ECO2013 Clicker Questions Question 2 1 When private ownership of a resource is clearly defined and enforced the private owner has a strong incentive to use the resource wisely and to consider seriously Question 2 2 In the fictitious country of Lebos the government allows private ownership of pigs but not of cows If the demand for pork and the demand for beef both permanently increased in Lebos in the long run we would expect the population of pigs to rise and the population of cows to fall Question 2 3 Opportunity costs differ among nations primarily because nations have different endowments of land labor skills capital and technology Question 2 4 When voluntary trade occurs which statement is most accurate Both people gain some value Question 3 2 In economics the demand for a good refers to the amount of the good people are willing to buy at various prices Question 3 3 When economist say the quantity demanded of a product has increased they mean the price of the product has fallen and consequently consumers are buying more Question 3 4 When economists say the demand for a product has decreased they mean the demand curve has shifted to the left Question 3 5 According to the law of supply more of a good will be offered by suppliers as the price rises Question 3 6 Ceteris paribus an increase in the price of a good will cause the quantity supplied of the good to increase Question 3 7 When economists say the supply of a product has increased they mean the supply curve has shifted to the right Question 3 8 MA Which of the following statements are true With a shortage quantity demanded exceeds quantity supplied and price will be pushed up With a surplus quantity supplied exceeds quantity demanded and price will be pushed down Question 3 9 If there is a decrease in demand for laptop computers we would expect both the price and quantity sold to decrease Question 3 10 Which of the following would reduce the price of DVD players and increase the quantity sold An increase in the supply of DVD players Question 3 11 PMA If there is a simultaneously an increase in demand and an increase in supply we would expect an increase in equilibrium price and an increase in equilibrium quantity a decrease in equilibrium price and an increase in equilibrium quantity Q3 12 Adam Smith s invisible hand principle stresses the tendency of the competitive market process to direct self interested individuals into activities that enhance the economic welfare of society Question 7 1 A business produced 10 million of goods in 2005 but sold only 9 million Is the 1 million increase in inventory counted as part of the 2005 gross domestic product Yes because these inventories are part of the output of the economy in 2005 Question 7 2 George lived in a home that was newly constructed in 2005 In 2005 he paid 200 000 for the brand new house He sold the house in 2006 for 225 000 Which of the following statements is correct regarding the sale of the house The 2006 sale affected neither 2005 GDP nor 2006 GDP Question 7 3 Y C I G X Which of the four is the largest component of GDP Consumption Question 7 4 If a used car dealer purchases a used car for 3 000 refurbishes it and sells it for 8 000 the dealer contributes value added equal to 5 000 and consequently 5 000 is added to GDP Question 7 5 PMA An American owned McDonald s opens in Russia How would the net revenue earned by this restaurant affect the GDP and GNP of the United States GNP would rise GDP would remain unchanged Question 7 6 Gasoline prices are lower right now than they were in 1980 True False TRICK QUESTION Question 7 7 If the GDP deflator in 2006 was 130 compared to a value of 100 during the 1996 base year this would indicate that the general level of prices during 2006 was 30 higher than during 1996 Question 8 1 A person not working is considered unemployed False Question 8 2 Mary is a homemaker Last week she was busy with her normal household chores She is not a member of the labor force Question 8 3 Which of the following would be officially classified as unemployed A laid off construction worker waiting to return to a previous job Question 8 4 How would you classify Stewie Not in labor force under 16 Question 8 5 How would you classify Spicoli Not in labor force not seeking job Question 8 6 How would you classify Harry and Lloyd Frictional structural Question 8 7 Which of the following is a positive effect of job search and the unemployment that often accompanies it It permits individuals to better match their skills and preferences with the requirements of a job Question 8 8 Full employment is the situation in which the economy operates at an unemployment rate equal to the sum of structural and frictional unemployment Question 8 9 Actual GDP will be below potential GDP during a recession Question 8 10 Suppose you received a 3 increase in your nominal wage Over the year inflation ran about 6 Which of the following is true Your real wage fell Question 9 1 For an economy aggregate demand equals consumption investment government purchases exports minus imports Question 9 2 In the context of aggregate supply the short run is defined as the period during which some prices are set by contracts and cannot be adjusted Question 9 3 In the context of aggregate supply the long run is defined as the period during which individuals have sufficient time to modify their behavior in response to price change Question 9 4 9 5 MA Which of the following statements are true At point 1 actual GDP is less than potential GDP At point 1 actual unemployment is greater than the natural rate of unemployment At point 3 actual GDP is greater than potential GDP At point 3 actual unemployment is less than the natural rate of unemployment Question 9 6 Other things constant an increase in resource prices will increase the cost of producing goods and services which will lead to a higher price level Question 9 7 Which of the following is the most accurate statement about real and nominal interest rates Real interest rates can be either positive or negative but nominal interest rates must be positive Question 9 8 MA If the dollar price of the English pound goes from 1 75 to 1 50 then the dollar has appreciated against the pound the pound has depreciated against the dollar Question 9 9 MA If the dollar price of the English pound goes from 1 75 to 2 00 then Americans will find English goods more expensive the English will find American goods cheaper Question 10 1 MA If Asian economies suffer
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