Economics Exam 1 Review and Study Guide Tips
Prepare for your economics exam with this comprehensive review covering market failures, comparative advantage, international trade, and more. Study tips and practice suggestions are provided to help you succeed on Exam 1.
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Presentation Transcript
Exam 1 Review This web quiz may appear as two pages on tablets and laptops. I recommend that you view it as one page by clicking on the open book icon at the bottom of the page.
Exam 1 Review Exam 1 covers: 5Es Chapter 1 Chapter 2 Chapter 3 Chapter 20 Be sure to see the exact textbook pages listed on our LESSONS page.
Exam 1 Review Major topics : Market Failures S, D, and efficiency Comparative Advantage and the Benefits of trade International Trade Exchange Rates 5Es PPC Market and Command Economies Role of Government Government Finance Be sure to see the Must Know/Outcomes listed on our LESSONS page.
Exam 1 Review Study Ideas: Learn the vocabulary see the list of concepts at the end of each chapter Define each graph know what a point on the graph means (Define, Draw, Describe) S and D determinants know how they shift the curves Comparative Advantage International trade Exchange Rates (know the determinants)
Exam 1 Review Study Ideas DO PROBLEMS: Do the Yellow Page problems Do the Required Activities Do Study Guide problems Do the Clicker Quizzes, Pre-quizzes, and Practice Exercises, (see Blackboard) Be sure to see the Must Know/Outcomes listed on our LESSONS page.
Exam 1 Review Study Ideas: Do you understand each of the Must Know/Outcomes listed on our LESSONS page?
1. Which of the following explains why it is good if the price of plywood increases after a hurricane? 1. Economic Growth 2. Allocative Efficiency 3. Productive Efficiency 4. Equity 5. Full employment
1. Which of the following explains why it is good if the price of plywood increases after a hurricane? 1. Economic Growth 2. Allocative Efficiency 3. Productive Efficiency 4. Equity 5. Full employment
2. Which of the following explains why it is good when Coke-Cola laid off 6000 employees but produced the same quantity? 1. Economic Growth 2. Allocative Efficiency 3. Productive Efficiency 4. Equity 5. Full employment
2. Which of the following explains why it is good when Coke-Cola laid off 6000 employees but produced the same quantity? 1. Economic Growth 2. Allocative Efficiency 3. Productive Efficiency 4. Equity 5. Full employment
3. You win a summer trip to Europe, all expenses paid, but you cannot afford to go, why? 1. You cannot afford to buy the airline ticket 2. You cannot afford the opportunity cost 3. You would rather go to South America 4. You would rather go in the winter when you can ski.
3. You win a summer trip to Europe, all expenses paid, but you cannot afford to go, why? 1. You cannot afford to buy the airline ticket 2. You cannot afford the opportunity cost 3. You would rather go to South America 4. You would rather go in the winter when you can ski.
4. Which of the following is NOT one of the assumptions behind the PPC? 1. Fixed resources 2. Fixed technology 3. Productive efficiency 4. Allocative efficiency 5. Full employment 6. Only two goods
4. Which of the following is NOT one of the assumptions behind the PPC? 1. Fixed resources 2. Fixed technology 3. Productive efficiency 4. Allocative efficiency 5. Full employment 6. Only two goods
5. Other things equal, this economy will achieve the most rapid rate of growth if: 1. it chooses point A. 2. it chooses point B. 3. it chooses point C. 4. it chooses point D.
5. Other things equal, this economy will achieve the most rapid rate of growth if: 1. it chooses point A. 2. it chooses point B. 3. it chooses point C. 4. it chooses point D.
6. The arrows represent: 1. Achieving allocative efficiency. 2. Increasing economic growth. 3. Increasing our potential. 4. Achieving our potential.
6. The arrows represent: 1. Achieving allocative efficiency. 2. Increasing economic growth. 3. Increasing our potential. 4. Achieving our potential.
Two Types of Economic Growth Increasing the Potential Achieving the Potential
Answer the next question on the basis of the following information for four highway programs of increasing scope. All figures are in millions of dollars. 7. Which alternative should the government build? 1. A. 2. B. 3. C. 4. D.
Answer the next question on the basis of the following information for four highway programs of increasing scope. All figures are in millions of dollars. 7. Which alternative should the government build? 1. A. 2. B. 3. C. 4. D.
