ECO/212 Final Examination Study Guide
This study guide prepares you for the Final Examination you complete in the last week of the course. It contains practice questions, which are related to each week’s objectives. Highlight the correct response, and then refer to the answer key at the end of this Study Guide to check your answers.
Use each week’s questions as a self-test at the start of a new week to reflect on the previous week’s concepts. When you come across concepts that you are unfamiliar with, refer to the Student Guide for that particular week. The Student Guide provides a breakdown of the readings that align to the Final Examination questions.
Week One: Principles of ...view middle of the document...
Objective: Determine how changes in supply and demand influence price, quantity, and market equilibrium.
4. A table that shows the relationship between the price of a good and the quantity demanded of that good is called a(n)
a. price–quantity table
b. complementary table
c. demand schedule
d. equilibrium schedule
Week Two: Markets and Types of Goods
Objective: Summarize the factors that affect labor supply and demand.
5. Which of the following will increase labor demand?
c. Technology improvement
d. Cost reduction
6. Which of the following events could decrease the demand for labor?
a. An increase in migrant workers
b. An increase in the marginal productivity of workers
c. A decrease in demand for the final product produced by labor
d. A decrease in the labor supply
Objective: Compare and contrast public goods, private goods, common resources, and natural monopolies.
7. The typical firm in the U. S. economy
a. has some degree of market power
b. sells its product for a price that is equal to the marginal cost of producing the last unit
c. is perfectly competitive
d. is a monopoly
Objective: Describe the characteristics of competitive markets, monopolies, and oligopolies.
8. A firm under monopolistic competition will earn
a. a zero profit as it sets P = MC
b. a positive profit as it has some monopoly power
c. a zero profit as its P = ATC
d. a positive profit as it sets MC = MR
9. What do economists call a market structure in which there are many firms selling products that are similar but not identical?
a. Perfect competition
c. Monopolistic competition
10. Which of the following is a characteristic of oligopoly but NOT perfect competition?
a. Advertising and sales promotion
b. Profit maximization according to the MR = MC rule
c. Firms are price takers rather than price makers
d. Horizontal demand and marginal revenue curves
Week Three: Measuring Economic Health and Fiscal Policy.
Objective: Describe use of Gross Domestic Policy (GDP) to measure the business cycle.
11. Which of the following topics are more likely to be studied by a macroeconomist than by a microeconomist?
a. The effects of taxes on the prices of airline tickets, the profitability of automobile manufacturing firms, and employment trends in the food-service industry
b. The price of beef, wage differences between genders, and antitrust laws
c. How consumers maximize utility, and how prices are established in markets for agricultural products
d. The percentage of the labor force that is out of work and the difference in average income from country to country
Objective: Describe the roles of the government bodies that determine national fiscal policies.
12. Policymakers who control monetary and fiscal policy and want to offset the effects on output of an economic contraction caused by a shift in aggregate supply could use policy to shift