2025 Latest Econ 304 Final Exam Prep Test Bank With
120 Exam Practice Questions And Correct Verified
Answers/ Econ 304 Final Exam 2025 Prep (New!)
It is useful to assume that there is a single representative consumer because
A) this is realistic.
B) this is a useful abstraction if we are interested in problems where distribution effects are not
important.
C) this is the only model we know how to work with.
D) a model with one consumer is the same as one with many consumers.
B) this is a useful abstraction if we are interested in problems where distribution effects are not
important.
A utility function
A) needs to measure the absolute level of happiness.
B) needs to measure relative amounts of happiness for a single individual.
C) helps compare the relative happiness of two separate consumers.
D) is most useful if it can be influenced by others.
B) needs to measure relative amounts of happiness for a single individual.
We use indifference curves because
A) households on average do not care.
B) they help represent preferences.
C) households sometimes make mistakes.
D) they formalize the production process.
B) they help represent preferences.
A numeraire is
,A) an average good.
B) a tax levied on each consumer.
C) a good used as a unit of account.
D) an optimal bundle of goods.
C) a good used as a unit of account.
A consumer's real disposable income equals
A) wage income plus consumption expenditures.
B) wage income plus profit income minus taxes.
C) total income minus profit income minus taxes.
D) total income minus wage income minus taxes.
B) wage income plus profit income minus taxes.
With consumption on the vertical axis and leisure on the horizontal axis, the slope of the budget line
is equal to
A) w
B) -w
C) π
D) −π
B) -w
If dividend income increases, the following does not happen:
A) the consumer chooses to consume more leisure.
B) the consumer chooses to consume more consumption goods.
C) the budget constraint shifts to the right.
D) the substitution effect exceeds the income effect.
D) the substitution effect exceeds the income effect.
, The household budget constraint may have a kink because
A) there is uncertainty.
B) households prefer diversity.
C) households may substitute consumption for leisure, or the reverse.
D) leisure is limited by the number of available hours.
D) leisure is limited by the number of available hours.
Theoretically, an increase in the real wage
A) increases leisure.
B) decreases leisure.
C) has an ambiguous effect on leisure.
D) has no effect on leisure.
C) has an ambiguous effect on leisure.
In an economic model, an endogenous variable is
A) a stand-in for more complicated variables.
B) determined by the model itself.
C) determined outside the model.
D) a variable that has no effect on the workings of the model.
B) determined by the model itself.
Which of the following relationships does not hold in the one-period model?
A) G=T
B) Y=C+G
C) Y=zF(K,N)
D) π=Y-wN-C
D) π=Y-wN-C
120 Exam Practice Questions And Correct Verified
Answers/ Econ 304 Final Exam 2025 Prep (New!)
It is useful to assume that there is a single representative consumer because
A) this is realistic.
B) this is a useful abstraction if we are interested in problems where distribution effects are not
important.
C) this is the only model we know how to work with.
D) a model with one consumer is the same as one with many consumers.
B) this is a useful abstraction if we are interested in problems where distribution effects are not
important.
A utility function
A) needs to measure the absolute level of happiness.
B) needs to measure relative amounts of happiness for a single individual.
C) helps compare the relative happiness of two separate consumers.
D) is most useful if it can be influenced by others.
B) needs to measure relative amounts of happiness for a single individual.
We use indifference curves because
A) households on average do not care.
B) they help represent preferences.
C) households sometimes make mistakes.
D) they formalize the production process.
B) they help represent preferences.
A numeraire is
,A) an average good.
B) a tax levied on each consumer.
C) a good used as a unit of account.
D) an optimal bundle of goods.
C) a good used as a unit of account.
A consumer's real disposable income equals
A) wage income plus consumption expenditures.
B) wage income plus profit income minus taxes.
C) total income minus profit income minus taxes.
D) total income minus wage income minus taxes.
B) wage income plus profit income minus taxes.
With consumption on the vertical axis and leisure on the horizontal axis, the slope of the budget line
is equal to
A) w
B) -w
C) π
D) −π
B) -w
If dividend income increases, the following does not happen:
A) the consumer chooses to consume more leisure.
B) the consumer chooses to consume more consumption goods.
C) the budget constraint shifts to the right.
D) the substitution effect exceeds the income effect.
D) the substitution effect exceeds the income effect.
, The household budget constraint may have a kink because
A) there is uncertainty.
B) households prefer diversity.
C) households may substitute consumption for leisure, or the reverse.
D) leisure is limited by the number of available hours.
D) leisure is limited by the number of available hours.
Theoretically, an increase in the real wage
A) increases leisure.
B) decreases leisure.
C) has an ambiguous effect on leisure.
D) has no effect on leisure.
C) has an ambiguous effect on leisure.
In an economic model, an endogenous variable is
A) a stand-in for more complicated variables.
B) determined by the model itself.
C) determined outside the model.
D) a variable that has no effect on the workings of the model.
B) determined by the model itself.
Which of the following relationships does not hold in the one-period model?
A) G=T
B) Y=C+G
C) Y=zF(K,N)
D) π=Y-wN-C
D) π=Y-wN-C
