Test: Principles of Macroeconomics 
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ECON 2101 - Principles of Macroeconomics, Spring 2009 - Test 1 VERSION B KEY
Multiple Choice (2.5 points each)
Choose the response that best answers the question or completes the statement. Make sure you put all of your responses on the opscan form.
1.
Suppose that a more efficient way to produce a good is discovered, thus lowering production costs for the good, ceteris paribus. This will cause a(n): a)
Increase in quantity supplied, or movement down the supply curve
b)
Increase in supply, or a rightward shift of the supply curve
c)
Decrease in quantity supplied, or movement up the supply curve
d)
Decrease in supply, or a leftward shift of the supply curve
2.
From an economic perspective, when a student decides to attend another year of college, the student has concluded that the marginal: a)
Costs of attending college will be subsidized by someone else such as parents or the government
b)
Benefits of attending college are greater than the marginal costs
c)
Costs of attending college has decreased that year
d)
Benefits of attending college has increased that year
3.
Which is assumed to be most limited in scope under a market system? a)
Government
b)
Freedom of choice
c)
Freedom of enterprise
d)
Competition
4.
If the price of beef rose and the demand for chicken increased, ceteris paribus, then beef and chicken are: a)
Complementary goods
b)
Consumer goods
c)
Substitute goods
d)
Inferior goods
5. The purpose of the ceteris paribus assumption used in economic analysis is to: a) Make sure that all relevant factors are considered
b)
Allow all relevant factors to change during our analysis
c)
Allow economists to assume all relevant factors are increasing over time
d)
Restrict the analysis to the effect of a single economic factor
6.
People demand more of product X when the price of
ECON 2101 - Principles of Macroeconomics, Spring 2009 - Test 1 VERSION B KEY
Multiple Choice (2.5 points each)
Choose the response that best answers the question or completes the statement. Make sure you put all of your responses on the opscan form.
1.
Suppose that a more efficient way to produce a good is discovered, thus lowering production costs for the good, ceteris paribus. This will cause a(n): a)
Increase in quantity supplied, or movement down the supply curve
b)
Increase in supply, or a rightward shift of the supply curve
c)
Decrease in quantity supplied, or movement up the supply curve
d)
Decrease in supply, or a leftward shift of the supply curve
2.
From an economic perspective, when a student decides to attend another year of college, the student has concluded that the marginal: a)
Costs of attending college will be subsidized by someone else such as parents or the government
b)
Benefits of attending college are greater than the marginal costs
c)
Costs of attending college has decreased that year
d)
Benefits of attending college has increased that year
3.
Which is assumed to be most limited in scope under a market system? a)
Government
b)
Freedom of choice
c)
Freedom of enterprise
d)
Competition
4.
If the price of beef rose and the demand for chicken increased, ceteris paribus, then beef and chicken are: a)
Complementary goods
b)
Consumer goods
c)
Substitute goods
d)
Inferior goods
5. The purpose of the ceteris paribus assumption used in economic analysis is to: a) Make sure that all relevant factors are considered
b)
Allow all relevant factors to change during our analysis
c)
Allow economists to assume all relevant factors are increasing over time
d)
Restrict the analysis to the effect of a single economic factor
6.
People demand more of product X when the price of