Econ102_Exam1_W08 - Form 1 Winter Semester 2008 Economics...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Winter Semester 2008 Form 1 1 Economics 102 – Principles of Economics II Department of Economics – University of Michigan Examination No. 1 – Section 200 Circle the correct answer for each of the following questions . 1. Your form number is A) 1 B) 2 C) 3 D) 4 2. The opportunity cost of a choice is the A) cost associated with making a choice. B) value of the next best activity not chosen. C) fair market price of whatever is chosen. D) amount paid to purchase what is chosen. 3. A higher real interest rate today makes current consumption A) more expensive relative to future consumption because the return on savings is lowered. B) more expensive relative to future consumption because the return on savings is increased. C) less expensive relative to future consumption because the return on savings is increased. D) less expensive relative to future consumption because the return on savings is lowered. 4. Sally has recently graduated from college and has bought a house in 2008 that was built 50 years ago for $100,000. She used a real estate agent to help her find and purchase the house, and the real estate agent received 6 percent of the value of the sale, or $6,000, to be paid by the seller of the house. The value of 2008 GDP in this case would A) increase by $100,000. B) increase by $94,000. C) increase by $106,000. D) increase by $6,000. 5. Which of the following statements is false ? A) In both centrally planned and market economies, the three essential economic questions are what, how, and for whom. B) In a market economy, firms do not interact with consumers. C) The two alternative approaches to the three essential questions are market economies and command economies. D) In a market economy, decisions concerning the three essential questions result from interactions taking place in markets. 6. Two variables are correlated if A) they both move up or down at about the same time. B) an increase in one variable only causes another variable to increase. C) a fall in one variable only causes another variable to fall. D) changes in one have no effect on the other. (OVER)
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Winter Semester 2008 Form 1 2 7. According to the spending allocation model, which of the following statements is correct ? A) Tax cuts and increases in government purchases have the same effect on the economy. B) Tax cuts cause the real interest rate to fall and increases in government purchases cause the interest rate to rise. C)
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 7

Econ102_Exam1_W08 - Form 1 Winter Semester 2008 Economics...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online