ECON 102 WSU Final Exam Questions With
Correct Answers
Resources - CORRECT ANSWER✔✔-a. Land: this means all natural resources
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b. Labor: all human effort
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c. Physical Capital: goods that are used to produce other goods
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d. Human Capital: the knowledge and skill embodied in the nations people
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e. Entrepreneurial Ability: a special kind of human capital - the ability to create
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new goods and services that people value, and assemble the resources necessary
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to produce, market, and sell those products.
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Scarcity - CORRECT ANSWER✔✔-occurs when the amount of something that
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people desire exceeds the amount that would be available at a zero price
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Suppose the supply of resources stayed constant, but the quantity of money was
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doubled. Every household down receives twice as much money in exchange for
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producing the same number of goods, and services as before. Would the
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households' standard of living double as a result? - CORRECT ANSWER✔✔-No,
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the standard of living would be the same as before because the supply of goods
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and services has not changed.
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When a society cannot produce all the goods and services people wish to have it
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is said that the economy is experiencing - CORRECT ANSWER✔✔-Scarcity
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, For society, a good is not scarce if: - CORRECT ANSWER✔✔-All members of
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society can have all they want of it
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GDP - CORRECT ANSWER✔✔-'Gross Domestic Product" is defined as the Market
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value of all Final goods and services produced within the country in a given time
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period
Write down the equation for computing GDP using the Expenditures Approach -
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CORRECT ANSWER✔✔-GDP = Consumption + Investment + Government
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Purchases + (Exports - Imports) | | | |
Write down the equation for computing GDP using the Income Approach -
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CORRECT ANSWER✔✔-GDP = wages + interest + rent + profit
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Write down the general formula for computing a 'Real' value form page 104 in
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your course pack: - CORRECT ANSWER✔✔-Real GDP = (Nominal GDP)/(Price
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Index)
A job paid $40,000 in 1986, and the CPI (base year 1983) for 1986 was 109.6. The
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same job title paid $70,000 in 2010, when the CPI (base year 1983) was 218.1.
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Express both salaries in base year prices and compare them. Which of those
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salaries represents the higher real income? - CORRECT ANSWER✔✔-a. In base
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year dollars, $40,000/109.6 * 100 = 36,496.35
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b. In base year dollars, $70,000/218.1 * 100 = 32,095.36
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c. Thus, $40,000 in 1986 represents a higher real income than $70,000 in 2010
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Correct Answers
Resources - CORRECT ANSWER✔✔-a. Land: this means all natural resources
| | | | | | | | |
b. Labor: all human effort
| | | |
c. Physical Capital: goods that are used to produce other goods
| | | | | | | | | |
d. Human Capital: the knowledge and skill embodied in the nations people
| | | | | | | | | | |
e. Entrepreneurial Ability: a special kind of human capital - the ability to create
| | | | | | | | | | | | | |
new goods and services that people value, and assemble the resources necessary
| | | | | | | | | | | |
to produce, market, and sell those products.
| | | | | |
Scarcity - CORRECT ANSWER✔✔-occurs when the amount of something that
| | | | | | | | | |
people desire exceeds the amount that would be available at a zero price
| | | | | | | | | | | |
Suppose the supply of resources stayed constant, but the quantity of money was
| | | | | | | | | | | | |
doubled. Every household down receives twice as much money in exchange for
| | | | | | | | | | | |
producing the same number of goods, and services as before. Would the
| | | | | | | | | | | |
households' standard of living double as a result? - CORRECT ANSWER✔✔-No,
| | | | | | | | | | |
the standard of living would be the same as before because the supply of goods
| | | | | | | | | | | | | | |
and services has not changed.
| | | |
When a society cannot produce all the goods and services people wish to have it
| | | | | | | | | | | | | | |
is said that the economy is experiencing - CORRECT ANSWER✔✔-Scarcity
| | | | | | | | |
, For society, a good is not scarce if: - CORRECT ANSWER✔✔-All members of
| | | | | | | | | | | | |
society can have all they want of it
| | | | | | |
GDP - CORRECT ANSWER✔✔-'Gross Domestic Product" is defined as the Market
| | | | | | | | | | |
value of all Final goods and services produced within the country in a given time
| | | | | | | | | | | | | | |
period
Write down the equation for computing GDP using the Expenditures Approach -
| | | | | | | | | | | |
CORRECT ANSWER✔✔-GDP = Consumption + Investment + Government
| | | | | | | |
Purchases + (Exports - Imports) | | | |
Write down the equation for computing GDP using the Income Approach -
| | | | | | | | | | | |
CORRECT ANSWER✔✔-GDP = wages + interest + rent + profit
| | | | | | | | |
Write down the general formula for computing a 'Real' value form page 104 in
| | | | | | | | | | | | | |
your course pack: - CORRECT ANSWER✔✔-Real GDP = (Nominal GDP)/(Price
| | | | | | | | | |
Index)
A job paid $40,000 in 1986, and the CPI (base year 1983) for 1986 was 109.6. The
| | | | | | | | | | | | | | | |
same job title paid $70,000 in 2010, when the CPI (base year 1983) was 218.1.
| | | | | | | | | | | | | | | |
Express both salaries in base year prices and compare them. Which of those
| | | | | | | | | | | | |
salaries represents the higher real income? - CORRECT ANSWER✔✔-a. In base
| | | | | | | | | | |
year dollars, $40,000/109.6 * 100 = 36,496.35
| | | | | |
b. In base year dollars, $70,000/218.1 * 100 = 32,095.36
| | | | | | | | |
c. Thus, $40,000 in 1986 represents a higher real income than $70,000 in 2010
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