Final Practice Exam - PRACTICE EXAM QUESTIONS 9.) 1.)...

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PRACTICE EXAM QUESTIONS 1.) Economics is concerned with choices A) that involve the wants of individuals. B) that involve the incomes of individuals. C) that involve money. D) made by individuals only when they are consuming goods or services. 2.) Scarcity exists because A) human wants are greater than what can be produced with the limited resources available. B) the world is too small. C) people are too greedy and refuse to share what they have with others. D) not enough new technology is being used to eliminate scarcity. 3.) For every choice a person makes it can be assumed that A) a good is involved. B) there is a fifty-fifty chance the choice was the wrong one. C) the chooser has full knowledge of the situation. D) some opportunity cost was involved. 4.) After the price of milk increases, David buys more juice and less cereal. For David, A) milk and juice are substitutes, and milk and cereal are complements. B) milk, juice, and cereal are all complements. C) milk, juice, and cereal are all substitutes. D) milk and juice are complements, and milk and cereal are substitutes. 5.) An increase in the price of a good leads to A) an increase in quantity supplied. B) no change in quantity supplied. C) a decrease in quantity supplied. D) a change in quantity supplied, but we cannot tell if it would be positive or negative. 6.) The new equilibrium quantity is the same as the old, but the price is lower. We know demand A) and supply both decreased. B) decreased and supply increased. C) and supply both increased. D) increased and supply decreased. 7.) Main cost of unemployment to society is the A) output lost due to the fact that the economy is not running at full employment. B) loss of self-respect of workers who are unemployed. C) government expenditures on unemployment benefits. D) loss of tax revenue due to the unemployment. 8.) Frictional unemployment will always exist bc A) the government will never institute full employment policies. B) the inflation rate would have to be negative and that will never happen. C) recessions are necessary once in a while to keep the economy healthy. D) some workers quit their jobs without having another job already lined up. 9.) The purchasing power of money increases when A) the inflation rate increases. B) there are more dollars in the economy. C) there is inflation. D) there is deflation. 10.) Prices have been rising 6 percent a year for twenty years. nominal rate of interest is 12%. The real rate of interest is A. 4% B. 10% C. 6% D. 12% 11.) The two main methods of measuring GDP are the A) B)
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This test prep was uploaded on 03/29/2008 for the course ECON 004 taught by Professor Graf,pauledwin during the Fall '07 term at Pennsylvania State University, University Park.

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Final Practice Exam - PRACTICE EXAM QUESTIONS 9.) 1.)...

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