NDSU ECON 105 Test 1&2&3&4 (used for final too) Dave Englund - Custom Scholars
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# NDSU ECON 105 Test 1&2&3&4 (used for final too) Dave Englund

question
Test 1
...
question
If a product has an excess of supply, we ca conclude that its price
is above the equilibrium level
question
There are four job offers available to you: a job that pays \$80,000; \$70,000; \$65,000; and \$55,000. If you were to choose the \$65,000 option what would your opportunity cost be?
\$80,000
question
A normative statement is one which
Is based on value judgments
question
The demand curve shows the relationship betweem
price and quantity demanded
question
Utility refers to the
satisfaction which a consumer receives from a good or service
question
I told you that every economy must answer four basic questions. Which of the following is not one of them?
where to produce
question
When the slope of a curve is negative, this means
A decrease in the independent variable will cause an increase in the dependent variable
question
Which of the following is not one of our three economic agents
salesmen
question
Quantity Total Utility Marginal Utility
1 22
2 32
3 40 (P)
4 44
5 45
What is the value of (P)?
8
question
Which of the following is consistent with the law of demand
an increase in the price of salads causes a decrease in the quantity of salads demanded.
question
Which statement best illustrates the concept of diminishing marginal utility
A typical consumer will receive less extra satisfaction from consuming the fourth hamburger per week than the third hamburger per week
question
Which expression is another way of saying marginal benefit
Extra benefit
question
The main difference between the short run and the long run is that
in the short run, at least one input is fixed
question
The law of supply is illustrated by a supply curve that is
upward sloping
question
The relationship between quantity supplied and price is ________ while the relationship between quantity demanded and price is _____
direct, inverse
question
An increase in demand means that
the demand curve has shifted to the right
question
The market for wooden shelves changes due to a price decrease in lumber. This change causes the following
The supply curve will shift to the right
question
The market for wooden shelves changes due to a price decrease in lumber. This change causes the following
Equilibrium price will fall
question
The market for wooden shelves changes due to a price decrease in lumber. This change causes the following
Equilibrium quantity will rise
question
The market for Galaxy 17s changes due to a tax refund of \$1,000 going to every resident of Fargo. This change causes the following:
The demand curve will shift to the right
question
The market for Galaxy 17s changes due to a tax refund of \$1,000 going to every resident of Fargo. This change causes the following:
Equilibrium price will rise
question
The market for Galaxy 17s changes due to a tax refund of \$1,000 going to every resident of Fargo. This change causes the following:
Equilibrium quantity will rise
question
In class we constructed a list of concepts that you could see illustrated in the PPC. All of the following concepts made it on to the list except one. Which one?
Equity
question
All of the following are variables that affect the demand for a product expect
number of sellers
question
A study is conducted involving the variables, number of people attending a water park, and the high temperature for the day. Which variable is independent
the high temperature for the day
question
The term economic scarcity in economics refers to the fact that
no country can produce enough to satisfy everyone's wants
question
The law of supply means that if consumers want a product, it must be supplied
FALSE
question
Ice cream and chocolate sauce would be examples substitute goods
FALSE
question
An example of economies of scale is when farms merge, reducing their need for expensive capital equipment
TRUE
question
Ceteris paribus means slopes down to the right
FALSE
question
Maps are examples of abstraction
TRUE
question
The law of diminishing returns is a short run concept because capital can be changed in the long run
TRUE
question
Our economy determines the allocation of resources through prices and competitive markets
TRUE
question
Mr. Englund tries to make this class fun and informative
(this is a legit question he put on the test)
TRUE
question
EXAM 2
...
question
When marginal cost is increasing
total cost must be increasing
question
As output increases, average fixed costs
decrease
question
Which characteristic would best be associated with perfect competition
price taker
question
For a perfectly competitive firm the demand curve facing the firm will be
a horizontal line on the graph
question
The law of demand
tells us that demand curves slope down to the right
question
The law of diminishing returns only applies in the cases where
there is at least one fixed input of production
question
Recent studies have shown that price elasticity of demand for theatrical plays at current prices is approximately .150
Plays are
relatively inelastic
question
Recent studies have shown that price elasticity of demand for theatrical plays at current prices is approximately .150

If the price of plays increased by 10%
Consumers would decrease their purchases by less than 10%
question
Recent studies have shown that price elasticity of demand for theatrical plays at current prices is approximately .150

