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ECO 365 FINAL EXAM

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Question;1) An economist;who is studying the relationship between the money supply, interest rates;and the rate of inflation is engaged in;A.;microeconomic;research;B.;macroeconomic research;C.;theoretical;research, because there is no data on these variables;D.;empirical research;because there is no economic theory related to these variables;2) A basic;difference between microeconomics and macroeconomics is that microeconomics;A.;focuses on the;choices of individual consumers, while macroeconomics considers the;behavior of large businesses;B.;focuses on financial;reporting by individuals, while macroeconomics focuses on financial;reporting by large firms;C.;examines the choices made by individual participants;in an economy, while macroeconomics considers the economy's overall;performance;D.;focuses on national;markets, while macroeconomics concentrates on international markets;3) The;distinction between supply and the quantity supplied is best made by saying;that;A.;the quantity;supplied is represented graphically by a curve and supply as a point on;that curve associated with a particular price;B.;supply is represented graphically by a curve and the;quantity supplied as a point on that curve associated with a particular;price;C.;the quantity;supplied is in direct relation with prices, whereas supply is in inverse;relation;D.;the quantity;supplied is in inverse relation with prices, whereas supply is in direct;relation;4) After;several years of slow economic growth, world demand for petroleum began to;rise rapidly in the 1990s. Much of the increase in demand was met by;additional supplies from sources outside the Organization of Petroleum;Exporting Countries (OPEC). OPEC, during this time, was unable to restrain;output among members in its effort to lift oil prices. What best describes;these events?;A.;The rise in demand;shifted the demand for oil to the right. OPEC actions shifted the demand;for oil back to the left.;B.;The rise in demand;shifted the demand for oil to the right. As price rose, the supply of oil;also rose.;C.;The rise in demand shifted the demand for oil to the;right. As price rose, the quantity of oil supplied rose.;D.;The rise in demand;reflects a movement down along the demand curve as supply shifted to the;right when suppliers produced more oil.;5) Price;elasticity of demand is the;A.;change in the;quantity of a good demanded divided by the change in the price of that good;B.;change in the price;of a good divided by the change in the quantity of that good demanded;C.;percentage change in;price of that good divided by the percentage change in the quantity of that;good demanded;D.;percentage change in quantity demanded of a good;divided by the percentage change in the price of that good;6) If average;movie ticket prices rise by about 5 percent and attendance falls by about 2;percent, other things being equal, the elasticity of demand for movie tickets;is about;A.;0.0;B.;0.4;C.;0.6;D.;2.5;7) When labor;is the variable input, the average product equals the;A.;marginal product;divided by the number of workers;B.;marginal product;multiplied by the number of workers;C.;number of workers;divided by the quantity of output;D.;quantity of output divided by the number of workers;8) The increase;in output obtained by hiring an additional worker is known as;A.;the average product;B.;the marginal product;C.;the total product;D.;value added;9) Which of the;following is the best example of a long-run decision?;A.;An automobile manufacturing company is considering;whether or not to invest in robotic equipment to develop a more;cost-effective production technique.;B.;An automobile;manufacturing company is considering whether or not to expand its existing workforce;while keeping the same factory and equipment.;C.;A business;consulting firm is considering whether or not to hire interns to assist;with research and data processing.;D.;A business;consulting firm is considering whether or not to add new computers while;maintaining the same number of employees.;10) Other;things being equal, when average productivity falls;A.;average fixed cost;must rise;B.;marginal cost must;rise;C.;average total cost;must rise;D.;average variable cost must rise

 

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