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ECON 201:Midterm Reviews
From among the following, the role of an economist is most closely related to
a) making judgments about what people should do.
b) making judgments about how resources should be allocated in an economy.
c) making judgments about how individuals and/or their behaviour will be affected by policy.
|
c) making judgments about how individuals and/or their behaviour will be affected by policy.
|
Who coordinates the needs and desires of the US economy?
a) The Federal Reserve Board.
b) The Federal Government.
c) No single individual or government agency
|
c) No single individual or government agency
|
What is a price?
a) The price of a good represents the total value of the good to consumers.
b) The price of a good represents the marginal value of the good to consumers.
c) The price of a good is the ratio at which that good can be exchanged with another.
d) None of the above.
|
c) The price of a good is the ratio at which that good can be exchanged with another.
|
Fill in the blanks in the following statement: It is __________ to change just one __________.
a) It is difficult to change just one behaviour.
b) It is impossible to change just one price.
c) It is beneficial to change just one price.
d) It is impossible to change just one policy.
|
Fill in the blanks in the following statement: It is __________ to change just one __________.
a) It is difficult to change just one behaviour.
b) It is impossible to change just one price.
c) It is beneficial to change just one price.
d) It is impossible to change just one policy.
b) It is impossible to change just one price.
|
If soda and US dollars exchange at a ratio of 1 bottle to $1.40 and beer and US dollars exchange at a
ratio of 1 bottle to $4.50, what is the price of Beer in terms of soda?
a) The price of beer is 4.50 / 1.40 = bottles of soda.
b) The price of beer is 1.40 / 4.50 = bottles of soda.
c) The price of beer is 4.50 bottles of soda.
d) The price of beer is equal to $1.40 worth of soda.
e) The price of beer cannot be determined without more information.
|
a) The price of beer is 4.50 / 1.40 = bottles of soda.
|
As the price of soda rises from US$1.40 per bottle to US$1.60 per bottle,
a) the price of beer implicitly falls.
b) the price of beer implicitly rises.
c) the price of beer does not change.
|
a) the price of beer implicitly falls.
|
The opportunity cost of reading a single chapter from a textbook
a) has nothing to do with the price you paid for the book.
b) is about 1/13th of the price you paid for the book if there are 13 chapters.
c) is zero, since you have already paid for the book.
|
a) has nothing to do with the price you paid for the book
|
If there were significantly more females than males at a particular college
a) competition would encourage females to pay on dates, on average.
b) competition would encourage males to pay on dates, on average.
c) competition would not encourage either to pay.
d) None of the above.
|
a) competition would encourage females to pay on dates, on average.
|
Many students will state “More students should complete an economics major or minor.” This is
a) a positive statement.
b) a normative statement.
c) neither a positive nor a normative statement.
|
b) a normative statement.
|
A regulation is designed to alter the behaviour of individuals
a) by forcing them to cooperate with the regulation.
b) by suppressing their desire for more, as more is assumed to be better.
c) by creating externalities that are beneficial to society.
d) by using sanctions and rewards to induce individuals to incur the cost of changing their behavior.
e) None of the above.
|
d) by using sanctions and rewards to induce individuals to incur the cost of changing their behavior.
|
What seems to have happened when Ohio toughened their DWI policy?
a) People in Ohio were less inclined to drink and drive.
b) The number of bribable accidents reported as alcohol related increased.
c) Alcohol-related hit and runs decreased.
d) None of these were seen in the data.
|
a) People in Ohio were less inclined to drink and drive.
|
Fill in the blank in the following statement: Due to __________, people must make choices about
what and when to consume.
a) Due to limited supply people must make choices about what and when to consume.
b) Due to boundless desires people must make choices about what and when to consume.
c) Due to scarcity people must make choices about what and when to consume.
|
c) Due to scarcity people must make choices about what and when to consume.
|
Opportunity costs can be defined as
a) the value of goods purchased.
b) the price one would have paid for the next-best alternative forgone.
c) the value of the next-best alternative forgone.
|
c) the value of the next-best alternative forgone.
|
When someone is willing to pay more for something just because it saves time, we would predict that
a) the time saved, when used in the next-best alternative, is relatively more valuable to him.
