Econ 1103- Practice Midterm Exam

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Economics 1103 080 - Concepts of Macroeconomics

PRACTICE Midterm Exam

Portion A: Multiple Choice (30 marks) Answer the following questions on the scantron sheet. 1 . Which from the following goods best fulfills the definition of scarcity? a) air

b) water in the water

c) water within a city

d) solid wood in a forest

2 . If the government attempts to cut the economic curry into even more equal slices, what happens? a) It is easier to cut the pie, and then the economy can produce a larger cake. b) The government can more easily allocate the pie to prospects most in need. c) The cake gets smaller, and it will have less cake for everyone. d) The economy can spend too much period cutting and loses to be able to produce enough pie for all.

a few. What is a circular-flow diagram?

a) a visual type of how the overall economy is prepared

b) a mathematical model of how the economy performs

c) a model that shows the consequences of government within the economy d) a visual type of the relationship amongst money, rates, and businesses

4. What really does the simple circular-flow diagram demonstrate?

a) that expenditure produces income in order that income plus the value of production will be equal b) that the economy's income surpasses its costs

c) that the expenses of an overall economy exceeds it is income

d) that money " flows” from households to firms and not the other way around

Intended for Questions 5 and six use the data from Desk 1:

Stand 1

Hours needed to help to make one device of:

Amount produced in one thousand hours:

Gound beef


Gound beef



2 . 5


4 hundred






two hundred fifity

5. Based on the data in Table one particular:

a) Canada has an total advantage in both meat and wines

b) Peru has a relative advantage in both gound beef and wines c) Canada has an complete advantage in beef and a comparison advantage in wine d) Argentina posseses an absolute benefits in wines and a comparative advantage in gound beef

6. In line with the data in Table one particular and the theory of relative advantage: a) Canada ought to export both equally goods and Argentina will need to export none good b) Argentina will need to export equally goods and Canada should certainly export none good c) Canada should certainly export gound beef and Argentina should foreign trade wine d) Canada should export wine and Peru should foreign trade beef

several. For what reason really does total result in an overall economy increase when ever each person has specialized? a) Because there is much less competition for the same assets. b) Since each person spends more time generating that item for which there is a comparative advantage. c) Because a wider variety of products can always be produced with specialization. d) Because even more people will be producing items than before.

almost eight. What are exports?

a) a limit positioned on the quantity of merchandise brought into a rustic. b) goods produced in another country and distributed domestically.

c) a country's capability to produce a great.

d) goods developed domestically and sold overseas.

on the lookout for. Which of the following is a correct meaning of GDP?

a) the market benefit of all items produced within a country

b) the market benefit of all final goods and services produced by the citizens of a nation c) the market value of final services and goods consumed within a country over the number of years d) the market benefit of all final goods and services produced within a region in a given period of time

15. Over time, individuals have come to rely more on market-produced goods and less on items that they develop for themselves. What would this change carry out by itself? a) It would help to make GDP fall over time.

b) It might not make any change in GDP as time passes.

c) It would make GDP surge over time.

d) It might change GDP, but in an uncertain direction.

11. Babe Ruth's 1931 salary was $80 500. The price index for 1931 is 12-15. 2 plus the price index for 2010 can be 195. What would Ruth's 1931 salary be equivalent to in 2010? a)$536 000 b)$635 000 c) $828 1000 d)$1 026 000

12. How come measurement concerns in the client price index as an indicator off the cost of living...