ECON252_Practice_Exam_1B_02-14-2013_-_BLUE_KEY_

Price 1 2 3 4 5 6 7 8 9 10 11 qs 5 10 15 20 25 30 35

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Unformatted text preview: ges firms to invest more B. A change in the tax laws to encourage Americans to save more C. The government spends more which results in higher budget deficit D. [All of the above] E. [Only A and C] *** [Use the following information to answer questions 6–7.] Consider the following demand and supply schedule for beer. Price($) 1 2 3 4 5 6 7 8 9 10 11 Qs 5 10 15 20 25 30 35 40 45 50 55 Qd 55 50 45 40 35 30 25 20 15 10 5 6. When the price of beer is $9 A. there is a shortage of 50 beers. B. there is a shortage of 30 beers. C. 45 beers will be exchanged. D. there will be downward pressure on the price of beer. *** 7. When the price of beer is $2 A. there will be downward pressure on the price of beer. B. the market is in equilibrium. C. there is a shortage of 40 beers in the market. *** D. there is a surplus of 40 beers in the market. E. there is a shortage of 50 beers in the market. 8. Which of the following are considered investment in the loanable funds model? A. John buys $4,000 of Apple stock B. Rene buys $1,200 of a mutual fund through Fidelity C. Burt borrows $8,000 from the bank to upgrade his firm’s computer system *** D. [All of the above] E. [Only A and B] 9. Diminishing returns to capital helps explain why A. some countries are rich while others are poor. B. human capital tends to flee poor countries. C. productivity is relatively high in the United States. D. poor countries tend to grow faster than rich countries. *** 10. How would sharp decline in the income of American citizens affect the market for Spam? (Spam is a canned, precooked meat product, generally considered an inferior good.) A. Demand decreased for Spam, which resulted in a decrease in equilibrium quantity and decrease in equilibrium price. B. Demand decreased for Spam, which resulted in a decrease in equilibrium quantity and an increase in equilibrium price. C. Supply increased and demand increased for Spam, which resulted in an increase in the equilibrium price. Any change to equilibrium quantity is indeterminate. D. Demand increased for Spam, which resulted in an increase in equilibrium quantity and an increase in equilibrium price. *** [Use the following information to answer questions 11–13.] The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2009. Waffles Pancakes Year Price Quantity Price Quantity 2009 $2.00 120 $2.00 150 2010 $2.00 150 $3.00 200 2011 $4.00 180 $3.00 220 11. Nomina...
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