b) the time saved, when used in the next-best alternative, is relatively less valuable to him.
c) More information is needed to answer this question.
|
a) the time saved, when used in the next-best alternative, is relatively more valuable to him.
|
The law of demand states that
a) more of a good will be demanded the higher is the price, other things constant.
b) more of a good will be demanded the lower is the price, other things constant.
c) people always want more.
d) you can’t always get what you want at the price you want to pay.
|
b) more of a good will be demanded the lower is the price, other things constant.
|
An equilibrium price in a market is
a) the price that all consumers are willing and able to pay.
b) the price at which there is no excess supply or demand.
c) the price at which people are “happy” consuming the equilibrium quantity.
d) Both b and c.
|
b) the price at which there is no excess supply or demand.
|
Demand curves are generally
a) upward sloping – as price rises, quantity demanded falls.
b) upward sloping – as quality rises, quantity demanded falls.
c) downward sloping – as price falls, quantity demanded falls.
d) downward sloping – as quality rises, quantity demanded falls.
e) downward sloping – as price rises, quantity demanded falls.
|
e) downward sloping – as price rises, quantity demanded falls.
|
At an equilibrium price and quantity,
a) there is upward pressure on price, otherwise price would be falling.
b) there is downward pressure on price.
c) there is upward pressure on quantity.
d) there is no pressure for quantity to change.
e) None of the above.
|
d) there is no pressure for quantity to change.
|
Where there is currently a shortage in a market
a) one should expect prices to fall.
b) one should expect prices to rise.
|
b) one should expect prices to rise.
|
Where there is currently a surplus in a market
a) one should expect prices to fall.
b) one should expect prices to rise.
|
a) one should expect prices to fall.
|
Where there is currently a shortage in a market
a) one should expect the quantity demanded to fall.
b) one should expect the quantity supplied to fall.
|
a) one should expect the quantity demanded to fall.
|
Where there is currently a surplus in a market
a) one should expect the quantity demanded to fall.
b) one should expect the quantity supplied to fall.
|
b) one should expect the quantity supplied to fall.
|
Which of the following is not included among the four behavioural postulates discussed in class?
a) People have preferences.
b) More is preferred to less.
c) Preferences, however defined, do not change over the period of analysis.
d) People are willing to substitute.
e) Marginal values are decreasing.
|
c) Preferences, however defined, do not change over the period of analysis.
|
The value of a good is measured by
a) the price one is observed paying in order to acquire the good.
b) the cost to firms of producing the good.
c) what one is willing to give up in order to acquire the good.
d) None of the above.
|
c) what one is willing to give up in order to acquire the good.
|
Why is the demand curve negatively sloped?
a) Because rational people prefer more over less.
b) Because prices have to rise if people are not going to purchase as many units.
c) Because sellers' marginal values are increasing.
d) Because consumers' marginal values are decreasing.
|
d) Because consumers' marginal values are decreasing
|
One learns that individuals value the Eugene Police department at roughly $230 million. One also
learns that individuals value the Eugene public schools at $340 million. From this information, one
can confidently conclude that
a) new teachers will be paid more than new police officers.
b) new police officers will be paid more than new teachers.
c) None of the above.
|
c) None of the above.
|
Fill in the blanks in the following: Every __________ has a __________ associated with it.
a) Every choice has a benefit associated with it.
b) Every human action has a cost associated with it.
c) Every price has a demand associated with it.
|
b) Every human action has a cost associated with it.
|
Given the items below and their associated annual expenses, what is the cost of going to college for
one year? (As an alternative to college you can only hold one job. Specifically, one cannot work for
both Firm 1 and Firm 2.)
