ECO 365 Final Exam w w w
1) An economist who is studying the relationship between the money supply
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, interest rates, and the rate of inflation is engaged in
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A. microeconomic research w
B. macroeconomic research w
C. theoretical research, because there is no data on these variables
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D. empirical research, because there is no economic theory related to thes
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e variables
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2) A basic difference between microeconomics and macroeconomics is tha
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t microeconomics
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A. focuses on the choices of individual consumers, while macroeconomic
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s considers the behavior of large businesses
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B. focuses on financial reporting by individuals, while macroeconomics focuses o
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n financial reporting by large firms
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C. examines the choices made by individual participants in an economy, whil
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e macroeconomics considers the economy’s overall performance
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D. focuses on national markets, while macroeconomics concentrates o
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n international markets
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3) The distinction between supply and the quantity supplied is best made b
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y saying that
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A. the quantity supplied is represented graphically by a curve and supply as
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a point on that curve associated with a particular price
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,B. supply is represented graphically by a curve and the quantity supplied as
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a point on that curve associated with a particular price
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C. the quantity supplied is in direct relation with prices, whereas supply is i
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n inverse relation
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D. the quantity supplied is in inverse relation with prices, whereas supply is i
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n direct relation
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4) After several years of slow economic growth, world demand for petroleum
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wbegan to rise rapidly in the 1990s. Much of the increase in demand was met
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by additional supplies from sources outside the Organization of Petroleum Ex
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porting Countries (OPEC). OPEC, during this time, was unable to restrain outp
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ut among members in its effort to lift oil prices. What best describes these ev
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ents?
A. The rise in demand shifted the demand for oil to the right. OPEC actions shifte
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d the demand for oil back to the left.
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B. The rise in demand shifted the demand for oil to the right. As price rose, th
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e supply of oil also rose.
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C. The rise in demand shifted the demand for oil to the right. As price rose, th
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e quantity of oil supplied rose.
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D. The rise in demand reflects a movement down along the demand curve a
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s supply shifted to the right when suppliers produced more oil.
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5) Price elasticity of demand is the:
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A. change in the quantity of a good demanded divided by the change in the pric
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e of that good
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B. change in the price of a good divided by the change in the quantity of that goo
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d demanded
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C. percentage change in price of that good divided by the percentage change i
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n the quantity of that good demanded
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,D. percentage change in quantity demanded of a good divided by th
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e percentage change in the price of that good
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6) If average movie ticket prices rise by about 5 percent and attendance falls b
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y about 2 percent, other things being equal, the elasticity of demand for movi
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e tickets is about:
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A. 0.0
B. 0.4
C. 0.6
D. 2.5
7) When labor is the variable input, the average product equals the
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A. marginal product divided by the number of workers
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B. marginal product multiplied by the number of workers
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C. number of workers divided by the quantity of output
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D. quantity of output divided by the number of workers
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8) The increase in output obtained by hiring an additional worker is known as
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A. the average product
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B. the marginal product
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C. the total product
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D. value added w
9) Which of the following is the best example of a long-run decision?
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A. An automobile manufacturing company is considering whether or not t
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o invest in robotic equipment to develop a more cost-
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effective production technique.
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, B. An automobile manufacturing company is considering whether or not to e
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xpand its existing workforce, while keeping the same factory and equipment.
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C. A business consulting firm is considering whether or not to hire interns to assis
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t with research and data processing.
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D. A business consulting firm is considering whether or not to add new computer
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s while maintaining the same number of employees.
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10) Other things being equal, when average productivity falls,
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A. average fixed cost must rise w w w w
B. marginal cost must rise w w w
C. average total cost must rise w w w w
D. average variable cost must rise w w w w
11) According to economist Colin Camerer of the California Institute of Techn
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ology, many New York taxi drivers decide when to finish work by setting an i
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ncome goal for themselves. If this is true, then on busy days when the effecti
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ve hourly wage is higher, taxi drivers will
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A. work the same number of hours as they will on slower days
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B. work fewer hours than they will on slower days
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C. work more hours than they will on slower days
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D. not work any hours
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12) A firm’s demand for labor is derived from the
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A. opportunity costs associated with labor and leisure
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B. desires and needs of the entrepreneur
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C. cost of labor inputs
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D. demand for its output w w w
1) An economist who is studying the relationship between the money supply
w w w w w w w w w w
, interest rates, and the rate of inflation is engaged in
w w w w w w w w w w
A. microeconomic research w
B. macroeconomic research w
C. theoretical research, because there is no data on these variables
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D. empirical research, because there is no economic theory related to thes
w w w w w w w w w w
e variables
w
2) A basic difference between microeconomics and macroeconomics is tha
w w w w w w w w
t microeconomics
w
A. focuses on the choices of individual consumers, while macroeconomic
w w w w w w w w
s considers the behavior of large businesses
w w w w w w
B. focuses on financial reporting by individuals, while macroeconomics focuses o
w w w w w w w w w
n financial reporting by large firms
w w w w w
C. examines the choices made by individual participants in an economy, whil
w w w w w w w w w w
e macroeconomics considers the economy’s overall performance
w w w w w w
D. focuses on national markets, while macroeconomics concentrates o
w w w w w w w
n international markets
w w
3) The distinction between supply and the quantity supplied is best made b
w w w w w w w w w w w
y saying that
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A. the quantity supplied is represented graphically by a curve and supply as
w w w w w w w w w w w w
a point on that curve associated with a particular price
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,B. supply is represented graphically by a curve and the quantity supplied as
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a point on that curve associated with a particular price
w w w w w w w w w
C. the quantity supplied is in direct relation with prices, whereas supply is i
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n inverse relation
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D. the quantity supplied is in inverse relation with prices, whereas supply is i
w w w w w w w w w w w w
n direct relation
w w
4) After several years of slow economic growth, world demand for petroleum
w w w w w w w w w w
wbegan to rise rapidly in the 1990s. Much of the increase in demand was met
w w w w w w w w w w w w w w w
by additional supplies from sources outside the Organization of Petroleum Ex
w w w w w w w w w w
porting Countries (OPEC). OPEC, during this time, was unable to restrain outp
w w w w w w w w w w w
ut among members in its effort to lift oil prices. What best describes these ev
w w w w w w w w w w w w w w
ents?