To increase total revenue, theaters should:
increase the price
question
The law of diminishing marginal utility means that as a typical consumer consumes units of a product (over the relevant range)
Total utility increases and marginal utility decreases
question
The main differences between the short run and the long run is that
In the short run, at least one variable is fixed
question
If we were to calculate Price Elasticity of Demand and derive the answer +.435, what would be the significance of answers?
It is relatively inelastic
question
THERE IS A GIANT GRAPH ON THE (TFC) (TVC) (MC) ect...
...
question
If we were to calculate Price Elasticity of Supply and derive the answer .812, what would be the significance of our answer?
It is relatively inelastic
question
If we were to calculate Income Elasticity of Demand and derive the answer -.626, what would be the significance of our answer?
This good is inferior
question
If a product has excess of supply, we can conclude that its price
is above the equilibrium level
question
If the demand for product (x) is inelastic, a 4% decrease in the price of (x) will
increase the quantity of (x) demanded by less than 4%
question
Cross price elasticity of demand measures how sensitive purchases of a specific product are to changes in
the price of some other product
question
If we hold the supply curve constant and increase demand
equilibrium price would increase
question
Which of the following changes would decrease the demand for a good?
a decrease in the number of consumer
question
Milk would be an example of an inelastic good
True
question
The government might impose a price ceiling on a market to protect consumers
TRUE
question
If the price of a good increases, quantity supplied would increase
FALSE
question
An increase in resource prices will tend to decrease supply
TRUE
question
The law of diminishing returns is a short run concept because capital can be changed in the long run
TRUE
question
Consumer surplus is derived by a consumer that is willing to pay a higher price than the market price for a product.
TRUE
question
If you were to graph typical cost curves, the marginal cost curve would cross the average variable cost curve at the lowest point of the average variable cost curve.
TRUE
question
If you were to graph typical cost curves, the marginal cost curve would cross the average fixed cost curve at the lowest point of the average fixed cost curve
FALSE
question
In economics it is assumed that the primary goal of the firm is to make a profit, however large or small that amount may be.
FALSE
question
EXAM 3
...
question
Fictionally unemployed
Vicki just graduated from college and is now looking for work. She has had three job interviews in the past month
question
Structurally unemployed
Bonnie worked as an aircraft design engineer for company that produces military aircraft until she lost her job last year when the Fed government cut defense spending. She has been looking for similar work for year but no company seems interested in her aircraft design skills
question
Cyclically unemployed
Damon works in a coffee shop. He was laid off six months ago as the economy weakened. He expects to return to work in several months when national economic conditions improve.
question
The Law of Demand
Tells us that demand curves slope down to the right
question
Cyclical unemployment is not a problem, not something that Macro policy would attempt to fix
FALSE
question
If you were to graph typical cost curves, the marginal cost curve would cross the average fixed cost curve at the lowest point of the average fixed cost curve
FALSE
question
GNP (or GDP) measures both national output and national income
TRUE
question
If inflation was problem in our economy, the Keynesian School would say that the government should not try to fix it (leave the economy alone)
FALSE
question
A used car that is resold this year would be included in this year's GNP
FALSE
question
Government transfer payments are not included in GDP but private transfer payments are
FALSE
question
In class, we agreed that producing 300 million plastic novelty hats would be a good use of resources in this country.
FALSE
question
Marginal cost is the change in fixed cost divided by the change in output
FALSE
question
The current US population is approximately
320 million
question
Which of the following is not included in the Expenditure side of calculating GDP
wages
question
As output increases, average fixed costs
decrease
question
Which characteristic would best be associated with perfect competition
price taker
question
as many units of the product as can be sold
question
If a business is earning losses at the profit maximizing quantity, it should still stay open if
price > average variable cost
question
For a perfectly competitive firm the demand curve facing the firm will be
a horizontal line on the graph
question
For a simple monopolist the demand curve facing the firm will be
the same as the industry's demand curve
question
the AR, MR, TC, MC graph thing again!
...
question
For a graph showing a perfectly competitive firm earning a loss but should stay open, at the profit maximizing quantity, the marginal cost will be
greater than average variable cost
question
Are perfectly competitive firms allocatively efficient
yes, because price equals marginal cost
question
Are simple monopolies allocatively efficient
no, because price does not equal marginal cost
question
Marginal cost equals average total cost at 85 units, marginal revenue at 80 units, and average variable cost at 75 units. At the profit maximizing quantity average total cost is \$25, average variable cost is \$15, average fixed cost is \$10, and the price is \$20. Calculate the profit
-\$400
question
In the previous question would the firm stay open or shut down
stay open because price > average variable cost
question
GDP in the economy at the end of 2015 was
\$18 trillion
question
Nominal GDP is used to compare GDP in different years (factoring for inflation)
false
question
For a simple monopolist the marginal revenue curve is the same as the average revenue curve
false
question
EXAM 4
...
question
The current world population is approximately
7 billion
question
The latest inflation statistic for the 12 months ending March, 2016 was
0.9%
question
For March, the 12 month unemployment rate was
5.0%
question
GDP in the economy at the end of the 2015 was
\$18 trillion
question
From class, as general rule of thumb, \$10,000 in 1976 would be worth approximately how much from today?
\$60,000
question
CPI = 2002 2003 2004
179.9 184 188.9

