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ECN 211 Review 1_BB

# ECN 211 Review 1_BB - ECN 211 Macroeconomic Principles...

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ECN 211 Macroeconomic Principles Review#1

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Q1) If a student stated, “ASU should  increase tuition fees,” this statement would  be considered a [A] normative statement. [B] fallacy of composition. [C] association as causation. [D] ceteris paribus. [E] positive statement.

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Q2.  Assume initially the economy is at the equilibrium point E.  Assume the  good is a normal good.  If consumers’ incomes decrease, while at the  same time suppliers become pessimistic about future profitability.  The  new equilibrium will be? A) A B) B C) C D) D E) G Q \$ D 1 D 2 D 3 S 1 S 2 S 3 A B C D E F G H I
Q3) Which would not cause any kind of an  outward shift of a nation’s PPC. a. An improvement in the general level of  education b.Technological innovation c. An increase in the productivity of workers. d.An increase in the population. e.A flood which renders thousands of acres  of farmland unusable.

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Q4) Suppose the demand curve is: P = 100 – Qd and the supply curve is : P = 25 + 2Qs. What is the equilibrium price and quantity. A) P= 50, Q=50 B) P=75, Q=25 C) P=100, Q=25 D) P=50, Q=75 E) None of the above.
Q5) Suppose the demand curve for good X is: Qd x  = 1000 – 0.3P x  + 0.1Inc - 0.1P Z  + 5P Which of the following is true? A) X is a normal good.  Also X and A are substitutes. B) X is a normal good.  Also X and Z are substitutes. C) X is a normal good.  Also X and Z are complements. D) X is an inferior good.  Also X and A are complements. E) Both A and C are correct.

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Q6) If society begins by producing 3 units of X and 4 units  of Y, and then alters production so that it is now  producing 4 units of X and 4 units of Y, and we know that  the quantity and quality of resources were unchanged  then [A] resources were being efficiently utilized at 3 units of X  and 4 units  [B] society has moved along its  PPC .
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ECN 211 Review 1_BB - ECN 211 Macroeconomic Principles...

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