Econ 252 Exam Questions With Correct
Answers | 100% VERIFIED
Statements that claim to describe the way things are: - ANSWER- are positive
statements
can be tested for accuracy
Both B and C above
In determining how to use their resources, resource owners are motivated by: -
ANSWER- self-interest
Produced goods that are used in the production of other goods are: - ANSWER- capital
The basic goal in dealing with the problem of scarcity is: - ANSWER- to produce as
much consumer satisfaction as possible with the limited resources available
At the optimal level of an activity: - ANSWER- its marginal benefit must be equal to its
marginal cost
If per capita output quadruples in the next fifty years: - ANSWER- human wants will still
exceed the production possible with the limited resources available
"American automakers benefit from a tariff on imported automobiles.
Therefore, tariffs on imported automobiles must be good for the American economy."
This statement is an example of the: - ANSWER- fallacy of composition
Developed ability that increases a person's productivity is: - ANSWER- human capital
The value of the best alternative surrendered when a choice is made is: - ANSWER-
opportunity cost
Using dollar price as the rationing device means: - ANSWER- that resources will be
rationed to the use that is most highly valued by consumers
In a market economy, the question of "what to produce" is determined primarily by: -
ANSWER- consumer demand
When an economy is operating efficiently: - ANSWER- it is producing the maximum
output with the available resources and technology
Self-sufficiency: - ANSWER- yields a very low standard of living
The capitalist vision favors: - ANSWER- private ownership of resources
,market determination of prices
limited government
All of the above
According to the capitalist vision: - ANSWER- private property leads to the efficient use
of resources
In a market economy, the question of "how to produce" is determined primarily by: -
ANSWER- the least cost method of production
Producing according to comparative advantage: - ANSWER- means producing where
one has a lower opportunity cost than other producers
leads to a higher standard of living
Both of the above
A trade is beneficial to a person: - ANSWER- when that person values what is received
in the trade more than what is given up
In a market economy, the question of "for whom to produce" is determined primarily by:
- ANSWER- the distribution of income
Ned hires Barney to landscape Ned's front yard. The new landscaping increases the
value of Ned's house and also increases the value of Homer's house next door. This is
an example of: - ANSWER- an external benefit
Technological advance: - ANSWER- is the ability to produce more output per resource
An increase in the price level is - ANSWER- Inflation
Joyce graduates with a degree in industrial engineering in May. After searching for three
months, Joyce lands a job as an industrial engineer with a heavy equipment
manufacturer. While Joyce was looking for work, she was: - ANSWER- frictionally
unemployed
The natural unemployment rate is: - ANSWER- the lowest unemployment rate that can
be sustained without causing increasing inflation
Job destruction caused by technological advance: - ANSWER- frees up labor for new
types of production
To be counted as employed: - ANSWER- the worker must be 16 years old or older
, Joyce loses her job with the heavy equipment manufacturer due to new technology that
decreases the need for industrial engineers. She searches for a job for six months, but
finds that there are no openings for industrial engineers. While Joyce was looking for
work, she was: - ANSWER- structurally unemployed
The largest category in the market basket that is used to calculate the CPI is: -
ANSWER- housing
Anyone who does not have a paying job and is not actively seeking employment is: -
ANSWER- not in the labor force
A period of unemployment: - ANSWER- can be financially devastating for the household
affected
When output is measured as the sum of Total Expenditures: - ANSWER- the result is
GDP
On a simple circular flow diagram: - ANSWER- households provide resources
households consume goods and services
Both of the above
On a simple circular flow diagram: - ANSWER- firms use resources to produce goods
and services
consumption spending is revenue for firms
Both A and C above
The phase of the business cycle when Real GDP is decreasing is: - ANSWER-
Contraction
Real GDP is GDP: - ANSWER- adjusted for changes in the price level
Which of the following statements is true? - ANSWER- Consumption is the largest
component of GDP
Nominal GDP may increase: - ANSWER- if there is an increase in production
if there is an increase in the price level
even if Real GDP decreases
All of the above
Comparisons of GDP between developed countries and less developed countries will
tend to overstate the difference in standard of living because: - ANSWER- GDP does
not include nonmarket production
Answers | 100% VERIFIED
Statements that claim to describe the way things are: - ANSWER- are positive
statements
can be tested for accuracy
Both B and C above
In determining how to use their resources, resource owners are motivated by: -
ANSWER- self-interest
Produced goods that are used in the production of other goods are: - ANSWER- capital
The basic goal in dealing with the problem of scarcity is: - ANSWER- to produce as
much consumer satisfaction as possible with the limited resources available
At the optimal level of an activity: - ANSWER- its marginal benefit must be equal to its
marginal cost
If per capita output quadruples in the next fifty years: - ANSWER- human wants will still
exceed the production possible with the limited resources available
"American automakers benefit from a tariff on imported automobiles.