Inflation from 2002 to 2004 was
5%
question
When consumption schedule is plotted as a straight line, the slope of that line is
less than the slope of the 45 degree line
question
C = 1000 + .8Y for an individual. If this person earned \$1,000 their spending would be
\$1,800
question
Autonomous consumption in the economy depends on the level of income in the economy
FALSE
question
If the MPC in the economy = .8Y, an increase of \$10,000 in consumption would add _____ to national income
\$50,000
question
During wartime, we tend to experience
demand-pull inflation
question
Disposable income does not included
taxes
question
The marginal propensity to consume for the economy does not depend on the level of income
TRUE
question
The Life-Cycle Hypothesis suggests that consumers like to spend their entire tax refund from this year before the year is over
FALSE
question
In the late 1970's the US experienced yearly inflation rates greater than 10% per year.
TRUE
question
Demand-pull inflation often occurs during war time
TRUE
question
German consumers after WWI had to pay about a trillion deutsche marks for something that would have been only one mark four years earlier
TRUE
question
Inflation has occurred in the US every year since
1890
question
In 1933, inflation was a problem in the US
FALSE
question
The US has never dealt with galloping inflation
TRUE
question
If inflation was a problem in our economy, the Neoclassical School would say that the government should not try to fix it (leave the economy alone)
TRUE
question
The poorest 60% of the world's population earns ____ % of world income
6%
question
Half of the people born next year will be born in industrially advanced countries
FALSE
question
The average per capita income for low-income nations is about \$10,000 per year
FALSE
question
All of the following are major problems in developing countries except
structural unemployment
question
TRUE
question
The paradox of thrift asserts that to increase savings in the economy, in reality, which of the following will happen (thus the paradox) except

[basically which of the answers given is correct]
The MPS will increase
question
What should a little country try to do in order to be successful in its international intergration
Find the way to be specialized at high levels of quality in order to find niches in the international markets
question
...
...
1 of 125
question
Test 1
...
question
If a product has an excess of supply, we ca conclude that its price
is above the equilibrium level
question
There are four job offers available to you: a job that pays \$80,000; \$70,000; \$65,000; and \$55,000. If you were to choose the \$65,000 option what would your opportunity cost be?
\$80,000
question
A normative statement is one which
Is based on value judgments
question
The demand curve shows the relationship betweem
price and quantity demanded
question
Utility refers to the
satisfaction which a consumer receives from a good or service
question
I told you that every economy must answer four basic questions. Which of the following is not one of them?
where to produce
question
When the slope of a curve is negative, this means
A decrease in the independent variable will cause an increase in the dependent variable
question
Which of the following is not one of our three economic agents
salesmen
question
Quantity Total Utility Marginal Utility
1 22
2 32
3 40 (P)
4 44
5 45
What is the value of (P)?
8
question
Which of the following is consistent with the law of demand
an increase in the price of salads causes a decrease in the quantity of salads demanded.
question
Which statement best illustrates the concept of diminishing marginal utility
A typical consumer will receive less extra satisfaction from consuming the fourth hamburger per week than the third hamburger per week
question
Which expression is another way of saying marginal benefit
Extra benefit
question
The main difference between the short run and the long run is that
in the short run, at least one input is fixed
question
The law of supply is illustrated by a supply curve that is
upward sloping
question
The relationship between quantity supplied and price is ________ while the relationship between quantity demanded and price is _____
direct, inverse
question
An increase in demand means that
the demand curve has shifted to the right
question
The market for wooden shelves changes due to a price decrease in lumber. This change causes the following
The supply curve will shift to the right
question
The market for wooden shelves changes due to a price decrease in lumber. This change causes the following
Equilibrium price will fall
question
The market for wooden shelves changes due to a price decrease in lumber. This change causes the following
Equilibrium quantity will rise
question
The market for Galaxy 17s changes due to a tax refund of \$1,000 going to every resident of Fargo. This change causes the following:
The demand curve will shift to the right
question
The market for Galaxy 17s changes due to a tax refund of \$1,000 going to every resident of Fargo. This change causes the following:
Equilibrium price will rise
question
The market for Galaxy 17s changes due to a tax refund of \$1,000 going to every resident of Fargo. This change causes the following:
Equilibrium quantity will rise
question
In class we constructed a list of concepts that you could see illustrated in the PPC. All of the following concepts made it on to the list except one. Which one?
Equity
question
All of the following are variables that affect the demand for a product expect
number of sellers
question
A study is conducted involving the variables, number of people attending a water park, and the high temperature for the day. Which variable is independent
the high temperature for the day
question
The term economic scarcity in economics refers to the fact that
no country can produce enough to satisfy everyone's wants
question
The law of supply means that if consumers want a product, it must be supplied
FALSE
question
Ice cream and chocolate sauce would be examples substitute goods
FALSE
question
An example of economies of scale is when farms merge, reducing their need for expensive capital equipment
TRUE
question
Ceteris paribus means slopes down to the right
FALSE
question
Maps are examples of abstraction
TRUE
question
The law of diminishing returns is a short run concept because capital can be changed in the long run
TRUE
question
Our economy determines the allocation of resources through prices and competitive markets
TRUE
question
Mr. Englund tries to make this class fun and informative
(this is a legit question he put on the test)
TRUE
question
EXAM 2
...
question
When marginal cost is increasing
total cost must be increasing
question
As output increases, average fixed costs
decrease
question
Which characteristic would best be associated with perfect competition
price taker
question
For a perfectly competitive firm the demand curve facing the firm will be
a horizontal line on the graph
question
The law of demand
tells us that demand curves slope down to the right
question
The law of diminishing returns only applies in the cases where
there is at least one fixed input of production
question
Recent studies have shown that price elasticity of demand for theatrical plays at current prices is approximately .150
Plays are
relatively inelastic
question
Recent studies have shown that price elasticity of demand for theatrical plays at current prices is approximately .150

