Econ 104 Final exam |124 Questions with Answers

Econ 104 Final exam |124 Questions with Answers
Examining the conditions that could lead to a recession in an economy is an example of a
macroeconomics topic. - -True

-Every individual, no matter how rich or poor, is faced with making trade-offs. - -True

-When voluntary exchange takes place, only one party gains from the exchange. - -False

-A college must decide if it wants to offer more Internet-based classes. This decision
involves answering the economic question of "what to produce." - -True

-One desirable outcome of a market economy is that it leads to a more equitable
distribution of income. - -False

-An economic model is a simplified version of reality used to analyze real-world economic
situations. - -True

-The decisions Apple makes in determining production levels for its iPhone is an example
of a macroeconomics topic. - -False

-Economic resources are also called factors of production. - -true

-A curved line has slope values that change at every point. - -true

-A straight line has a slope of zero. - -false

-If a country is producing efficiently and is on the production possibilities frontier, the only
way to produce more of one good is to produce less of the other. - -false

-If a country produces only two goods, then it is not possible to have a comparative
advantage in the production of both those goods. - -true

-Any output combination outside a production possibility frontier is associated with
unused or underutilized resources. - -false

-An increase in the labor force shifts the production possibility frontier inwards over time.
- -false

-If Sanjaya can shuck more oysters in one hour than Tatiana, then Sanjaya has a
comparative advantage in shucking oysters. - -false

-The basis for trade is comparative advantage, not absolute advantage. - -True

, -In a two-good, two country world, if one country has an absolute advantage in the
production of both goods, it cannot benefit by trading with the other country. - -false

-For a person to have a comparative advantage in producing a product, she must be able to
produce that product at a lower opportunity cost than her competitors. - -true

-It is possible to have a comparative advantage in producing a good or service without
having an absolute advantage. - -true

-An increase in the unemployment rate may be represented as a movement from a point
on the production possibilities frontier to a point inside the frontier. - -true

-The full-employment rate of unemployment is zero. - -false

-In general, economists rely more heavily on the establishment survey rather than the
household survey to evaluate the state of the labor market. - -true

-If Ethel sold her 2003 Ford Focus for $2,250 in 2017, the sale of her car contributed
$2,250 to 2017 GDP. - -false

-If an increase in residential burglaries results in households spending more money on
security systems, GDP will rise. - -true

-Consumption is negatively related to stock market wealth but positively related to taxes
and tax rates. - -false

-If aggregate expenditures rise unexpectedly, then inventories will also rise unexpectedly. -
-false

-Services are the most interest rate sensitive component of consumption. - -false

-Investment is the least cyclical component of aggregate expenditures. - -true

-The 'job-loss' recovery occurred following the 2001 recession. - -true

-Positive real interest rates imply that if you save today, you can purchase a smaller basket
of goods and services in the future, relative to the basket you could have consumed today. -
-false

-The higher the marginal propensity to consume the more powerful tax policy is to
influencing consumption. - -true

-According to the results of the estimated consumption function, consumption is less
sensitive to changes in stock market wealth relative to changes in real estate wealth. - -true