Econ 110 - Econ 110 P. J. Gormely Exam 1 Spring 2007...

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Econ 110 Principles of Macroeconomics P. J. Gormely Exam 1 Spring 2007 Version 1 KSU Honor System. A component vital to the Honor System is the inclusion of the Honor Pledge which applies to all assignments, examinations, or other course work undertaken by students. The Honor Pledge is implied, whether or not it is stated: "On my honor, as a student, I have neither given nor received unauthorized aid on this academic work." 1. The problem of determining what goods and services society should produce: A. exists because we can produce more than we need or want. B. exists because there are not enough resources to provide all the goods and services that people want to purchase. C. would not exist if all goods and services were scarce. D. would not exist if government owned all of the resources. 2. The basic difference between microeconomics and macroeconomics is: A. microeconomics focuses on the choices of individual consumers, while macroeconomics considers the behavior of businesses. B. microeconomics focuses on financial reporting by individual firms, while macroeconomics focuses on broader market statistics. C. microeconomics examines the choices made by individual participants in an economy, while macroeconomics considers the economy's overall performance. D. microeconomics focuses on one country’s markets, while macroeconomics concentrates primarily on international trade. 3. For an economist, the cost of something is: A. the amount of money you paid for it. B. what you gave up to get it. C. always equal to its market value. D. the quantity of resources used to produce it. 4. If every individual was required to be self-sufficient: A. living standards would fall. B. living standards for some individuals would fall but, for others, they would rise. C. living standards would rise. D. it's impossible to say how living standards would change. 5. "Market failure" may occur because: A. individual actions have side effects that are not properly taken into account by the market. B. one party prevents mutually beneficial trades from occurring in the attempt to capture a greater share of resources for itself. C. some goods, by the very nature, are unsuited for efficient management by markets. D. of all of the above.
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6. A friend comes up to you and offers to give you a free ticket to the local professional team's baseball game that night. You decide to attend the game. It takes five hours to go to the game and costs you $15 for transportation. If you had not attended the game, you would have worked at your part-time job for $8 an hour. What is the cost of you attending the game? A. zero-The ticket is free. B. $65 C. $40 D. $55 7. When the United States and Mexico trade: A. the United States will be worse off because wages in Mexico are so low. B.
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Econ 110 - Econ 110 P. J. Gormely Exam 1 Spring 2007...

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