ECON 104 Exam 1 Study Guide (Questions
with 100% Verified Answers) | Already
Graded A+ | Brand New Version
1. which of the following does not cause changes in the supply or demand for a
good?
a. technology
b. prices of other goods
c. price
d. number of buyers - ANSWER c. price
2. the most important function of the price system is that it has the ability to:
a. remove scarcity
b. to ensure fairness
c. allow for government regulaiton
d. transmit scarce information to billions of individuals
e. none of the above - ANSWER d. transmit scarce information to
billions of individuals
3. which of the following is not a mistake of the Classical School of thought?
a. infinite regression in value
b. objective theory of value
c. labor theory value of value
d. exchange is a zero sum game
e. the relevant quantities were wrong - ANSWER d. exchange is a zero
sum game
4. which of the following determines the law of demand?
a. the opportunity cost of the next unit
b. increasing marginal utility with each successive unit.
c. law of diminishing marginal utility
, d. the increasing value of each successive unit.
e. none of the above - ANSWER c. law of diminishing marginal utility
5. which of the following is true?
a. the current account is tabulated by the federal reserve, the US
Treasury, and the IRS
b. the current account consists of the value of all goods and some
services that move through customs
c. gains from trade are always the exports to foreign countries
d. comparative advantage is the reason we should try to maximize our
exports in relation to our imports
e. tariffs are beneficial to all citizens, because they encourage people to
purchase US- made goods - ANSWER b. the current account consists
of the value of all goods and some services that move through
customs
6. which of the following is true?
a. gains from trade are 20 mins for Crusoe AND Friday
b. Crusoe specializes in pineapples
c. gains from trade are 130 mins fro Crusoe and 190 mins for Friday
d. gains from trade are 10 mins for Crusoe and zero gains for Friday
e. none of the above - ANSWER b. Crusoe specializes in pineapples
7. Which of the following is not true?
a. rent controls cause housing shortages
b. OPEC monopoly power is the direct result of price controls that were
instituted on domestic oil prices
c. price controls are people control, since prices from peoples' values
d. a price support will cause a shortage
e all of the above are ture - ANSWER d. a price support will cause a shortage
8. the neoclassical revolution:
a. Introduced the idea of subjectivism in value
, b. introduced absolute quantity of analysis
c. was begun by adam smith
d. introduced the equality of exchange doctrine
e. introduced the law of comparative advantage - ANSWER a.
Introduced the idea of subjectivism in value
9. Suppose the exchange rate between dollars and yen is 1 dollow to 100 yen
and then Japan runs a higher rate of inflation than america. before the
exchange rate adjusts, which of the following is true?
a. there will be an excess supply of dollars in japan relative to yen
b. there will be an excess supply of yen in japan relative to dollars
c. there will be a surplus of yen in america relative to dollars.
d. the relative price of goods in japan will fall as compared to american goods
e. there will be a surplus of dollars in japan relative to yen. - ANSWER c.there
will be a surplus of yen in america relative to dollars.
10.the law of supply states that there exists:
a. a direct positive relationship between the relative price of the good
and the quantity of that good supplied
b. an inverse relationship between the relative price of the good and the
quantity of that good supplied.
c. a direct positive relationship between the relative price of the good
and the quantity of that good demanded.
d. an inverse relationship between the relative price of the gond the
quantity of the good demanded.
e. a direct positive relationship between the relative price of the good
and the supply. - ANSWER a. a direct positive relationship between
the relative price of the good and the quantity of that good supplied
11.which of the following is an effect of minimum wage law?
a. increased employment of low skilled workers
b. a redistribution of wages from high skilled union workers to low
skilled workers
, c. a vast reduction of poverty in low skilled workers
d. an increase in demand for higher skilled workers
e. a decrease in the quantity supplied of low skilled labor - ANSWER d.
an increase in demand for higher skilled workers
12.the major problem with the equality of exchange idea was:
a. no problem with Equality of Exchange doctrine, as seen by modern
price theory being founded on this principle
b. it could not explain why voluntary exchange occurs, because equal
values in trade benefits no one.
c. exchange is zero sum, meaning one person gains at anothers expense.
d. the just price doctrine more closely resembles how transactions come
into being.
e. none of the above - ANSWER b. it could not explain why voluntary
exchange occurs, because equal values in trade benefits no one.
which of the following is an example of positive statement?
a. minimum wage should not be instituted because it causes unemployment
b. price controls cause shortages and surpluses
c. exchange is good for people, because it makes everyone better off.
d. market exchange is a better way for allocation of scarce resources than violence.
e. both B & D - ANSWER b. price controls cause shortages and surpluses
which of the following is not true?
a. the purchasing power parity theory of exchange rates is the short run theory
b. the real interest rate parity theory of exchange states that abnormal returns on
assets and investments govern the foreign exchange rates.
