Macro quiz #1 PDF

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EBEN 101- MACROECONOMICS –QUIZ ON CHAPTER 1 (30 points) A-Multiple Choice -Answer any 14 of the following (14 points- 1 point each) 1-Which of the following is an incentive to read your economics text? C a. The title of the book. b. The time it takes you to read a chapter. c. Better grades in economics. 2-Economics is the study of __C___. A. human behavior under stressful situations B. the interaction of people in social situations C. scarcity of resources or goods 3 -Which of the following is an incentive to read your economics text? F d. The title of the book. e. The time it takes you to read a chapter. f. Better grades in economics. 4- All of the following are example of economic resources, except _B____. A. land B. licenses C. labor & capital 5- What is the opportunity cost of reading your economics text? A a. Spending time with friends or family. b. The cost of the economics text. c. Better grades in economics. 6- When someone decides to do something that provides the most personal satisfaction, it is called ___B__ by economists. A. irrational self-interest B. rational self-interest C. greed 7-Value-free analysis is called _A____. A. positive analysis B. brainstorming C. normative analysis 8-Normative analysis __C____. A. is used when no value judgments are imposed on another B. is known as dynamic analysis C. is used when a value judgment is imposed on another 9- Microeconomics is the study of ____ , whereas macroeconomics is the study of __C__. A. Small business economics; large business economics B. Small markets; large markets 1

C. Economics at the individual level; economics as a whole 10- One of the benefits of specialization is: C a. Less pollution. b. More equality. c. Increased productivity. 11-Foregoing the highest valued alternative when a choice is made is called a(n) ___B__. A. sunk cost B. opportunity cost C. lost cost 12-A tradeoff occurs when C___. A. two people agree to trade goods, one for the other B. one product is exchanged for another in a store C. someone gives up one good or activity to obtain another 13-The production possibility curve is __B___. A. a chart that shows profit outcomes for different combinations of goods and services B. a graph that shows all combinations of quantities of goods and services, assuming use of full capacity C. a graph that shows all combinations of quantities of goods and services, assuming use is less than full capacity 14- Specialization occurs when __C___. A. a producer has limited resources and can only produce one product or service B. a producer can only produce one product or service C. one trading partner is more proficient at producing one product and puts more of the resources into that production and trades their excess for products they do not produce 15-If country A is able to produce furniture at a lower cost than country B, we would say that country A has a(n): A a. Absolute advantage. b. Comparative advantage.

c.

No advantage

16-Private property rights is the _C___. A. right of someone to own his or her house and contents but no other property B. the right of the public to own private property C. absolute right to own property of any kind privately

B-True/False answer any 14 (14 points- 1 point each) 1-Scarcity is the limited nature of society’s resources. T 2- Incentive is something that motivates a person to act. T 3- Going to a party the night before your midterm leaves less time for studying involves tradeoffs. T 4- Equality is when society gets the most from its scarce resources. F 5- Marginal change is something that induces a person to act, i.e the prospect of a reward /punishment. F 6-The invisible hand works as the interaction of buyers and sellers determines prices. T 2

7-Marginal change is one that incrementally alters an existing plan. T 8- Macroeconomics deals with the behavior of individual economic units. F 9-Market failure is when the market succeeds to allocate society’s resources efficiently. F 10- Public policy may promote efficiency. T 11- A Country’s Standard of Living Depends on Its Ability to Produce Goods & Services. T 12- Productivity is the amount of goods and services produced per unit of labor. T 13- Inflation decreases in the general level of prices. F 14-Having more money to buy stuff requires working longer hours, which leaves less time for leisure can be a good example of tradeoffs. T 15- Efficiency is when prosperity is distributed uniformly among society’s members. F

C-Answer the following question: (2 points) 1- Give two examples of important trade-offs you face in your daily life. ANS:

1) For going to sleep late, my trade off is being less productive the next day. 2) For eating junky/unhealthy foods, my trade off is that I’m fat.

3...