pef16samplefinal1 - Practice Final 1 Section I MULTIPLE...

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Practice Final 1 Section I MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) In which market structure do firms exist in very large numbers, each firm produces an identical product, and there is freedom of entry and exit? A) only monopolistic competition B) oligopoly C) monopoly D) only perfect competition E) both perfect competition and monopolistic competition Figure 1 2) Refer to Figure 1 . Ceteris paribus , a decrease in productivity would be represented by a movement from 3) An indifference curve shows 4) One of the components of the balance of payments is 5) If real GDP is greater than potential GDP, eventually ________ and the price level ________. A) the aggregate demand curve shifts leftward; rises B) the aggregate demand curve shifts rightward; falls C) the aggregate supply curve shifts leftward; rises D) the aggregate supply curve shifts rightward; falls E) potential GDP increases; falls 6) At the grocery store, Bob can buy yogurt (Y) for $2 per jar and milk (M) for $3 per quart. If he has $20 to spend, Bob's budget constraint is 7) A cross-price elasticity of -0.90 indicates that two goods are
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2 8) The unemployment rate tends to understate the true extent of joblessness because 9) Caroline is an artist. She purchases canvas, paints, brushes, and accessories for $75. She sells one of her original paintings to an art gallery for $1,500, which, in turn, sells it to an art lover for $4,500. What is the contribution to GDP of Caroline's original painting? A) $1,425 B) $1,500 C) $3,000 D) $4,425 E) 4,500
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