Therefore, tariffs on imported automobiles must be good for the American economy."
This statement is an example of the: - ANSWER- fallacy of composition
Developed ability that increases a person's productivity is: - ANSWER- human capital
The value of the best alternative surrendered when a choice is made is: - ANSWER-
opportunity cost
Using dollar price as the rationing device means: - ANSWER- that resources will be
rationed to the use that is most highly valued by consumers
In a market economy, the question of "what to produce" is determined primarily by: -
ANSWER- consumer demand
When an economy is operating efficiently: - ANSWER- it is producing the maximum
output with the available resources and technology
Self-sufficiency: - ANSWER- yields a very low standard of living
The capitalist vision favors: - ANSWER- private ownership of resources
,market determination of prices
limited government
All of the above
According to the capitalist vision: - ANSWER- private property leads to the efficient use
of resources
In a market economy, the question of "how to produce" is determined primarily by: -
ANSWER- the least cost method of production
Producing according to comparative advantage: - ANSWER- means producing where
one has a lower opportunity cost than other producers
leads to a higher standard of living
Both of the above
A trade is beneficial to a person: - ANSWER- when that person values what is received
in the trade more than what is given up
In a market economy, the question of "for whom to produce" is determined primarily by:
- ANSWER- the distribution of income
Ned hires Barney to landscape Ned's front yard. The new landscaping increases the
value of Ned's house and also increases the value of Homer's house next door. This is
an example of: - ANSWER- an external benefit
Technological advance: - ANSWER- is the ability to produce more output per resource
An increase in the price level is - ANSWER- Inflation
Joyce graduates with a degree in industrial engineering in May. After searching for three
months, Joyce lands a job as an industrial engineer with a heavy equipment
manufacturer. While Joyce was looking for work, she was: - ANSWER- frictionally
unemployed
The natural unemployment rate is: - ANSWER- the lowest unemployment rate that can
be sustained without causing increasing inflation
Job destruction caused by technological advance: - ANSWER- frees up labor for new
types of production
To be counted as employed: - ANSWER- the worker must be 16 years old or older
, Joyce loses her job with the heavy equipment manufacturer due to new technology that
decreases the need for industrial engineers. She searches for a job for six months, but
finds that there are no openings for industrial engineers. While Joyce was looking for
work, she was: - ANSWER- structurally unemployed
The largest category in the market basket that is used to calculate the CPI is: -
ANSWER- housing
Anyone who does not have a paying job and is not actively seeking employment is: -
ANSWER- not in the labor force
A period of unemployment: - ANSWER- can be financially devastating for the household
affected
When output is measured as the sum of Total Expenditures: - ANSWER- the result is
GDP
On a simple circular flow diagram: - ANSWER- households provide resources
households consume goods and services
Both of the above
On a simple circular flow diagram: - ANSWER- firms use resources to produce goods
and services
consumption spending is revenue for firms
Both A and C above
The phase of the business cycle when Real GDP is decreasing is: - ANSWER-
Contraction
Real GDP is GDP: - ANSWER- adjusted for changes in the price level
Which of the following statements is true? - ANSWER- Consumption is the largest
component of GDP
Nominal GDP may increase: - ANSWER- if there is an increase in production
if there is an increase in the price level
even if Real GDP decreases
All of the above
Comparisons of GDP between developed countries and less developed countries will
tend to overstate the difference in standard of living because: - ANSWER- GDP does
not include nonmarket production
