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QEP Post Math Part 2 — Answers Questions 1-15 on a separate 101864 Par L par score

QEP Post Math Part 2 — Answers Questions 1-15 on a separate 101864 Par L par

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1) Suppose you decide to attend summer school and that this is considered a rational choice. When making this

choice,

A) you have made a positive statement.

B) you have used the ceteris paribus assumption.

C) you must have considered the social interest.

D) you must ignore the problem of scarcity.

E) you considered the marginal cost and marginal benefit of your choice.

2) The expenditure approach to measuring GDP is done by using data on only

A) consumption expenditure and investment.

B) wages, rent, interest, and profit.

C) consumption expenditure, investment, government expenditure on goods and services, and net exports

of goods and services.

D) consumption expenditure.

E) consumption expenditure, investment, and government expenditures.

3) The largest expenditure category in the United States is

A) net exports of goods and services.

B) investment.

C) wages.

D) consumption expenditure.

E) government expenditure on goods and services.

4) Economic growth is a sustained expansion of production possibilities, as measured by the increase in

________ over time.

A) population

B) the price level

C) inflation

D) employment

E) real GDP

5) The "value of money"

A) is the quantity of goods and services that a unit of money can buy.

B) increases during inflationary periods.

C) is directly related to the price level.

D) increases during economic expansions.

E) is determined by Fed regulations.

6) If the quantity of money supplied ________ the quantity demanded, in the long run the value of money

________.

A) exceeds; falls as people spend their surplus money

B) is less than; does not change unless the Fed increases the money supply

C) equals; equals zero

D) is less than; falls as people spend their surplus money

E) exceeds; rises as people buy bonds

7) Inflation is a tax because as the government ________ the quantity of money, the price level ________, and

the purchasing power of households' money ________.

A) decreases; rises; decreases

B) decreases; falls; decreases

C) increases; rises; decreases

D) does not change; rises; increases

E) increases; rises; increases

Figure 3-1

8) Refer to Figure 3-1. If the product represented is an inferior good, an increase in income would be

represented by a movement from

A) B to A. B) A to B. C) D2 to D1. D) D1 to D2.

9) Refer to Figure 3-1. A decrease in the price of the product would be represented by a movement from

A) D2 to D1. B) B to A. C) A to B. D) D1 to D2.

10) Suppose that when the price of raspberries increases, Lonnie increases his purchases of papayas. To Lonnie,

A) raspberries and papayas are normal goods. B) raspberries and papayas are complements.

C) raspberries and papayas are substitutes. D) raspberries and papayas are inferior goods.

11) During the recession:

A) casual dining restaurants like Olive Garden and Red Lobster experienced increased demand and

fast-food restaurants like McDonald's and Subway experienced decreased demand.

B) both casual dining restaurants like Olive Garden and Red Lobster and fast-food restaurants like

McDonald's and Subway experienced decreased demand.

C) both casual dining restaurants like Olive Garden and Red Lobster and fast-food restaurants like

McDonald's and Subway experienced increased demand.

D) casual dining restaurants like Olive Garden and Red Lobster experienced decreased demand and

fast-food restaurants like McDonald's and Subway experienced increased demand.

Figure 3-2

12) Refer to Figure 3-2. An increase in price of inputs would be represented by a movement from

A) S2 to S1. B) A to B. C) B to A. D) S1 to S2.

13) Refer to Figure 3-2. A decrease in the price of the product would be represented by a movement from

A) A to B. B) S1 to S2. C) S2 to S1. D) B to A.

Figure 3-5

14) Refer to Figure 3-5. At a price of $15,

A) there would be a surplus of 6 units. B) there would be a surplus of 4 units.

C) there would be a shortage of 4 units. D) there would be a shortage of 2 units.

15) Let D= demand, S = supply, P = equilibrium price, Q= equilibrium quantity. What happens in the market

for tropical hardwood trees if the governments restrict the amount of forest lands that can be logged?

A) D and S decrease, P and Q increase

B) D decreases, S no change, P and Q decrease

C) S decreases, D no change, P increases, Q decreases

D) D no change, S decreases, P increases, Q increases