mt2f3 - ECO 2013-02 Second Midterm, 20 October 2003 Dr....

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ECO 2013-02 Second Midterm, 20 October 2003 Dr. Cobbe Name___________________________________ Bubble in on scantron NAME, SOCIAL SECURITY #, and BEST response to each question. You may write on the questions. This exam consists of 56 questions. In taking this test, I certify that I have complied fully with the FSU Student Academic Honor Code. Signature:__________________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) A new technology is discovered that results in all new cars producing 50 percent less pollution. The technology costs nothing to produce. As a result of the technology, there is a reduction in the number of visits people make to the doctor to complain of breathing difficulties. Which of the following is true? A) GDP will decrease as a result of fewer doctor services being provided. B) GDP is not affected. C) GDP will increase to reflect the improvement in the health of the population. D) GDP will increase to reflect the improvement in the health of the population, and the likely increase in the cost of the car. 2) You hire some of your friends to help you move to a new house and pay them a total of $200 and buy them dinner at Pizza Hut. Which of the following is true? A) The $200 will be counted as part of GDP but not the dinner at Pizza Hut. B) If your friends do not report the $200 on their tax forms, it becomes part of the underground economy. C) The dinner at Pizza Hut should be counted as part of GDP but not the $200. D) Hiring your friends is an illegal activity and should not be counted in GDP. 3) The measurement of GDP handles household production by A) estimating a dollar value of the goods purchased to do housework. B) estimating a dollar value of the services provided. C) ignoring it. D) including it in exactly the same way that all other production is included. 4) If you mow the lawn yourself, the lawn mowing is considered household production. If you pay Larry's Lawn Service to mow your lawn, the lawn mowing is considered A) a leisure time activity. B) a service, that will be counted as part of GDP. C) a value added that can't be counted as part of GDP because the mower is out of school. D) rent, and therefore is counted as part of GDP. 5) If real GDP is greater than nominal GDP then the GDP deflator ____. A) is greater than 100 B) is less than 100 C) is equal to 100 D) We need to choose a new base year. 6) If nominal GDP is $1,000 and the GDP deflator is 250, then real GDP is A) $1,000. B) $400. C) $250. D) impossible to determine with the information given. 1
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7) At the movie theatre, the price of a box of popcorn is $2.25. The movie theatre buys the corn kernels for 25 É , cooking oil for 10 É , butter for 10 É , salt for 2 É , and the box for 3 É . The movie theatre's value added when it produces a box of popcorn is ____. A) $2.25 B) $1.75 C) $2.00 D) $0.50 8) One reason the total sum of all five income categories does not equal GDP exactly is that A) GDP values goods and services at market prices and the income approach values them at factor cost.
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This note was uploaded on 05/22/2011 for the course ECO 2013 taught by Professor Denslow during the Spring '05 term at University of Florida.

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mt2f3 - ECO 2013-02 Second Midterm, 20 October 2003 Dr....

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