c. the purchasing power parity theory of exchange rates states that relative rates of
inflation will govern foreign exchange
d. like goods in different countries should cost the same absent transactions costs
with 100% Verified Answers) | Already
Graded A+ | Brand New Version
1. which of the following does not cause changes in the supply or demand for a
good?
a. technology
b. prices of other goods
c. price
d. number of buyers - ANSWER c. price
2. the most important function of the price system is that it has the ability to:
a. remove scarcity
b. to ensure fairness
c. allow for government regulaiton
d. transmit scarce information to billions of individuals
e. none of the above - ANSWER d. transmit scarce information to
billions of individuals
3. which of the following is not a mistake of the Classical School of thought?
a. infinite regression in value
b. objective theory of value
c. labor theory value of value
d. exchange is a zero sum game
e. the relevant quantities were wrong - ANSWER d. exchange is a zero
sum game
4. which of the following determines the law of demand?
a. the opportunity cost of the next unit
b. increasing marginal utility with each successive unit.
c. law of diminishing marginal utility
, d. the increasing value of each successive unit.
e. none of the above - ANSWER c. law of diminishing marginal utility
5. which of the following is true?
a. the current account is tabulated by the federal reserve, the US
Treasury, and the IRS
b. the current account consists of the value of all goods and some
services that move through customs
c. gains from trade are always the exports to foreign countries
d. comparative advantage is the reason we should try to maximize our
exports in relation to our imports
e. tariffs are beneficial to all citizens, because they encourage people to
purchase US- made goods - ANSWER b. the current account consists
of the value of all goods and some services that move through
customs
6. which of the following is true?
a. gains from trade are 20 mins for Crusoe AND Friday
b. Crusoe specializes in pineapples
c. gains from trade are 130 mins fro Crusoe and 190 mins for Friday
d. gains from trade are 10 mins for Crusoe and zero gains for Friday
e. none of the above - ANSWER b. Crusoe specializes in pineapples
7. Which of the following is not true?
a. rent controls cause housing shortages
b. OPEC monopoly power is the direct result of price controls that were
instituted on domestic oil prices
c. price controls are people control, since prices from peoples' values
d. a price support will cause a shortage
e all of the above are ture - ANSWER d. a price support will cause a shortage
8. the neoclassical revolution:
a. Introduced the idea of subjectivism in value
, b. introduced absolute quantity of analysis
c. was begun by adam smith
d. introduced the equality of exchange doctrine
e. introduced the law of comparative advantage - ANSWER a.
Introduced the idea of subjectivism in value
9. Suppose the exchange rate between dollars and yen is 1 dollow to 100 yen
and then Japan runs a higher rate of inflation than america. before the
exchange rate adjusts, which of the following is true?
a. there will be an excess supply of dollars in japan relative to yen
b. there will be an excess supply of yen in japan relative to dollars
c. there will be a surplus of yen in america relative to dollars.
d. the relative price of goods in japan will fall as compared to american goods
e. there will be a surplus of dollars in japan relative to yen. - ANSWER c.there
will be a surplus of yen in america relative to dollars.
10.the law of supply states that there exists:
a. a direct positive relationship between the relative price of the good
and the quantity of that good supplied
b. an inverse relationship between the relative price of the good and the
quantity of that good supplied.
c. a direct positive relationship between the relative price of the good
and the quantity of that good demanded.
d. an inverse relationship between the relative price of the gond the
quantity of the good demanded.
e. a direct positive relationship between the relative price of the good
and the supply. - ANSWER a. a direct positive relationship between
the relative price of the good and the quantity of that good supplied
11.which of the following is an effect of minimum wage law?
a. increased employment of low skilled workers
b. a redistribution of wages from high skilled union workers to low
skilled workers
, c. a vast reduction of poverty in low skilled workers
d. an increase in demand for higher skilled workers
e. a decrease in the quantity supplied of low skilled labor - ANSWER d.
an increase in demand for higher skilled workers
12.the major problem with the equality of exchange idea was:
a. no problem with Equality of Exchange doctrine, as seen by modern
price theory being founded on this principle
b. it could not explain why voluntary exchange occurs, because equal
values in trade benefits no one.
c. exchange is zero sum, meaning one person gains at anothers expense.
d. the just price doctrine more closely resembles how transactions come
into being.
e. none of the above - ANSWER b. it could not explain why voluntary
exchange occurs, because equal values in trade benefits no one.
which of the following is an example of positive statement?
a. minimum wage should not be instituted because it causes unemployment
b. price controls cause shortages and surpluses
c. exchange is good for people, because it makes everyone better off.
d. market exchange is a better way for allocation of scarce resources than violence.
e. both B & D - ANSWER b. price controls cause shortages and surpluses
which of the following is not true?
a. the purchasing power parity theory of exchange rates is the short run theory
b. the real interest rate parity theory of exchange states that abnormal returns on
assets and investments govern the foreign exchange rates.
c. the purchasing power parity theory of exchange rates states that relative rates of
inflation will govern foreign exchange
d. like goods in different countries should cost the same absent transactions costs
