C.
is generally equal to the sum of Total Consumers’ Surplus and Total
Producers’ Surplus.
21.
Which of the following countries experienced an annual inflation rate of roughly
12,563% in 2008?
B.
Zimbabwe.
22.
__________________ refers to “attempts to convince individuals to behave in a
certain manner because doing so is the right thing to do.”
B.
Moral Persuasion
23.
In a free market, the equilibrium price and equilibrium quantity of trade are
determined by
C.
the behavior of both the buyers and the sellers in the market.
24.
Per Capita GDP in the United States as a whole is approximately
A.
$46,000, greater than the Per Capita GDP (PPP) of approximately $32,900
for the European Union as a whole.
25.
Consider a market in which there is currently “Inefficiency from too much trade.”
This observation suggests that
A.
we are trading some units for which buyer’s reservation price is less than
seller’s reservation price.
26.
In which of the following countries do individuals enjoy the greatest amount of
Economic Freedom?
C.
Hong Kong.
27.
In this market there would be ____________ at a price of $9.95.
C.
excess demand
28.
If 850 units were traded, Deadweight-Loss would be
A.
positive, but less than “area (a).”
29.
In equilibrium
C.
760 pizzas are purchased/sold.
30.
Suppose that in 2004, the value of the Gini-Coefficient in the United States was
0.48, while the value of the Gini-Coefficient in Sweden was 0.24. These values
directly suggest that in 2004
B.
incomes were distributed “more equally” in Sweden than in the United
States.
31.
Between 1980 and 2007 the “percentage of income earned by the Top 10% of
households in the United States”
A.
increased from roughly 32.13% of society’s income to roughly 48.05% of
society’s income.
32.
The World Bank is
C.
a lending agency which makes long-term low interest rate loans and
provides technical assistance to Less Developed Countries.
33.
_________________ refers to the skills, education, and training which individuals
in the labor force possess.
D.
Human Capital
34.
The _____________________ refers to the “trap” in which countries are poor
because they cannot afford to save and invest, but they cannot easily save and
invest because they are poor.
D.
Vicious Cycle of Poverty
35.
The value of the “Misery Index” in the U.S. in March 2011 was
C.
11.48, a value which is above the Post WW-II mean value of 9.45.
36.
In order to include many different goods and services in a single aggregate
measure, GDP is computed by weighting goods/services according to
C.
the market prices of the goods/services.
37.
In 2007, Real GDP per capita in the United States was _________________ the
value of Real GDP per capita in the United States in 1908.
B.
7.9 times larger than
38.
The economy of the “former Soviet Union”
C.
perhaps provides the best example of a large society with an economic
system close to “pure socialism.”
39.
The ____________________ are high income nations that have market
economies based on large stocks of technologically advanced capital and a welleducated labor force.
B.
Industrially Advanced Countries
40.
Life Expectancy at Birth in the United States is roughly
C.
78.11 years, longer than the value for Mexico (76.06 years) but shorter
than the value for Italy (80.2 years).