Tuition $ 7,000
Books $ 600
Living Expenses if at College $ 4,000
Living Expenses if not at College $ 6,000
Job with Firm 1 $30,000
Job with Firm 2 $38,000
a) $11,600
b) $37,600
c) $35,600
d) $43,600
e) $73,600
|
d) $43,600
|
According to the optimal purchase rule, a consumer will continue purchasing additional units of a
good until
a) she runs out of money.
b) the marginal value of the next unit becomes less than the price.
c) the total value of the units purchased becomes greater than the price.
d) the marginal value of the next unit becomes negative.
e) the total value of the units purchased becomes equal to the price.
|
b) the marginal value of the next unit becomes less than the price.
|
Can we measure tastes or preferences?
a) Not typically.
b) Yes.
|
a) Not typically.
|
The law of diminishing marginal value states that
a) the total value of consumption increases as more of a good is consumed.
b) the marginal value of consumption decreases as more of a good is consumed.
c) people purchase goods as long as the marginal value exceeds the price.
d) All of the above.
|
b) the marginal value of consumption decreases as more of a good is consumed.
|
“The Democratic Party should change their policy now that they have lost a Massachusetts senate
seat,” is a
a) positive statement
b) normative statement
|
b) normative statement
|
“In 2008, Giuliani did not campaign in as many states as other Republican candidates did,” is a
a) positive statement
b) normative statement
|
a) positive statement
|
Which of the following is most supportive of the claim that American orchestras have discriminated
against women?
a) Women account for less than 50 percent of orchestra musicians.
b) There are no women musicians in American orchestras.
c) When blind auditions were introduced, women were 50 percent more likely to make it past
the first round of auditions.
d) While 20 percent of applications are from female musicians, 40 percent of hired musicians are
female.
|
c) When blind auditions were introduced, women were 50 percent more likely to make it past
the first round of auditions.
|
How is the diamond-water paradox resolved?
a) People are greedy.
b) Prices are determined by marginal values and water’s marginal value is lower.
c) The total value of diamonds exceeds that of water so people are willing to pay more for a
diamond.
d) None of the above.
|
b) Prices are determined by marginal values and water’s marginal value is lower.
|
What policy would you suggest be considered when fines for not wearing one’s seatbelt are
increased?
a) Raising the speed limit.
b) Decrease the number of police patrol officers on the highways.
c) Increase fines associated with speeding.
d) None of these options are likely to change drivers’ incentives in a beneficial way.
|
c) Increase fines associated with speeding.
|
Scarcity
a) is defined as not having enough of everything.
b) is defined as not having enough of the desirable.
c) None of the above.
|
Scarcity
a) is defined as not having enough of everything.
b) is defined as not having enough of the desirable.
c) None of the above.
|
The supply curve is
a) upward sloping.
b) downward sloping.
|
a) upward sloping.
|
The demand curve is generally
a) upward sloping.
b) downward sloping.
|
b) downward sloping.
|
Are market equilibria, as described in class, attractive?
a) Yes.
b) No.
|
a) Yes
|
What is the strongest statement that we will make in favour of any theory?
a) The theory predicts behavior very poorly.
b) The evidence fails to disprove the theory.
c) The theory is correct.
d) The theory tested is the right theory.
|
b) The evidence fails to disprove the theory.
|
The three central coordination problems of any economy include all of the following except
a) What should we produce?
b) How should production take place?
c) Why should we produce?
d) For whom should we produce?
|
c) Why should we produce?
|
Are market equilibria, as described in class, stable?
a) Yes.
b) No.
|
a) Yes.
|
From among the following, the role of an economist is most closely related to
a) making judgments about what people should do.
b) making judgments about how resources should be allocated in an economy.
c) making judgments about how individuals and/or their behaviour will be affected by policy.
|
c) making judgments about how individuals and/or their behaviour will be affected by policy.
|
Who coordinates the needs and desires of the US economy?
a) The Federal Reserve Board.
b) The Federal Government.
c) No single individual or government agency.
|
c) No single individual or government agency.
|
What is a price?
a) The price of a good represents the total value of the good to consumers.
b) The price of a good represents the marginal value of the good to consumers.
c) The price of a good is the ratio at which that good can be exchanged with another.
d) None of the above.
|
c) The price of a good is the ratio at which that good can be exchanged with another.
|
Fill in the blanks in the following statement: It is __________ to change just one __________.
a) It is difficult to change just one behaviour.
b) It is impossible to change just one price.
c) It is beneficial to change just one price.
d) It is impossible to change just one policy.
|
b) It is impossible to change just one price.
|
If soda and US dollars exchange at a ratio of 1 bottle to $1.40 and beer and US dollars exchange at a
ratio of 1 bottle to $4.50, what is the price of Beer in terms of soda?
