08Spr_MacroExam1_versionA

08Spr_MacroExam1_versionA - 06E:002:AAA & BBB Principles of...

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Exam 1 Version A Name ___________________________________ Section Number ____________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) In the circular flow model, the value of total income for an economy ________ the value of total production. 1) A) is less than B) is greater than C) may be greater than or less than D) equals 2) Prices of California Merlot wine (assume that this is a normal good) have risen steadily in recent years. Over this same period, prices for French oak barrels used for wine storage have dropped and consumer incomes have risen. Which of the following best explains the rising prices of California Merlots? 2) A) The supply curve for Merlot has shifted to the right while the demand curve for Merlot has shifted to the left. B) The supply curve for Merlot has shifted to the right faster than the demand curve has shifted to the right. C) The demand curve for Merlot has shifted to the right faster than the supply curve has shifted to the right. D) The demand curve and the supply curve for Merlot have both shifted to the left. Table 11 Stage of Production Seller Buyer Price (Dollars) 1 Steel Mill Auto Manufacturer $10,000 2 Auto Manufacturer Auto Dealer 18,000 3 Auto Dealer Consumer 25,000 Consider the following table showing three stages of production of an automobile. 3) Refer to Table 11. The value of each automobile in gross domestic product equals 3) A) $15,000. B) $7,000. C) $25,000. D) $18,000. 4) Refer to Table 11. The value added by the automobile dealer equals 4) A) $15,000. B) $7,000. C) $18,000. D) $25,000. 1
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Exam 1 Version A Figure 6 Figure 4 - 9 shows the market for cigarettes. The government plans to impose a unit tax in this market. 5) Refer to Figure 6. For each unit sold, the price sellers receive after the tax (net of tax) is 5) A) $8 B) $12 C) $4.40 D) $3 6) Refer to Figure 6. How much of the tax is paid by buyers? 6) A) $4 B) $8 C) $5 D) $3 7) In Singapore the government places a $5,000 tax on the buyers of new automobiles. After the purchase of a new car, a buyer must pay the government $5,000. How would the imposition of the tax on buyers be illustrated in a graph? 7) A) The tax will shift the demand curve to the right by $5,000. B) The tax will shift the demand curve to the left by $5,000. C) The tax will shift the supply curve to the left by $5,000. D) The tax will shift both the demand and supply curve to the right by $5,000. 8) Assume that the hourly price for the services of personal trainers has risen and sales of these services have also risen. One can conclude that 8) A) the law of demand has been violated. B) personal trainers are deliberately charging high prices because they provide services for
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This note was uploaded on 03/30/2008 for the course 06E 002 taught by Professor Kim during the Spring '08 term at University of Iowa.

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08Spr_MacroExam1_versionA - 06E:002:AAA & BBB Principles of...

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