A. The rise in demand shifted the demand for oil to the right. OPEC actions shifte
w w w w w w w w w w w w w w
d the demand for oil back to the left.
w w w w w w w w
B. The rise in demand shifted the demand for oil to the right. As price rose, th
w w w w w w w w w w w w w w w
e supply of oil also rose.
w w w w w
C. The rise in demand shifted the demand for oil to the right. As price rose, th
w w w w w w w w w w w w w w w
e quantity of oil supplied rose.
w w w w w
D. The rise in demand reflects a movement down along the demand curve a
w w w w w w w w w w w w
s supply shifted to the right when suppliers produced more oil.
w w w w w w w w w w
5) Price elasticity of demand is the:
w w w w w
A. change in the quantity of a good demanded divided by the change in the pric
w w w w w w w w w w w w w w
e of that good
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B. change in the price of a good divided by the change in the quantity of that goo
w w w w w w w w w w w w w w w w
d demanded
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C. percentage change in price of that good divided by the percentage change i
w w w w w w w w w w w w
n the quantity of that good demanded
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,D. percentage change in quantity demanded of a good divided by th
w w w w w w w w w w
e percentage change in the price of that good
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6) If average movie ticket prices rise by about 5 percent and attendance falls b
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y about 2 percent, other things being equal, the elasticity of demand for movi
w w w w w w w w w w w w w
e tickets is about:
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A. 0.0
B. 0.4
C. 0.6
D. 2.5
7) When labor is the variable input, the average product equals the
w w w w w w w w w w
A. marginal product divided by the number of workers
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B. marginal product multiplied by the number of workers
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C. number of workers divided by the quantity of output
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D. quantity of output divided by the number of workers
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8) The increase in output obtained by hiring an additional worker is known as
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A. the average product
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B. the marginal product
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C. the total product
w w
D. value added w
9) Which of the following is the best example of a long-run decision?
w w w w w w w w w w w
A. An automobile manufacturing company is considering whether or not t
w w w w w w w w w
o invest in robotic equipment to develop a more cost-
w w w w w w w w w
effective production technique.
w w
, B. An automobile manufacturing company is considering whether or not to e
w w w w w w w w w w
xpand its existing workforce, while keeping the same factory and equipment.
w w w w w w w w w w
C. A business consulting firm is considering whether or not to hire interns to assis
w w w w w w w w w w w w w
t with research and data processing.
w w w w w
D. A business consulting firm is considering whether or not to add new computer
w w w w w w w w w w w w
s while maintaining the same number of employees.
w w w w w w w
10) Other things being equal, when average productivity falls,
w w w w w w w
A. average fixed cost must rise w w w w
B. marginal cost must rise w w w
C. average total cost must rise w w w w
D. average variable cost must rise w w w w
11) According to economist Colin Camerer of the California Institute of Techn
w w w w w w w w w w
ology, many New York taxi drivers decide when to finish work by setting an i
w w w w w w w w w w w w w w
ncome goal for themselves. If this is true, then on busy days when the effecti
w w w w w w w w w w w w w w
ve hourly wage is higher, taxi drivers will
w w w w w w w
A. work the same number of hours as they will on slower days
w w w w w w w w w w w
B. work fewer hours than they will on slower days
w w w w w w w w
C. work more hours than they will on slower days
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D. not work any hours
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12) A firm’s demand for labor is derived from the
w w w w w w w w
A. opportunity costs associated with labor and leisure
w w w w w w
B. desires and needs of the entrepreneur
w w w w w
C. cost of labor inputs
w w w
D. demand for its output w w w
