mt1p03-1 - 1 If the number of people unemployed is 100 the...

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1) If the number of people unemployed is 100, the number of people employed is 1000, and the working- age population is 1400, then the labor force is A) 1000. B) 1100. C) 1400. D) 1500. 2) The ABC Music club charges a price of $16 for a CD and $8 for a cassette. Both CDs and cassettes are normal goods. If the ABC Music club increases the price of a CD to $18, everything else remaining the same, A) the substitution effect induces club members to buy more cassettes and fewer CDs. B) the income effect induces club members to buy fewer CDs. C) the substitution effect induces club members to buy more CDs and fewer cassettes. D) Both answers A and B are correct. 3) If the U.S. Surgeon General announced that increased grapefruit juice consumption could cause lower cholesterol levels, what would happen to the equilibrium price and quantity of grapefruit juice? A) Price and quantity both increase. B) Price and quantity both decrease. C) Price increases but quantity decreases. D) Price decreases but quantity increases. 4) What are the four categories into which resources (factors of production) are grouped? 5) During a recession, all of the following are likely to occur EXCEPT 6) Joy is training to become a chef. The skills she is obtaining from her training and education will increase what type of resource (factors of production)? A) land B) physical capital C) entrepreneurship D) human capital Component Amount (dollars) Net taxes Personal Consumption expenditure Depreciation Government purchases Gross Investment Net exports Compensation of employees 10 50 8 20 26 -10 65 7) Using the information in the table above, calculate the government's budget deficit or surplus. A) $2 B) -$4 C) -$10 D) $4
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8) Consider the PPF for milk and corn in the above figure. If currently no corn is being produced, what is the total opportunity cost of producing 2 bushels of corn? A) 2 bushels of corn B) 4 gallons of milk C) 1 gallon of milk D) nothing 9) Which of the following will create an incentive to increase the amount of an activity? 10) If the Consumer Price Index in 2001 was 110 and was 115 in 2002, the inflation rate for 2002 was approximately A) 4.5 percent. B) 5.0 percent.
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