a) The price of beer is 4.50 / 1.40 = bottles of soda.
b) The price of beer is 1.40 / 4.50 = bottles of soda.
c) The price of beer is 4.50 bottles of soda.
d) The price of beer is equal to $1.40 worth of soda.
e) The price of beer cannot be determined without more information.
|
a) The price of beer is 4.50 / 1.40 = bottles of soda.
|
As the price of soda rises from US$1.40 per bottle to US$1.60 per bottle,
a) the price of beer implicitly falls.
b) the price of beer implicitly rises.
c) the price of beer does not change.
|
a) the price of beer implicitly falls.
|
The opportunity cost of reading a single chapter from a textbook
a) has nothing to do with the price you paid for the book.
b) is about 1/13th of the price you paid for the book if there are 13 chapters.
c) is zero, since you have already paid for the book.
|
a) has nothing to do with the price you paid for the book.
|
If there were significantly more females than males at a particular college
a) competition would encourage females to pay on dates, on average.
b) competition would encourage males to pay on dates, on average.
c) competition would not encourage either to pay.
d) None of the above.
|
a) competition would encourage females to pay on dates, on average.
|
Many students will state “More students should complete an economics major or minor.” This is
a) a positive statement.
b) a normative statement.
c) neither a positive nor a normative statement.
|
b) a normative statement.
|
A regulation is designed to alter the behaviour of individuals
a) by forcing them to cooperate with the regulation.
b) by suppressing their desire for more, as more is assumed to be better.
c) by creating externalities that are beneficial to society.
d) by using sanctions and rewards to induce individuals to incur the cost of changing their
behaviour.
e) None of the above.
|
d) by using sanctions and rewards to induce individuals to incur the cost of changing their
behaviour.
|
What seems to have happened when Ohio toughened their DWI policy?
a) People in Ohio were less inclined to drink and drive.
b) The number of bribable accidents reported as alcohol related increased.
c) Alcohol-related hit and runs decreased.
d) None of these were seen in the data.
|
a) People in Ohio were less inclined to drink and drive.
|
Fill in the blank in the following statement: Due to __________, people must make choices about
what and when to consume.
a) Due to limited supply people must make choices about what and when to consume.
b) Due to boundless desires people must make choices about what and when to consume.
c) Due to scarcity people must make choices about what and when to consume.
|
c) Due to scarcity people must make choices about what and when to consume.
|
Opportunity costs can be defined as
a) the value of goods purchased.
b) the price one would have paid for the next-best alternative forgone.
c) the value of the next-best alternative forgone.
|
c) the value of the next-best alternative forgone.
|
When someone is willing to pay more for something just because it saves time, we would predict that
a) the time saved, when used in the next-best alternative, is relatively more valuable to him.
b) the time saved, when used in the next-best alternative, is relatively less valuable to him.
c) More information is needed to answer this question.
|
a) the time saved, when used in the next-best alternative, is relatively more valuable to him.
|
The law of demand states that
a) more of a good will be demanded the higher is the price, other things constant.
b) more of a good will be demanded the lower is the price, other things constant.
c) people always want more.
d) you can’t always get what you want at the price you want to pay.
|
b) more of a good will be demanded the lower is the price, other things constant.
|
An equilibrium price in a market is
a) the price that all consumers are willing and able to pay.
b) the price at which there is no excess supply or demand.
c) the price at which people are “happy” consuming the equilibrium quantity.
d) Both b and c.
|
b) the price at which there is no excess supply or demand.
|
Demand curves are generally
a) upward sloping – as price rises, quantity demanded falls.
b) upward sloping – as quality rises, quantity demanded falls.
c) downward sloping – as price falls, quantity demanded falls.
d) downward sloping – as quality rises, quantity demanded falls.
e) downward sloping – as price rises, quantity demanded falls.
|
e) downward sloping – as price rises, quantity demanded falls.
|
At an equilibrium price and quantity,
a) there is upward pressure on price, otherwise price would be falling.
b) there is downward pressure on price.
c) there is upward pressure on quantity.
d) there is no pressure for quantity to change.
e) None of the above.
|
d) there is no pressure for quantity to change.
