Week 1 Exam

Marginal Analysis is best described as

• Comparing the total costs to the total revenues

• Analyzing the additional benefits and costs of one more unit of activity

• Seeing the impact of a change in an output level on profits

• Average cost per unit of a source

• None of the above

What is likely to happen if there is an improvement in production technology for a good?

• The supply curve shifts to the left

• The supply curve shifts to the right

• The demand curve shifts to the right

• The demand curve shifts to the left

• None of the above

An unattainable point on a production possibilities curve can be illustrated by

• A shift in the production possibilities curve inward

• Any point on the left side of the graph

• A point on the outside of the production possibility curve

• Any point on the production possibilities curve

• None of the above

The economic problem that every country, person and entity faces is

• Tax changes that lead to a worse economy

• That there are a limited number of resources and unlimited human wants

• Any government that obtains too much power

• The level of unemployment for the poor

• None of the above

All of the following are included in computing the opportunity cost of attending college EXCEPT

• Interest paid on student loans

• Wages the student gave up to attend college

• Money spent on college tuition

• Money spent on food

• None of the above

Which of the following economists is considered the founder of modern day macroeconomic policy?

• Adam Smith

• David Ricardo

• Milton Friedman

• John Keynes

• None of the above

1. Which type of economic system would Adam Smith and Milton Friedman support if they could choose any system?

• Command

• Mixed

• Market

• Traditional

• None of the above

Which of the following statements about a price ceiling is accurate?

• An effective price ceiling must be priced above the equilibrium price

• An effective price ceiling must be priced below the equilibrium price

• A price ceiling will increase the quantity of the good supplied

• A price ceiling will cause a shift in the demand curve for the good

• None of the above

Which of the following would be considered human capital in the production of computers?

• Knowledge to build and put together computers

• The computers themselves

• Workers that put together the materials

• Trucks that drive the computers to the store

• None of the above

Why does scarcity exist?

• Each year workers tend to produce less than in previous years.

• Machines wear out with time.

• There is a limit to people’s wants

• The washing machine eats socks causing people to continually buy socks

• None of the above