Econ 1020 w2014 midterm test v1 - Name Student number Econ...

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Chapter 16 / Exercise 1
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Name: _____________________________Student number: ____________________Econ 1020 A07 Introduction to MacroeconomicsMidterm TestMarch 4, 2014General instructions:1.Answer all questions.2.If you do not understand a question, raise your hand for help.***********************************************************************Part A. Multiple Choice (45 points)Each question is worth 1.5 points.Put answers on your bubble sheet using pencil.1. Ben says that "An increase in the tax on beer will raise its price." Holly argues that "Taxes should be increased on beer because college students drink too much." We can conclude that:A) Ben's statement is normative, but Holly's is positive.B) Holly's statement is normative, but Ben's is positive.C) Both statements are normative.D) Both statements are positive.
2. Refer to the above diagram. The equation which shows the relationship between Y and X is:
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Chapter 16 / Exercise 1
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3. The basic reason for the production of capital goods is to:
4. The coordination problem in command economies became more difficult as:
5. Assume a drought in the Great Plains reduces the supply of wheat. Noting that wheat is a basic ingredient in the production of bread and that potatoes are a consumer substitute for bread,we would expect the price of wheat to:A) rise, the supply of bread to increase, and the demand for potatoes to increase.B) rise, the supply of bread to decrease, and the demand for potatoes to increase.C) rise, the supply of bread to decrease, and the demand for potatoes to decrease.D) fall, the supply of bread to increase, and the demand for potatoes to increase.
6. Refer to the graph below, showing the market supply and demand for a product. Assume that the market is initially in equilibrium where D1and S1intersect. If consumer incomes decreased and production costs increased, then new equilibrium would be at:
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7. If current prices are used to calculate the value of total output produced by a country during aspecific period of time, the result is called:

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