Eco 212 final exam

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This pack of ECO 212 Final Exam consists of:
ECO 212 ECO212 Final Exam A
1)Economics does not study correct or incorrect behaviors,
but rather it assumes that economic agents make the best
decisions given their knowledge of the costs and benefits.
What term best describes this behavior?
2) By definition, what is economics the study of?
3) What is the term in economics by which a group of buyers
and sellers of a product come together to trade?
4) Which of the following statements describes the actions of
producers in the circular flow model?
5) If a commercial dairy farm wants to raise funds to
purchase feeding troughs, in which market does it do so?
6) Which of the following is not a critical function of the
government in facilitating the operation of a market
economy?
7) If demand is inelastic, the absolute value of the price
elasticity of demand is
8) Economists in general
9) A demand curve which is ________ represents perfectly
inelastic demand, and a demand curve which is ________
represents inelastic demand.
10) A decrease in the price of GPS systems will result in
11) At a product's equilibrium price
12) If, for a product, the quantity supplied exceeds the
quantity demanded, the market price will fall until

2. 13) Marginal revenue product of labor for a competitive
seller is
14) Let MP = marginal product, P = output price, and W =
wage, then the equation that represents the condition where
a competitive firm would hire another worker is
15) Marginal revenue product for a perfectly competitive
seller is equal to
16) An individual's labor supply curve shows
17) A firm's demand for labor curve is also called its
18) A decrease in the wage rate causes
19) Which of the following displays these two characteristics:
nonrivalry and nonexcludability in consumption?
20) Which of the following is an example of a quasi-public
good?
21) Which of the following displays these two characteristics:
rivalry and nonexcludability?
22) A monopoly is a seller of a product
23) The labor supply for an industry would decrease if
24) A characteristic found only in oligopolies is
25) The Philippines and Vietnam have roughly the same size
population. Suppose the GDP of the Philippines is $1,000
billion and the GDP of Vietnam is $10,000 billion. You should
conclude
26) Gross domestic product understates the total production
of final goods and services because of the omission of
27) Gross domestic product is calculated by summing up
28) Fiscal policy refers to changes in
29) If the economy is slipping into a recession, which of the
following would be an appropriate fiscal policy?
30) Which of the following is an objective of fiscal policy?
31) Which of the following assets is most liquid?

3. 32) If credit card balances rise in the economy, then M1 will
________ and M2 will ________.
33) Economists estimate that ________ of U.S. currency is
outside the United States and held primarily by ________.
34) The M2 measure of the money supply equals
35) The M1 measure of the money supply equals
36) Which of the following is one of the most important
benefits of money in an economy?
37) Open market operations refer to the purchase or sale of
________ to control the money supply.
38) Which of the following determines the amount of money
the banking system as a whole can create?
39) Money market mutual funds sell shares to investors and
use the money to buy
40) The goals of monetary policy tend to be interrelated. For
example, when the Fed pursues the goal of ________, it also
can achieve the goal of ________ simultaneously.
41) The Federal Reserve System's four monetary policy goals
are
42) The Federal Reserve's two main ________ are the money
supply and the interest rate.
43) Specializing in the production of a good or service in
which one has a comparative advantage enables a country to
do all of the following except
44) Table 2-3 Serena Haley Bracelets 8 9 Necklaces 16 12
Refer to Table 2-3. Which of the following statements is true?
45) Table 2-3 Serena Haley Bracelets 8 9 Necklaces 16 12
Refer to Table 2-3. What is Haley's opportunity cost of
making a bracelet?
46) How does an increase in a country's exchange rate affect
its balance of trade?

4. 47) For each bottle of wine that Italy produces, it gives up the
opportunity to make 10 pounds of cheese. France can
produce 1 bottle of wine for every 25 pounds of cheese it
produces. Which of the following is true about the
comparative advantage between the two countries?
48) When the market value of the dollar rises relative to
other currencies around the world, we say that
49) If the dollar appreciates against the Mexican peso,
50) If the purchasing power of the dollar is greater than the
purchasing power of the euro, purchasing power parity
predicts that the exchange rate will
51) If interest rates in the United States rise
52) The three most important international financial centers
today are
53) China has been accused of deliberately undervaluing its
currency, the yuan, in order to
54) What two countries each accounted for more than 25%
of all foreign purchases of U.S. stocks and bonds in 2008?
ECO 212 ECO212 Final Exam B
1) Economics does not study correct or incorrect behaviors,
but rather it assumes that economic agents make the best
decisions given their knowledge of the costs and benefits.
What term best describes this behavior?
2) What is the term in economics by which a group of buyers
and sellers of a product come together to trade?
3) Why do consumers have to make tradeoffs in deciding
what to consume?
4) What might you call an outward shift of a nation's
production possibilities frontier?
5) Which of the following is not a critical function of the
government in facilitating the operation of a market

5. economy?
6) Which of the following is an example of spending on goods
and services in the circular flow model?
7) A demand curve which is ________ represents perfectly
inelastic demand, and a demand curve which is ________
represents inelastic demand.
8) Suppose the value of the price elasticity of demand is -3.
What does this mean?
9) Price elasticity of demand measures
10) Danielle Ocean pays for monthly pool maintenance for
her home swimming pool. Last week the owner of the pool
service informed Danielle that he will have to raise his
monthly service fee because of increases in the price of pool
chemicals. How is the market for pool maintenance services
affected by this?
11) At a product's equilibrium price
12) Which of the following is the correct way to describe
equilibrium in a market?
13) Let MP = marginal product, P = output price, and W =
wage, then the equation that represents the condition where
a competitive firm would hire another worker is
14) Marginal revenue product of labor for a competitive
seller is
15) Firms use information on labor's marginal revenue
product to determine
16) A decrease in the wage rate causes
17) How will an increase in population affec...
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