This preview shows pages 1–3. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: Econ 2012, Section 004, Principles of Economics: Macroeconomics University of Colorado at Denver, Spring 2001 Instructor: Vijaya R. Sharma, Ph.D. Exam 1 Answer all 30 multiple-choice questions in this test. Each question is worth 1 point. 1. Which of the following is the most accurate statement about the production possibilities curve (PPC)? a. An economy can produce at any point inside or outside its PPC. b. An economy can produce only on its PPC. c. An economy can produce at any point on or inside its PPC, but not outside the PPC. d. An economy can produce at any point inside its PPC, but not on or outside the PPC. 2. A PPC will shift outward for all of the following reasons except when a. There is an increase in unemployment of labor. b. There is an increase in population. c. There is an improvement in technology. d. There is an increase in rate of investment. 3. If a country invests and adds to its capital stock with the result that worker productivity rises, a. The production moves from one point on the PPC to another, along the curve. b. The country ends up producing at a point inside the PPC. c. The PPC will shift inward. d. The PPC will shift outward. 4. Which is true of an inferior good ? a. As income increases we purchase more of the good. b. As income increases we purchase less of the good. c. As income increases we could purchase more or less of the good. d. Inferior good is one that has no substitutes. 5. Computers and computer software are complements. As the price of computers decreases, a. the demand for software will decrease. b. the demand for computers will increase. c. demand for computers will decrease. d. the demand for software will increase. 6. As a result of agricultural price supports (price floor), a. the market would be in equilibrium, with quantity demanded equal to quantity supplied. b. There will be a shortage, with quantity demanded exceeding quantity supplied. c. There will be a surplus, with quantity supplied exceeding quantity demanded. d. It is indeterminate as to whether there would be a shortage or surplus. 7. When the demand curve shifts to the right, but supply does not change, a. both the market price and quantity will rise. b. Both the market price and quantity will fall. c. The market price will fall and quantity will rise. d. The market price will rise and quantity will fall....
View Full Document