Econ 104 Final Exam Study Questions with
Verified Answers Already Graded A+ | Most
asked Questions with 100% Correct Answers
1. Examining the conditions that could lead to a recession in an economy is an
example of a macroeconomics topic. - ANSWER True
2. Every individual, no matter how rich or poor, is faced with making trade-
offs. - ANSWER True
3. When voluntary exchange takes place, only one party gains from the
exchange. - ANSWER False
4. A college must decide if it wants to offer more Internet-based classes. This
decision involves answering the economic question of "what to produce." -
ANSWER True
5. An increase in the unemployment rate may be represented as a movement
from a point on the production possibilities frontier to a point inside the
frontier. - ANSWER true
6. The full-employment rate of unemployment is zero. - ANSWER false
7. In general, economists rely more heavily on the establishment survey rather
than the household survey to evaluate the state of the labor market. -
ANSWER true
,8. If Ethel sold her 2003 Ford Focus for $2,250 in 2017, the sale of her car
contributed $2,250 to 2017 GDP. - ANSWER false
9. If an increase in residential burglaries results in households spending more
money on security systems, GDP will rise. - ANSWER true
10.Consumption is negatively related to stock market wealth but positively
related to taxes and tax rates. - ANSWER false
11.If aggregate expenditures rise unexpectedly, then inventories will also rise
unexpectedly. - ANSWER false
12.Services are the most interest rate sensitive component of consumption. -
ANSWER false
13.Investment is the least cyclical component of aggregate expenditures. -
ANSWER true
14.The 'job-loss' recovery occurred following the 2001 recession. - ANSWER
true
15.Positive real interest rates imply that if you save today, you can purchase a
smaller basket of goods and services in the future, relative to the basket you
could have consumed today. - ANSWER false
16.The higher the marginal propensity to consume the more powerful tax policy
is to influencing consumption. - ANSWER true
,17.According to the results of the estimated consumption function,
consumption is less sensitive to changes in stock market wealth relative to
changes in real estate wealth. - ANSWER true
18.The sensitivity parameter in the consumption function that measures how
sensitive consumption is to changes in consumer confidence is referred to as
the marginal propensity to consume. - ANSWER false
19.In a consumption function with income (Y) on the horizontal axis and
consumption (C) on the vertical axis, a fall in the real rate of interest (all else
constant) will cause a shift upward of the consumption function. -
ANSWER true
20.One desirable outcome of a market economy is that it leads to a more
equitable distribution of income. - ANSWER False
21.An economic model is a simplified version of reality used to analyze real-
world economic situations. - ANSWER True
22.The decisions Apple makes in determining production levels for its iPhone is
an example of a macroeconomics topic. - ANSWER False
23.Economic resources are also called factors of production. - ANSWER true
24.A curved line has slope values that change at every point. - ANSWER true
25.A straight line has a slope of zero. - ANSWER false
, 26.If a country is producing efficiently and is on the production possibilities
frontier, the only way to produce more of one good is to produce less of the
other. - ANSWER false
27.If a country produces only two goods, then it is not possible to have a
comparative advantage in the production of both those goods. - ANSWER
true
28.Any output combination outside a production possibility frontier is
associated with unused or underutilized resources. - ANSWER false
29.An increase in the labor force shifts the production possibility frontier
inwards over time. - ANSWER false
30.If Sanjaya can shuck more oysters in one hour than Tatiana, then Sanjaya
has a comparative advantage in shucking oysters. - ANSWER false
31.The basis for trade is comparative advantage, not absolute advantage. -
ANSWER True
32.In a two-good, two country world, if one country has an absolute advantage
in the production of both goods, it cannot benefit by trading with the other
country. - ANSWER false
33.For a person to have a comparative advantage in producing a product, she
must be able to produce that product at a lower opportunity cost than her
competitors. - ANSWER true
34.It is possible to have a comparative advantage in producing a good or service
without having an absolute advantage. - ANSWER true
