ECO 372 Assignment 1

Economics 372 Assignment 1

___ 1.    In the circular flow model, the business sector _____ goods and services in _____ markets.
a.    demands; product            c.    supplies; product
b.    demands; resource            d.    supplies; resource

___ 2.    In the circular flow model, the household sector _____ goods and services in _____ markets.
a.    demands; product            c.    supplies; product
b.    demands; resource            d.    supplies; resource

___ 3.    In the circular flow model, the business sector _____ the factors of production (inputs) in _____ markets.
a.    demands; product            c.    supplies; product
b.    demands; resource            d.    supplies; resource

___ 4.    In the circular flow model, the household sector _____ the factors of production (inputs) in _____ markets.
a.    demands; product            c.    supplies; product
b.    demands; resource            d.    supplies; resource

___ 5.    Which of the following would best explain an increase in the demand for jeans?
a.    A decrease in income, assuming jeans are normal goods
b.    A decrease in the popularity of jeans
c.    An increase in the number of schools that allow students to wear jeans
d.    A decrease in the price of jeans

___ 6.    An increase in the demand for oranges is expected to cause:
a.    an increase in the price of an orange.
b.    an increase in the number of oranges consumed.
c.    an increase in the number of oranges sold.
d.    all of the above.

___ 7.    According to the law of supply, an increase in the price of cell phones causes:
a.    an increase in the quantity of cell phones supplied.
b.    an increase in the demand for cell phones.
c.    a decrease in the supply of cell phones.
d.    A decrease in the quantity of cell phones demanded.

___ 8.  When a market is in equilibrium:
a.    quantity supplied exceeds quantity demanded.
b.    quantity demanded exceeds quantity supplied.
c.    quantity demanded equals quantity supplied.
d.    there is either a shortage or a surplus.

Use the data below to answer questions 9 – 10:

Consumption Expenditures (C)    $12,100 billion
Investment Expenditures (I)            $2,800 billion
Government Expenditures (G)      $3,200 billion
Exports (EX)                  $2,500 billion
Imports (IM)                  $2,760 billion
Depreciation                  $2,200 billion

___ 9.    Gross Domestic Product (GDP) is equal to ________

a.    $22,800 billion

b.    $25,560 billion
c.    $19,760 billion
d.    $17,840 billion

___ 10.Net exports are equal to __________.

a.    $5,260 billion
b.     –$260 billion
c.    – $560 billion
d.    $2,500 billion

Here’s the SOLUTION

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