University Of Arizona - ECON 200Final Exam Practice Questions and Answers reviewed

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1c. A basic difference between microeconomics and macroeconomics is: 2c. The distinction between positive and normative economics is that: 3c. Which of the following is a normative ... statement? 6a. Which of the following sums up the circular flow of economic activity? 7c. Suppose you have the opportunity to work in the concession stand at a football game for two hours, at $5 an hour. You decide instead to go to a concert whose ticket costs $12. Which of the following is closest to your opportunity costs for going to the concert? 8a. Dylan can peel 30 potatoes or slice 25 onions in an hour. Omar can peel 15 potatoes or slice 20 onions in an hour. Which of the following statements is true? 9d. If the price of computers increases from $1,000 to 1,500, what will happen to the computer market? 10b. In an effort to support family orange growing businesses, the government sets a maximum price of $6 for a gallon of orange juice. The current market price for orange juice is $7 for a gallon. The government’s action will have what effect on the orange juice market? 11d. Producer surplus is the 12e. An improvement in the technology used in the production of automobiles and a decrease in the input costs of production will most likely cause the price and quantity of automobiles to change in which of the following ways? 13c. A decrease in the price of silicon chips (used in computers) and a decrease in tariffs for a computer parts will affect the domestic computer price and quantity in which of the 14e. All of the following might reasonably be expected to shift the demand curve for beef to a new position except 15c. Changes in demand are caused by: 16a. In an effort to support family orange growing business, the government sets a minimum price of $6 for a gallon of orange juice. The current market price for orange juice is $5 for a gallon. The government‘s actions will have what effect on the orange juice market? 17d. A firm increases the price of its product and finds that its total revenue increases. Which of the following best describes why this happened? 18d. If a firm faces a relatively inelastic demand for its product and the price of the product drops, the firm can expect that 19b. Using the above graph, if the market for frankfurters is left unregulated, the market 20d. If the government were to establish an effective price ceiling as indicated in the graph, the market price and quantity sold would be: 21e. If the government were to establish an effective price ceiling as indicated in the graph, the result would be a 22e. If there were no government interference in this market, and the market equilibrium price and quantity were to prevail, the consumer surplus would be the area 23d. If there were no government interference in this market and the market equilibrium price and quantity were to prevail, the producer surplus would be the area 24d. If the price of lunch at a school cafeteria increases and the cafeteria’s revenue increases, the elasticity of demand for a school lunch must be 25c. Assuming that good A and good B currently sell at the same price. Good A is more elastic than good B. Both goods A and B experience a 10% increase in price, then: 26a. In the long run, a perfectly competitive firm will achieve all BUT which of the following: 27e. On the graph above, what is the area of total revenue at the profit-maximizing price? 28c. On the graph above, what is the area of total cost at the profit-maximizing quantity? 29c. The area of deadweight loss or welfare loss to society at the profit-maximizing price and quantity is: 30. The monopoly maximizes total revenue at quantity: 31c. Frictional unemployment is 33b. Investment spurs growth of potential output because it increases 34a. Technological improvement causes 35e. Which one of the following will NOT cause a shift in aggregated demand? 36c. Suppose that the government increases spending by $100 billion. If everything else stays constant and the marginal propensity to consume is 0.8, the value of equilibrium output increases by 37a. If the economy is currently on the intermediate section of the SRAS curve, when aggregate demand increases, 38c. An expansionary fiscal policy would be the one that 39e. Aggregate demand reflects the willingness and capability of which of the following to purchase a quantity of goods and services at any price level? 40d. An increase in the price level will 41a. If $100 billion were added to an economy through government spending and the marginal propensity to save is 25, what would be the maximum increase in output in the economy? 42c. Which of the following is the best example of the free-rider effect? 43e. If firms entering an industry that is monopolistically competitive, we would expect 44c. To decrease the money supply, the FED can 45a. In the short run, combining an expansionary fiscal policy with a tight money policy is most likely to cause 46a. Which of the following actions by the FED will result in an increase in banks’ excess reserves? 47c. In the short run, how will an increase in aggregate demand most likely affect the overall price level and real GDP? 48b. Which of the following actions by the Federal Reserve would have similar effects on the size of the U.S. money supply? 49b. When inflation rises quickly: 50d. Use this information to answer the next question. All numbers are in millions. What is the unemployment rate for the nation? [Show More]

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