If the price of plays increased by 10%
Consumers would decrease their purchases by less than 10%
question
Recent studies have shown that price elasticity of demand for theatrical plays at current prices is approximately .150

To increase total revenue, theaters should:
increase the price
question
The law of diminishing marginal utility means that as a typical consumer consumes units of a product (over the relevant range)
Total utility increases and marginal utility decreases
question
The main differences between the short run and the long run is that
In the short run, at least one variable is fixed
question
If we were to calculate Price Elasticity of Demand and derive the answer +.435, what would be the significance of answers?
It is relatively inelastic
question
THERE IS A GIANT GRAPH ON THE (TFC) (TVC) (MC) ect...
...
question
If we were to calculate Price Elasticity of Supply and derive the answer .812, what would be the significance of our answer?
It is relatively inelastic
question
If we were to calculate Income Elasticity of Demand and derive the answer -.626, what would be the significance of our answer?
This good is inferior
question
If a product has excess of supply, we can conclude that its price
is above the equilibrium level
question
If the demand for product (x) is inelastic, a 4% decrease in the price of (x) will
increase the quantity of (x) demanded by less than 4%
question
Cross price elasticity of demand measures how sensitive purchases of a specific product are to changes in
the price of some other product
question
If we hold the supply curve constant and increase demand
equilibrium price would increase
question
Which of the following changes would decrease the demand for a good?
a decrease in the number of consumer
question
Milk would be an example of an inelastic good
True
question
The government might impose a price ceiling on a market to protect consumers
TRUE
question
If the price of a good increases, quantity supplied would increase
FALSE
question
An increase in resource prices will tend to decrease supply
TRUE
question
The law of diminishing returns is a short run concept because capital can be changed in the long run
TRUE
question
Consumer surplus is derived by a consumer that is willing to pay a higher price than the market price for a product.
TRUE
question
If you were to graph typical cost curves, the marginal cost curve would cross the average variable cost curve at the lowest point of the average variable cost curve.
TRUE
question
If you were to graph typical cost curves, the marginal cost curve would cross the average fixed cost curve at the lowest point of the average fixed cost curve
FALSE
question
In economics it is assumed that the primary goal of the firm is to make a profit, however large or small that amount may be.
FALSE
question
EXAM 3
...
question
Fictionally unemployed
Vicki just graduated from college and is now looking for work. She has had three job interviews in the past month
question
Structurally unemployed
Bonnie worked as an aircraft design engineer for company that produces military aircraft until she lost her job last year when the Fed government cut defense spending. She has been looking for similar work for year but no company seems interested in her aircraft design skills
question
Cyclically unemployed
Damon works in a coffee shop. He was laid off six months ago as the economy weakened. He expects to return to work in several months when national economic conditions improve.
question
The Law of Demand
Tells us that demand curves slope down to the right
question
Cyclical unemployment is not a problem, not something that Macro policy would attempt to fix
FALSE
question
If you were to graph typical cost curves, the marginal cost curve would cross the average fixed cost curve at the lowest point of the average fixed cost curve
FALSE
question
GNP (or GDP) measures both national output and national income
TRUE
question
If inflation was problem in our economy, the Keynesian School would say that the government should not try to fix it (leave the economy alone)
FALSE
question
A used car that is resold this year would be included in this year's GNP
FALSE
question
Government transfer payments are not included in GDP but private transfer payments are
FALSE
question
In class, we agreed that producing 300 million plastic novelty hats would be a good use of resources in this country.
FALSE
question
Marginal cost is the change in fixed cost divided by the change in output
FALSE
question
The current US population is approximately
320 million
question
Which of the following is not included in the Expenditure side of calculating GDP
