ECON 252 Exam 1 Questions with Verified Solutions Graded A+
Industrial machinery is an example of
.
a. a factor of production that in the past was an output from the production process.
b. technological knowledge.
c. a production function.
d. an item which always has the property called constant returns to scale. - Answers a. a factor
of production that in the past was an output from the production process.
The inflation rate is calculated
.
a. by determining the change in the price index from the preceding period. (Incorrect)
b. by adding up the price increases of all goods and services.
c. by computing a simple average of the price increases for all goods and services.
d. by determining the percentage increase in the price index from the preceding period. -
Answers ?
Net exports equal
.
a. exports plus imports.
b. exports minus imports.
c. imports minus exports.
d. GDP minus imports. - Answers b. exports minus imports.
Trade between countries tends to
.
a. reduce both competition and specialization.
b. reduce competition and increase specialization.
c. increase competition and reduce specialization.
, d. increase both competition and specialization. - Answers d. increase both competition and
specialization.
A rational decision maker
.
a. ignores marginal changes and focuses instead on "the big picture."
b. ignores the likely effects of government policies when he or she makes choices.
c. takes an action only if the marginal benefit of that action exceeds the marginal cost of that
action.
d. takes an action only if the combined benefits of that action and previous actions exceed the
combined costs of that action and previous actions. - Answers c. takes an action only if the
marginal benefit of that action exceeds the marginal cost of that action.
According to the circular-flow diagram, GDP
.
a. can be computed as payments firms make to factors of production plus revenues they
receive from the sales of goods and services.
b. can be computed as the revenue firms receive from the sales of goods and services minus
the payments they make to factors of production.
c. can be computed as either the revenue firms receive from the sales of goods and services or
the payments firms make to factors of production.
d. can be computed as the payments firms make to factors of production, but not as revenues
they receive from the sales of goods and services. - Answers c. can be computed as either the
revenue firms receive from the sales of goods and services or the payments firms make to
factors of production.
Janelle earned a salary of $40,000 in 1996 and $65,000 in 2006. The consumer price index was
160 in 1996 and 266 in 2006. Janelle's 2006 salary in 1996 dollars is
.
a. $39,097.74.
b. $43,062.50.
c. $68,900.00.
d. $108,062.50. - Answers a. $39,097.74.
Industrial machinery is an example of
.
a. a factor of production that in the past was an output from the production process.
b. technological knowledge.
c. a production function.
d. an item which always has the property called constant returns to scale. - Answers a. a factor
of production that in the past was an output from the production process.
The inflation rate is calculated
.
a. by determining the change in the price index from the preceding period. (Incorrect)
b. by adding up the price increases of all goods and services.
c. by computing a simple average of the price increases for all goods and services.
d. by determining the percentage increase in the price index from the preceding period. -
Answers ?
Net exports equal
.
a. exports plus imports.
b. exports minus imports.
c. imports minus exports.
d. GDP minus imports. - Answers b. exports minus imports.
Trade between countries tends to
.
a. reduce both competition and specialization.
b. reduce competition and increase specialization.
c. increase competition and reduce specialization.
, d. increase both competition and specialization. - Answers d. increase both competition and
specialization.
A rational decision maker
.
a. ignores marginal changes and focuses instead on "the big picture."
b. ignores the likely effects of government policies when he or she makes choices.
c. takes an action only if the marginal benefit of that action exceeds the marginal cost of that
action.
d. takes an action only if the combined benefits of that action and previous actions exceed the
combined costs of that action and previous actions. - Answers c. takes an action only if the
marginal benefit of that action exceeds the marginal cost of that action.
According to the circular-flow diagram, GDP
.
a. can be computed as payments firms make to factors of production plus revenues they
receive from the sales of goods and services.
b. can be computed as the revenue firms receive from the sales of goods and services minus
the payments they make to factors of production.
c. can be computed as either the revenue firms receive from the sales of goods and services or
the payments firms make to factors of production.
d. can be computed as the payments firms make to factors of production, but not as revenues
they receive from the sales of goods and services. - Answers c. can be computed as either the
revenue firms receive from the sales of goods and services or the payments firms make to
factors of production.
Janelle earned a salary of $40,000 in 1996 and $65,000 in 2006. The consumer price index was
160 in 1996 and 266 in 2006. Janelle's 2006 salary in 1996 dollars is
.
a. $39,097.74.
b. $43,062.50.
c. $68,900.00.
d. $108,062.50. - Answers a. $39,097.74.
