E304exam1_mc_A_KEY

E304exam1_mc_A_KEY - ECON 304.013 Exam 1 Part 2 Form A KEY...

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ECON 304.013 Exam 1 Part 2 Form A KEY - Exam 1 is worth 100 points and has three sections. The Short Answer/Essay part was worth 30 points, the multiple choice questions below are worth 2 points each for a total of 60 points, and the True/ False questions below are worth 2 points each for a total of 10 points. Directions: The questions below are multiple choice. Circle the answer you have selected on this test packet AND bubble in the corresponding letter on your scan sheet. 1. An adverse oil-price shock reduces labor demand. What happens to current employment and the real wage rate? A) Employment would increase and the real wage would decrease. B) Both employment and the real wage rate would decrease. C) Employment would decrease and the real wage would increase. D) Both employment and the real wage rate would increase. E) Both employment and the real wage rate are unchanged. 2. When a person gets an increase in current income, what is likely to happen to consumption and saving? A) Consumption decreases and saving increases. B) Consumption increases and saving decreases. C) Consumption increases and saving increases. D) Consumption decreases and saving decreases. E) None of the above 3. An adverse supply shock would A) shift the production function down and increase marginal products at every level of employment. B) shift the production function down and decrease marginal products at every level of employment. C) shift the production function up and increase marginal products at every level of employment. D) shift the production function up and decrease marginal products at every level of employment. E) shift the supply of labor curve to the left 4. The income effect of a higher real wage on the quantity of labor supply is the A) tendency of workers to supply less labor in response to becoming wealthier. B) idea that workers feel psychologically wealthier when wages are higher, so they work more. C) effect that income must rise when wages rise. D) tendency of workers to supply more labor in response to becoming wealthier. E) none of the above 5. If C = $500, I = $150, G = $100, NX = $40, and GNP = $800, how much is NFP? A) -$10 B) $10 C) -$5 D) $5 E) none of the above. Page  1  of  7
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ECON 304.013 Exam 1 Part 2 Form A 6. If the government cuts taxes today, issuing debt today and repaying the debt plus interest next year, a rational taxpayer will A) increase consumption today, before taxes go up next year. B) leave a smaller gross bequest to her or his heirs. C) increase saving today, leaving consumption unchanged. D) spend the full amount of the tax cut today and reduce consumption next year. E) none of the above 7. A technological breakthrough in using photons for computers will increase the productivity of those working with computers a hundredfold. You would expect this breakthrough to shift the A) marginal product of labor curve up and to the right, raising the quantity of labor demanded at any given real wage. B) labor supply curve down, raising the quantity of labor demanded at any given real wage.
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E304exam1_mc_A_KEY - ECON 304.013 Exam 1 Part 2 Form A KEY...

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