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Tutorial 1 Quiz

This document contains a 13 question quiz on macroeconomics concepts like the circular flow model, production possibilities frontier (PPF), and Phillips Curve. It also includes two discussion problems - the first asks to discuss 10 principles of economics with examples, and the second asks to draw and explain a circular flow diagram. The quiz questions cover macroeconomic analysis from the viewpoint of the whole economy, macroeconomic statements, opportunity costs, reasons for government intervention, factors that influence growth in living standards, causes of inflation, shifts in the Phillips Curve, the tradeoff suggested by the Phillips Curve, what the PPF shows, factors that can cause the PPF to shift, what unemployment/inefficiency illustrates on the PPF, roles in the circular

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18 views3 pages

Tutorial 1 Quiz

This document contains a 13 question quiz on macroeconomics concepts like the circular flow model, production possibilities frontier (PPF), and Phillips Curve. It also includes two discussion problems - the first asks to discuss 10 principles of economics with examples, and the second asks to draw and explain a circular flow diagram. The quiz questions cover macroeconomic analysis from the viewpoint of the whole economy, macroeconomic statements, opportunity costs, reasons for government intervention, factors that influence growth in living standards, causes of inflation, shifts in the Phillips Curve, the tradeoff suggested by the Phillips Curve, what the PPF shows, factors that can cause the PPF to shift, what unemployment/inefficiency illustrates on the PPF, roles in the circular

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Hiền Nguyễn
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TUTORIAL 1

Introduction

Quiz
1. Macroeconomics approaches the study of economics from the viewpoint of:
a. The entire economy
b. The government
c. Households and firms
d. Specific markets

2. Which of the following is a macroeconomic statement?


a. The gross revenue of all U.S. businesses was $200 billion in 2010
b. The productivity of farmers rised by 1% over the last 5 years
c. Total revenue of General Motors decreased last year
d. The price of meat has doubled by the end of this week

3. Suppose that you pick up $100 off the street and use this sum of money to buy a
football ticket. What is the opportunity cost of watching this football match?
a. nothing because you pick up money off the street
b. $100
c. $100 and the value of the time you spend watching the match
d. $100 + the value of the time you spend watching the match + the cost of the meal you
eat before the match starts

4. What is the reason for the government to intervene in the economy?


a. to promote efficiency and equity
b. to help firms decide how much to produce
c. to protect the market power of some monopolies
d. to protect infant industries from foreign competition

5. Slow growth in U.S living standard over the past several decades is explained by:
a. competition from Japan and other countries
b. slow growth in productivity of labor
c. the bargaining power of labor unions was lower which reduced the average wage of
workers
d. all of the above

6. What is the main cause of large and persistent inflation?


a. the government increases taxes, which raises the cost of production
b. firms with monopoly power manipulate the price at markets
c. the government increases the minimum wage
d. the growth in the quantity of money

7. A rightward shift of Phillips Curve would suggest that:


a. the productivity of labor increased
b. the rate of inflation is now higher at each rate of unemployment
c. the economy is growing faster
d. the rate of inflation is now lower at each rate of unemployment

8. The Phillips Curve suggests a tradeoff between:


a. price level stability and equality
b. the level of unemployment and price level stability
c. unemployment and equality
d. efficiency and equality

9. The PPF shows:


a. that resources are unlimited
b. people prefer one good more than the other
c. the maximum amount of two goods that can be produced assuming the full and
efficient use of available resources
d. combinations of capital and labor necessary to produce specific levels of output

10. Which of the following will cause the PPF to shift away from the origin?
a. economic growth
b. decrease in the resources available for production
c. the size of the labor force shrinks
d. the reduction of unemployment

11. Unemployment and/or inefficiency


a. cause the PPF to shift outward
b. can exist at any point on the PPF
c. are both illustrated by a point outside the PPF
d. are both illustrated by a point inside the PPF

12. In the simple Circular flow Model:


a. Government and international trade play an important role
b. businesses are sellers of final products
c. households receive income through the market for goods and services
d. there is no money flows

13. The Circular Flow Model suggests that:


a. there are only two sectors in the real economy: firms and households
b. the government pays income for households so that they can buy goods and services
from firms
c. households make expenditure in the market for factors of production
d. dollars in the economy are used over and over in an endless cycle

PROBLEMS
1. Discuss 10 principles of economics. Give one example for each principle in reality.

2. Using the outline below, draw a circular-flow diagram representing the interactions
between households and firms in a simple economy. Explain briefly the various parts
of the diagram.

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