wages
question
As output increases, average fixed costs
decrease
question
Which characteristic would best be associated with perfect competition
price taker
question
as many units of the product as can be sold
question
If a business is earning losses at the profit maximizing quantity, it should still stay open if
price > average variable cost
question
For a perfectly competitive firm the demand curve facing the firm will be
a horizontal line on the graph
question
For a simple monopolist the demand curve facing the firm will be
the same as the industry's demand curve
question
the AR, MR, TC, MC graph thing again!
...
question
For a graph showing a perfectly competitive firm earning a loss but should stay open, at the profit maximizing quantity, the marginal cost will be
greater than average variable cost
question
Are perfectly competitive firms allocatively efficient
yes, because price equals marginal cost
question
Are simple monopolies allocatively efficient
no, because price does not equal marginal cost
question
Marginal cost equals average total cost at 85 units, marginal revenue at 80 units, and average variable cost at 75 units. At the profit maximizing quantity average total cost is \$25, average variable cost is \$15, average fixed cost is \$10, and the price is \$20. Calculate the profit
-\$400
question
In the previous question would the firm stay open or shut down
stay open because price > average variable cost
question
GDP in the economy at the end of 2015 was
\$18 trillion
question
Nominal GDP is used to compare GDP in different years (factoring for inflation)
false
question
For a simple monopolist the marginal revenue curve is the same as the average revenue curve
false
question
EXAM 4
...
question
The current world population is approximately
7 billion
question
The latest inflation statistic for the 12 months ending March, 2016 was
0.9%
question
For March, the 12 month unemployment rate was
5.0%
question
GDP in the economy at the end of the 2015 was
\$18 trillion
question
From class, as general rule of thumb, \$10,000 in 1976 would be worth approximately how much from today?
\$60,000
question
CPI = 2002 2003 2004
179.9 184 188.9

Inflation from 2002 to 2004 was
5%
question
When consumption schedule is plotted as a straight line, the slope of that line is
less than the slope of the 45 degree line
question
C = 1000 + .8Y for an individual. If this person earned \$1,000 their spending would be
\$1,800
question
Autonomous consumption in the economy depends on the level of income in the economy
FALSE
question
If the MPC in the economy = .8Y, an increase of \$10,000 in consumption would add _____ to national income
\$50,000
question
During wartime, we tend to experience
demand-pull inflation
question
Disposable income does not included
taxes
question
The marginal propensity to consume for the economy does not depend on the level of income
TRUE
question
The Life-Cycle Hypothesis suggests that consumers like to spend their entire tax refund from this year before the year is over
FALSE
question
In the late 1970's the US experienced yearly inflation rates greater than 10% per year.
TRUE
question
Demand-pull inflation often occurs during war time
TRUE
question
German consumers after WWI had to pay about a trillion deutsche marks for something that would have been only one mark four years earlier
TRUE
question
Inflation has occurred in the US every year since
1890
question
In 1933, inflation was a problem in the US
FALSE
question
The US has never dealt with galloping inflation
TRUE
question
If inflation was a problem in our economy, the Neoclassical School would say that the government should not try to fix it (leave the economy alone)
TRUE
question
The poorest 60% of the world's population earns ____ % of world income
6%
question
Half of the people born next year will be born in industrially advanced countries
FALSE
question
The average per capita income for low-income nations is about \$10,000 per year
FALSE
question
All of the following are major problems in developing countries except
structural unemployment
question
TRUE
question
The paradox of thrift asserts that to increase savings in the economy, in reality, which of the following will happen (thus the paradox) except

[basically which of the answers given is correct]
The MPS will increase
question
What should a little country try to do in order to be successful in its international intergration
Find the way to be specialized at high levels of quality in order to find niches in the international markets
question
...
...

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