8. If the MB < MC, then: 1. You should do more 2. You should do less 3. The result is optimal 4. The best choice was made
8. If the MB < MC, then: 1. You should do more 2. You should do less 3. The result is optimal 4. The best choice was made
9. Which of the following is NOT a policy of structural adjustment (globalization)? 1. Privatization 2. Promotion of Competition 3. Reduced Role of Government 4. Price Controls to help the poor 5. Freer Trade 6. Foreign Investment
9. Which of the following is NOT a policy of structural adjustment (globalization)? 1. Privatization 2. Promotion of Competition 3. Reduced Role of Government 4. Price Controls to help the poor 5. Freer Trade 6. Foreign Investment
10. Which of the following is a distinguishing feature of the command economic system? 1. Private ownership of capital 2. Central planning 3. Heavy reliance on markets 4. Widespread dispersion of economic power
10. Which of the following is a distinguishing feature of the command economic system? 1. Private ownership of capital 2. Central planning 3. Heavy reliance on markets 4. Widespread dispersion of economic power
11. Economic profits in an industry suggest the industry: 1. Can earn more profits by increasing the price 2. Should be larger to satisfy consumers 3. Has excess capacity 4. Is the correct size for consumers
11. Economic profits in an industry suggest the industry: 1. Can earn more profits by increasing the price 2. Should be larger to satisfy consumers 3. Has excess capacity 4. Is the correct size for consumers
12. The invisible hand promotes society s interest because: 1. Individuals pursuing their self-interest will produce goods that people want 2. Individuals will produce goods for others out of concern for their fellow human beings 3. It makes sure that everybody wins from competition 4. Government regulation pushes businesses into producing the right mix of goods
12. The invisible hand promotes society s interest because: 1. Individuals pursuing their self-interest will produce goods that people want 2. Individuals will produce goods for others out of concern for their fellow human beings 3. It makes sure that everybody wins from competition 4. Government regulation pushes businesses into producing the right mix of goods
13. Which is a correct policy for the stabilization function of government? 1. Increase taxes when there is unemployment 2. Increase taxes when there is inflation 3. Decrease spending when there is unemployment 4. Increase money supply when there is inflation
13. Which is a correct policy for the stabilization function of government?: 1. Increase taxes when there is unemployment 2. Increase taxes when there is inflation 3. Decrease spending when there is unemployment 4. Increase money supply when there is inflation
14. If the price in this market for wheat was $4: 1. The market would clear , Qd would equal Qs 2. Buyers would want to purchase more wheat than is currently being supplied 3. Farmers would not be able to sell all of their wheat 4. There would be a shortage of wheat
14. If the price in this market for wheat was $4: 1. The market would clear , Qd would equal Qs 2. Buyers would want to purchase more wheat than is currently being supplied 3. Farmers would not be able to sell all of their wheat 4. There would be a shortage of wheat
15. Which graph represents the effect of an increase in auto worker wages on the market for cars? 1. A 2. B 3. C 4. D
15. Which graph represents the effect of an increase in auto worker wages on the market for cars? 1. A 2. B 3. C 4. D
16. Which graph represents the effect of an increase in incomes on the market for secondhand clothing? 1. A 2. B 3. C 4. D
16. Which graph represents the effect of an increase in incomes on the market for secondhand clothing? 1. A 2. B 3. C 4. D
17. One can say for certainty that the equilibrium price will decline if: 1. S and D both increase 2. S increases and D decreases 3. S decreases and D increases 4. S and D both decrease
17. One can say for certainty that the equilibrium price will decline if: 1. S and D both increase 2. S increases and D decreases 3. S decreases and D increases 4. S and D both decrease
18. Assume before specialization, Pakistan is at C and Malaysia at B , If they specialize 100%, then the gains will be: 1. 45 wheat and 20 rice 2. 20 rice 3. 5 wheat 4. 15 wheat
18. Assume before specialization, Pakistan is at C and Malaysia at B , If they specialize 100%, then the gains will be: 1. 45 wheat and 20 rice 2. 20 rice 3. 5 wheat 4. 15 wheat
19. Which of the following would be a likely terms of trade? 1. 1 rice = 1 wheat 2. 1 rice = 1 and 1/3 wheat 3. 1 rice = 1 and 2/3 wheat 4. 1 rice = 2 and 1/3 wheat
19. Which of the following would be a likely terms of trade? 1. 1 rice = 1 wheat 2. 1 rice = 1 1/3 wheat 3. 1 rice = 1 2/3 wheat 4. 1 rice = 2 1/3 wheat
20. Which argument is this for restricting trade? Restrict trade to build up a new industry. The restrictions are then later removed. 1. Military Self-Sufficiency 2. Increase Domestic Employment 3. Infant Industry 4. Protection Against Dumping 5. Cheap Foreign Labor
20. Which argument for restricting trade? Restrict trade to build up a new industry. The restrictions are then later removed. 1. Military Self-Sufficiency 2. Increase Domestic Employment 3. Infant Industry 4. Protection Against Dumping 5. Cheap Foreign Labor
21. Which is a valid counter argument for the cheap foreign labor argument? 1. Imports may eliminate some jobs BUT they also create jobs. 2. Often once the protection is removed the industries fail 3. There are few documented cases of this. 4. If this were true then one country should never trade with another country that has lower wages.
