Eco 401 Quiz # 5

ECO401 – Economics

Online Quiz # 5

February 16, 2010

Total questions: 15

Question # 1 of 15 ( Start time: 06:43:49 PM )      Total Marks: 1

Which of the following statements describes increasing returns to scale:

Select correct option:

            Doubling the inputs used leads to double the output.

            Increasing the inputs by 50% leads to a 25% increase in output.

            Increasing inputs by 1/4 leads to an increase in output of 1/3.

            None of the given options.

Question # 2 of 15 ( Start time: 06:44:19 PM )      Total Marks: 1

Many economists and government analysts have investigated the effect of a minimum wage on labour markets. The general conclusion reached by the investigators is that:

Select correct option:

            The overall effect of the minimum wage is an increase in the unemployment level.

            Teenagers gain most of the beneficial employment effects of the minimum wage.

            All industries are equally affected by the minimum wage laws.

            Over a period of time, the minimum wage laws will increase employment in the economy.

Question # 3 of 15 ( Start time: 06:45:37 PM )      Total Marks: 1

An economist will define the exchange rate between two currencies as the:

Select correct option:

            Amount of one currency that must be paid in order to obtain one unit of another currency.

            Difference between total exports and total imports within a country.

            Price at which the sales and purchases of foreign goods takes place.

            Ratio of import prices to export prices for a particular country.

Question # 4 of 15 ( Start time: 06:47:03 PM )      Total Marks: 1

The kinked demand curve model is based on the assumption that each firm:

Select correct option:

            Considers its rival's output to be fixed

            Considers its rival's price to be fixed

            Believes rivals will match all price changes

            None of the given options

Question # 5 of 15 ( Start time: 06:48:26 PM )      Total Marks: 1

Which of the following is a flow variable?

Select correct option:

            The value of the house in which you live

            The balance in your savings account

            Your monthly consumption of hamburgers

            The number of hamburgers in your refrigerator at the beginning of the month

Question # 6 of 15 ( Start time: 06:49:40 PM )      Total Marks: 1

Indifference curves that are convex to the origin reflect:

Select correct option:

            An increasing marginal rate of substitution.

            A decreasing marginal rate of substitution.

            A constant marginal rate of substitution.

            A marginal rate of substitution that first decreases, then increases.

Question # 7 of 15 ( Start time: 06:50:39 PM )      Total Marks: 1

Which of the following is the Fisher Equation of Exchange?

Select correct option:

            MT=PV.

            VT=PM.

            MV=PQ.

            MY=VP.

Question # 8 of 15 ( Start time: 06:52:02 PM )      Total Marks: 1

Which of the following is NOT an account in the balance of payments?

Select correct option:

            Capital account.

            Financial account.

            Current account.

            Future account.

Question # 9 of 15 ( Start time: 06:52:49 PM )      Total Marks: 1

The economics news on the television reports that the dollar has strengthened relative to the Japanese yen. This means that:

Select correct option:

            The dollar can now purchase more yen.

            The US trade balance with the Japanese economy has improved.

            The yen can now purchase more dollars.

            The dollar has depreciated relative to the yen.

Question # 10 of 15 ( Start time: 06:54:00 PM )    Total Marks: 1

The cross elasticity of demand of complements goods is:

Select correct option:

            Less than 0.

            Equal to 0.

            Greater than 0.

            Between 0 and 1.

Question # 11 of 15 ( Start time: 06:55:25 PM )    Total Marks: 1

A government wishing to reduce a deficit on the current account of their balance of payments through the use of fiscal policy would be most likely to:

Select correct option:

            Raise direct taxation.

            Introduce an import quota.

            Reduce the rate of value added tax on all goods and services.

            Raise interest rates.

Question # 12 of 15 ( Start time: 06:56:47 PM )    Total Marks: 1

Under New Classical macroeconomics monetary policy:

Select correct option:

            Affects the level of equilibrium output

            Affects the composition of equilibrium output

            Affects both the level and composition of equilibrium output

            None of the given options

Question # 13 of 15 ( Start time: 06:58:13 PM )    Total Marks: 1

The relationship between consumer spending and income is known as the:

Select correct option:

            45-degree line.

            Consumption function.

            Investment function.

            Consumer price index.

Question # 14 of 15 ( Start time: 06:59:14 PM )    Total Marks: 1

In the Keynesian cross model, the 45-degree line has a slope of:

Select correct option:

            1.

            0.

            45.

            Infinity.

Question # 15 of 15 ( Start time: 07:00:19 PM )    Total Marks: 1

If disposable income increases from $5 trillion to $6 trillion and, as a result, consumption expenditure increases from $7 trillion to $7.8 trillion, the Marginal Propensity to Consume is:

Select correct option:

            1.0.

            0.8.

            5/7 = 0.71.

            6/7.8 = 0.77.

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