PRE-ASSESSMENT:
MACROECONOMICS PHBO C719
1. According to the production possibilities curve model, as you increase the
production of one good, what will
happen to the sacrifices of the alternate good? Correct answer- They will steadily
increase.
2. A farmer fully utilizes his resources to produce cauliflower and kale. As the
farmer produces more cauliflower, he has fewer resources available to produce
kale.
Which curve is illustrated in this scenario? Correct answer- Production
possibilities curve
3. What are the main foci of economics? Correct answer- Consumption, production,
and use of scarce resources
4. Study the two-sector circular-flow diagram.
Classify each statement as either a flow of resources or a flow of dollars.
Answer options may be used more than once or not at all. Select your answers
from the pull-down list. Correct answer- Flow of resources -- Households provide
productive resources to firms.
5. Flow of dollars -- Households buy consumer products from firms.
Flow of dollars -- Firms sell products to households.
Flow of resources -- Households supply labor to firms.
Florence could earn an annual salary of $70,000 as a financial advisor or
$60,000 as a bank manager.
Currently, Florence is a teacher and earns an annual salary of $35,000.
6. What is Florence's opportunity cost for choosing to be a teacher instead of a
financial advisor? Correct answer- $35,000
7. Florence is a teacher and earns $35,000 a year. Her spouse is a part-time IT
specialist who earns $45,000 a
year. Florence and her spouse decide that one of them should quit work and
become a stay-at-home parent.
Based on the principle of comparative advantage, who should be the full-time,
stay-at-home parent? Correct answer- Florence should stay home, since she has
a lower opportunity cost.
8. Referring to the three economic questions (what, how, and for whom), in a
market system, by whom are
, these questions determined? Correct answer- The buyers and sellers
9. In the car manufacturing industry, the supply for cars has a positive slope.
10. What happens if the price of cars increases? Correct answer- There will be a
movement along the supply curve.
In the car manufacturing industry, the supply for cars has a positive slope.
11. Which two factors can cause the supply curve to shift? Correct answer- A change
in the cost of labor
A change in expectations about the future
Textbooks and class enrollments are complements.
12. What happens to the demand curve for textbooks if the tuition rate increases?
Correct answer- It will shift to the left.
Below are likely scenarios that affect the demand curve for automobiles.
13. Which scenario is correct? Correct answer- The unemployment rate increases to
15% in the state of Michigan due to a
14. recession. As a result, people will have less income and will be spending less.
This
15. will decrease the demand for automobiles, and the demand curve for
automobiles
16. will shift to the left
17. Classify each option as either increasing or decreasing if the price of tablets is
expected to go down.
18. Answer options may be used more than once or not at all. Select your answers
from the pull-down list. Correct answer- Decrease - Equilibrium price for the
current month
Decrease - Current demand for tablets
Increase - Future demand for tablets
A drought in Columbia destroyed the rice crops, which caused the supply of rice
to decrease.
19. Which scenario will occur as a result of the decrease in supply? Correct answer-
The supply curve for rice will shift leftward. This will cause an increase in the
equilibrium price and a decrease in the equilibrium quantity
The maximum number of skilled and unskilled workers are employed in an
economy.
20. What type of employment is this? Correct answer- Full employment
In January, Harry was laid off from his job, and he immediately began seeking
employment. In May, he
stopped looking for a job. It is now July, and he is still receiving unemployment
benefits.
MACROECONOMICS PHBO C719
1. According to the production possibilities curve model, as you increase the
production of one good, what will
happen to the sacrifices of the alternate good? Correct answer- They will steadily
increase.
2. A farmer fully utilizes his resources to produce cauliflower and kale. As the
farmer produces more cauliflower, he has fewer resources available to produce
kale.
Which curve is illustrated in this scenario? Correct answer- Production
possibilities curve
3. What are the main foci of economics? Correct answer- Consumption, production,
and use of scarce resources
4. Study the two-sector circular-flow diagram.
Classify each statement as either a flow of resources or a flow of dollars.
Answer options may be used more than once or not at all. Select your answers
from the pull-down list. Correct answer- Flow of resources -- Households provide
productive resources to firms.
5. Flow of dollars -- Households buy consumer products from firms.
Flow of dollars -- Firms sell products to households.
Flow of resources -- Households supply labor to firms.
Florence could earn an annual salary of $70,000 as a financial advisor or
$60,000 as a bank manager.
Currently, Florence is a teacher and earns an annual salary of $35,000.
6. What is Florence's opportunity cost for choosing to be a teacher instead of a
financial advisor? Correct answer- $35,000
7. Florence is a teacher and earns $35,000 a year. Her spouse is a part-time IT
specialist who earns $45,000 a
year. Florence and her spouse decide that one of them should quit work and
become a stay-at-home parent.
Based on the principle of comparative advantage, who should be the full-time,
stay-at-home parent? Correct answer- Florence should stay home, since she has
a lower opportunity cost.
8. Referring to the three economic questions (what, how, and for whom), in a
market system, by whom are
, these questions determined? Correct answer- The buyers and sellers
9. In the car manufacturing industry, the supply for cars has a positive slope.
10. What happens if the price of cars increases? Correct answer- There will be a
movement along the supply curve.
In the car manufacturing industry, the supply for cars has a positive slope.
11. Which two factors can cause the supply curve to shift? Correct answer- A change
in the cost of labor
A change in expectations about the future
Textbooks and class enrollments are complements.
12. What happens to the demand curve for textbooks if the tuition rate increases?
Correct answer- It will shift to the left.
Below are likely scenarios that affect the demand curve for automobiles.
13. Which scenario is correct? Correct answer- The unemployment rate increases to
15% in the state of Michigan due to a
14. recession. As a result, people will have less income and will be spending less.
This
15. will decrease the demand for automobiles, and the demand curve for
automobiles
16. will shift to the left
17. Classify each option as either increasing or decreasing if the price of tablets is
expected to go down.
18. Answer options may be used more than once or not at all. Select your answers
from the pull-down list. Correct answer- Decrease - Equilibrium price for the
current month
Decrease - Current demand for tablets
Increase - Future demand for tablets
A drought in Columbia destroyed the rice crops, which caused the supply of rice
to decrease.
19. Which scenario will occur as a result of the decrease in supply? Correct answer-
The supply curve for rice will shift leftward. This will cause an increase in the
equilibrium price and a decrease in the equilibrium quantity
The maximum number of skilled and unskilled workers are employed in an
economy.
20. What type of employment is this? Correct answer- Full employment
In January, Harry was laid off from his job, and he immediately began seeking
employment. In May, he
stopped looking for a job. It is now July, and he is still receiving unemployment
benefits.