Verified Answers Already Graded A+ | Most
asked Questions with 100% Correct Answers
1. Examining the conditions that could lead to a recession in an economy is an
example of a macroeconomics topic. - ANSWER True
2. Every individual, no matter how rich or poor, is faced with making trade-
offs. - ANSWER True
3. When voluntary exchange takes place, only one party gains from the
exchange. - ANSWER False
4. A college must decide if it wants to offer more Internet-based classes. This
decision involves answering the economic question of "what to produce." -
ANSWER True
5. An increase in the unemployment rate may be represented as a movement
from a point on the production possibilities frontier to a point inside the
frontier. - ANSWER true
6. The full-employment rate of unemployment is zero. - ANSWER false
7. In general, economists rely more heavily on the establishment survey rather
than the household survey to evaluate the state of the labor market. -
ANSWER true
,8. If Ethel sold her 2003 Ford Focus for $2,250 in 2017, the sale of her car
contributed $2,250 to 2017 GDP. - ANSWER false
9. If an increase in residential burglaries results in households spending more
money on security systems, GDP will rise. - ANSWER true
10.Consumption is negatively related to stock market wealth but positively
related to taxes and tax rates. - ANSWER false
11.If aggregate expenditures rise unexpectedly, then inventories will also rise
unexpectedly. - ANSWER false
12.Services are the most interest rate sensitive component of consumption. -
ANSWER false
13.Investment is the least cyclical component of aggregate expenditures. -
ANSWER true
14.The 'job-loss' recovery occurred following the 2001 recession. - ANSWER
true
15.Positive real interest rates imply that if you save today, you can purchase a
smaller basket of goods and services in the future, relative to the basket you
could have consumed today. - ANSWER false
16.The higher the marginal propensity to consume the more powerful tax policy
is to influencing consumption. - ANSWER true
,17.According to the results of the estimated consumption function,
consumption is less sensitive to changes in stock market wealth relative to
changes in real estate wealth. - ANSWER true
18.The sensitivity parameter in the consumption function that measures how
sensitive consumption is to changes in consumer confidence is referred to as
the marginal propensity to consume. - ANSWER false
19.In a consumption function with income (Y) on the horizontal axis and
consumption (C) on the vertical axis, a fall in the real rate of interest (all else
constant) will cause a shift upward of the consumption function. -
ANSWER true
20.One desirable outcome of a market economy is that it leads to a more
equitable distribution of income. - ANSWER False
21.An economic model is a simplified version of reality used to analyze real-
world economic situations. - ANSWER True
22.The decisions Apple makes in determining production levels for its iPhone is
an example of a macroeconomics topic. - ANSWER False
23.Economic resources are also called factors of production. - ANSWER true
24.A curved line has slope values that change at every point. - ANSWER true
25.A straight line has a slope of zero. - ANSWER false
, 26.If a country is producing efficiently and is on the production possibilities
frontier, the only way to produce more of one good is to produce less of the
other. - ANSWER false
27.If a country produces only two goods, then it is not possible to have a
comparative advantage in the production of both those goods. - ANSWER
true
28.Any output combination outside a production possibility frontier is
associated with unused or underutilized resources. - ANSWER false
29.An increase in the labor force shifts the production possibility frontier
inwards over time. - ANSWER false
30.If Sanjaya can shuck more oysters in one hour than Tatiana, then Sanjaya
has a comparative advantage in shucking oysters. - ANSWER false
31.The basis for trade is comparative advantage, not absolute advantage. -
ANSWER True
32.In a two-good, two country world, if one country has an absolute advantage
in the production of both goods, it cannot benefit by trading with the other
country. - ANSWER false
33.For a person to have a comparative advantage in producing a product, she
must be able to produce that product at a lower opportunity cost than her
competitors. - ANSWER true
34.It is possible to have a comparative advantage in producing a good or service
without having an absolute advantage. - ANSWER true
