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Unformatted text preview: Econ 252 Quiz 1 1. Market economies are distinguished from other types of economies largely on the basis of a. the political affiliations of government officials. b. the process by which government officials are elected or appointed. c. the ways in which scarce resources are allocated. d. the number of retail outlets available to consumers. Figure 1 2. Refer to Figure 1 . Ashley regularly buys foodstuff at a grocery store. Michael regularly pays a insurance company to insure his car. If the flow of food products from the grocery store to Ashley is represented by an arrow from Box C to Box B of this circular-flow diagram, then the money paid by Michael to the insurance company is represented by an arrow a. from Box A to Box D. b. from Box B to Box C. c. from Box C to Box B. d. from Box D to Box A. 3. Because every transaction has a buyer and a seller, a. GDP is more closely associated with an economys income than it is with an economys expenditure. b. every transaction contributes equally to an economys income and to its expenditure. c. the number of firms must be equal to the number of households in a simple circular- flow diagram. d. firms profits are necessarily zero in a simple circular-flow diagram. 4. A good is produced by a firm in 2007, added to the firms inventory in 2007, and sold to a household in 2008 adding to the consumption in 2008. As a result, on net, a. 2007 GDP increased and 2008 GDP decreased. b. 2007 GDP decreased and 2008 GDP increased. c. 2007 GDP did not change and 2008 GDP increased. d. 2007 GDP increased and 2008 GDP did not change. 5. In the economy of Halla in 2008, consumption was $3000, GDP was $5500, government purchases were $1000, imports were $2000, and investment was $1000. What was Hallas exports in 2008?...
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- Spring '08