|
Where there is currently a shortage in a market
a) one should expect prices to fall.
b) one should expect prices to rise.
|
b) one should expect prices to rise.
|
Where there is currently a surplus in a market
a) one should expect prices to fall.
b) one should expect prices to rise.
|
a) one should expect prices to fall.
|
Where there is currently a shortage in a market
a) one should expect the quantity demanded to fall.
b) one should expect the quantity supplied to fall.
|
a) one should expect the quantity demanded to fall.
|
Where there is currently a surplus in a market
a) one should expect the quantity demanded to fall.
b) one should expect the quantity supplied to fall.
|
b) one should expect the quantity supplied to fall.
|
Which of the following is not included among the four behavioural postulates discussed in class?
a) People have preferences.
b) More is preferred to less.
c) Preferences, however defined, do not change over the period of analysis.
d) People are willing to substitute.
e) Marginal values are decreasing.
|
c) Preferences, however defined, do not change over the period of analysis.
|
The value of a good is measured by
a) the price one is observed paying in order to acquire the good.
b) the cost to firms of producing the good.
c) what one is willing to give up in order to acquire the good.
d) None of the above.
|
c) what one is willing to give up in order to acquire the good.
|
Why is the demand curve negatively sloped?
a) Because rational people prefer more over less.
b) Because prices have to rise if people are not going to purchase as many units.
c) Because sellers' marginal values are increasing.
d) Because consumers' marginal values are decreasing.
|
d) Because consumers' marginal values are decreasing.
|
One learns that individuals value the Eugene Police department at roughly $230 million. One also
learns that individuals value the Eugene public schools at $340 million. From this information, one
can confidently conclude that
a) new teachers will be paid more than new police officers.
b) new police officers will be paid more than new teachers.
c) None of the above.
|
c) None of the above.
|
Fill in the blanks in the following: Every __________ has a __________ associated with it.
a) Every choice has a benefit associated with it.
b) Every human action has a cost associated with it.
c) Every price has a demand associated with it.
|
b) Every human action has a cost associated with it.
|
According to the optimal purchase rule, a consumer will continue purchasing additional units of a
good until
a) she runs out of money.
b) the marginal value of the next unit becomes less than the price.
c) the total value of the units purchased becomes greater than the price.
d) the marginal value of the next unit becomes negative.
e) the total value of the units purchased becomes equal to the price.
|
b) the marginal value of the next unit becomes less than the price.
|
“The Democratic Party should change their policy now that they have lost a Massachusetts senate
seat,” is a
a) positive statement
b) normative statement
|
b) normative statement
|
“In 2008, Giuliani did not campaign in as many states as other Republican candidates did,” is a
a) positive statement
b) normative statement
|
a) positive statement
|
Which of the following is most supportive of the claim that American orchestras have discriminated
against women?
a) Women account for less than 50 percent of orchestra musicians.
b) There are no women musicians in American orchestras.
c) When blind auditions were introduced, women were 50 percent more likely to make it past
the first round of auditions.
d) While 20 percent of applications are from female musicians, 40 percent of hired musicians are
female.
|
c) When blind auditions were introduced, women were 50 percent more likely to make it past the first round of auditions.
|
How is the diamond-water paradox resolved?
a) People are greedy.
b) Prices are determined by marginal values and water’s marginal value is lower.
c) The total value of diamonds exceeds that of water so people are willing to pay more for a diamond.
d) None of the above.
|
b) Prices are determined by marginal values and water’s marginal value is lower.
|
What policy would you suggest be considered when fines for not wearing one’s seatbelt are
increased?
a) Raising the speed limit.
b) Decrease the number of police patrol officers on the highways.
c) Increase fines associated with speeding.
d) None of these options are likely to change drivers’ incentives in a beneficial way.
|
c) Increase fines associated with speeding
|
Scarcity
a) is defined as not having enough of everything.
b) is defined as not having enough of the desirable.
c) None of the above.
|
b) is defined as not having enough of the desirable
|
What is the strongest statement that we will make in favour of any theory?
a) The theory predicts behavior very poorly.
b) The evidence fails to disprove the theory.
c) The theory is correct.
d) The theory tested is the right theory.
|
b) The evidence fails to disprove the theory.
|