BBA Exit Exam Study Questions And Correct
Answers
What occurs when the price level rises?
People need to hold more money, so interest rates rise, making firms borrow and invest less
The federal government enacted regulation in the 1960's requiring people to wear seatbelts in their
cars. All of the following resulted from this regulation except:
Fewer pedestrians were killed in car accidents
Which of the following is true regarding the production possibilities frontier model of the economy?
Any point along it represents an efficient level of production
If the price in a market happens to be above equilibrium, there will be a ____ in the market, and the
price will tend to ____
surplus, drop
The price elasticity of demand tends to be more elastic...
At points further up and to the left along D curve
If a tax imposed on a good and the incident of the tax ends up falling more heavily on the sellers, this
will be because
Demand is less elastic than supply for that good
If the quantity traded in a market less the equilibrium quantity...
value to consumers for additional units is greater than the cost to sellers of producing those units
Economics: A given tax will cause a bigger deadweight loss if demand and supply are:
Elastic
What statement is true regarding international Trade?
Gains from international trade outweigh losses for importing country
What statement is true regarding the revenues of a firm?
Marginal revenue and average revenue are equal to price.
Suppose the price of fish increases, so households now buy less fish and more chicken. This will cause
the...
CPI to measure more inflation than there really is
The unemployment that results because it takes time for workers to search for the jobs that best suit
their tastes and skills is called?
Frictional unemployment
What occurs when the fed reduces the reserve requirement?
, Money multiplier gets bigger
In a housing bust what would an economist expect the price of homes to do?
Go down because of excess supply
What does balance of payment (BOP) mean?
Method countries use to monitor all international monetary transactions at a specific period of time.
What is an example of events that would decrease the supply of money?
Banks increase amount of excess reserve
What is money?
Store of value and medium of exchange
What market types describe most modern economics?
Mixed
Rational people make decisions on the margins. Which statement would not result in a purchase of
the product being analyzed?
Marginal Cost > Marginal Benefit
How does the Federal Reserve control the money supply?
Prints more as needed
Which statement is false?
Tariffs generate tax revenue for the firms that hold an import license
What two terms are used to describe the aggregate supply curve?
Long & Short run
If the price of a good is artificially set below the equilibrium price, what does this create?
shortage
What is the name of unwanted side effects of the production of goods?
Negative externality
What are the gains from specialization and trade based on?
Comparative advantage
What costs should be considered when making non-routine decisions?
Price of material, Factory overhead cost, Price of labor
What is product cost per unit?
Answers
What occurs when the price level rises?
People need to hold more money, so interest rates rise, making firms borrow and invest less
The federal government enacted regulation in the 1960's requiring people to wear seatbelts in their
cars. All of the following resulted from this regulation except:
Fewer pedestrians were killed in car accidents
Which of the following is true regarding the production possibilities frontier model of the economy?
Any point along it represents an efficient level of production
If the price in a market happens to be above equilibrium, there will be a ____ in the market, and the
price will tend to ____
surplus, drop
The price elasticity of demand tends to be more elastic...
At points further up and to the left along D curve
If a tax imposed on a good and the incident of the tax ends up falling more heavily on the sellers, this
will be because
Demand is less elastic than supply for that good
If the quantity traded in a market less the equilibrium quantity...
value to consumers for additional units is greater than the cost to sellers of producing those units
Economics: A given tax will cause a bigger deadweight loss if demand and supply are:
Elastic
What statement is true regarding international Trade?
Gains from international trade outweigh losses for importing country
What statement is true regarding the revenues of a firm?
Marginal revenue and average revenue are equal to price.
Suppose the price of fish increases, so households now buy less fish and more chicken. This will cause
the...
CPI to measure more inflation than there really is
The unemployment that results because it takes time for workers to search for the jobs that best suit
their tastes and skills is called?
Frictional unemployment
What occurs when the fed reduces the reserve requirement?
, Money multiplier gets bigger
In a housing bust what would an economist expect the price of homes to do?
Go down because of excess supply
What does balance of payment (BOP) mean?
Method countries use to monitor all international monetary transactions at a specific period of time.
What is an example of events that would decrease the supply of money?
Banks increase amount of excess reserve
What is money?
Store of value and medium of exchange
What market types describe most modern economics?
Mixed
Rational people make decisions on the margins. Which statement would not result in a purchase of
the product being analyzed?
Marginal Cost > Marginal Benefit
How does the Federal Reserve control the money supply?
Prints more as needed
Which statement is false?
Tariffs generate tax revenue for the firms that hold an import license
What two terms are used to describe the aggregate supply curve?
Long & Short run
If the price of a good is artificially set below the equilibrium price, what does this create?
shortage
What is the name of unwanted side effects of the production of goods?
Negative externality
What are the gains from specialization and trade based on?
Comparative advantage
What costs should be considered when making non-routine decisions?
Price of material, Factory overhead cost, Price of labor
What is product cost per unit?
