ECONOMICS 102 PRACTICE MIDTERM #2 Covered: Chapter 5 Large Open Economy Chapter 7 (No velocity or elasticity) Chapter 9 (No AD/AS model) A. Multiple choice 1. The nominal demand for money is proportional to a. real income. b. the nominal interest rate. c. the nominal interest rate on money. d. the price level. e. None of the above. 2. Lower interest rates increase the real quantity of money demanded a. by changing the distribution of wealth toward the poor‚ who have
Premium Inflation Macroeconomics Monetary policy
demand. The first approach is the Marginal Utility or Cardinalist Approach. The second is the Ordinalist Approach. We discuss these two approaches separately. Cardinal Utility Analysis: Human wants are unlimited and they are of different intensity. The means at the disposal of a man are not only scarce but they have alternative uses. As a result of scarcity of recourses‚ the consumer cannot satisfy all his wants. Continue reading. Total Utility and Marginal Utility: People buy goods because
Premium Consumer theory Supply and demand Utility
description of a competitive firm’s supply curve is as follows: The competitive firm’s short-run supply curve is that portion of the a. average total cost curve that lies above marginal cost. b. average variable cost curve that lies above marginal cost. c. marginal cost curve that lies above average total cost. d. marginal cost curve that lies above average variable cost. 2 Name: ________________________
Premium Microeconomics Costs Economics
1) A Countrys rate of economic growth is important because an economy that grows to slowly fails to raise the living standards of its citizens 2)Related don’t let this happen to you! Use the data for the country of New Finlandia in the following table to calculate the following 2006 4‚568. A] the percentage of real gap per capita between 2006 and 2010 is ____3.92_____% The average annual growth rate in real gap per capita between 2006 and 2010 is _________2_____% 3)The following table gives real
Premium Economics Gross domestic product European Union
person to person. 2. Marginal utility can be: A. positive‚ but not negative. B. positive or negative‚ but not zero. C. positive‚ negative‚ or zero. D. decreasing‚ but not negative. 4. The ability of a good or service to satisfy wants is called: A. utility maximization. B. opportunity cost. C. revenue potential. D. utility. 9. The above data illustrate the: A. law of comparative advantage. B. utility-maximizing rule. C. law of diminishing marginal utility. D. law of increasing
Premium Consumer theory Supply and demand Utility
When an economy has just come out of a recession a persistent budget deficit exists to in order to stimulate the economy. However‚ the existence of this large deficit in the long run can evolve into a problem due to the financing of the debt‚ and the large opportunity cost it holds. For these reasons a government would want to reduce this. Blanchard & Johnson (2013) outline the two dominant fiscal tools that accomplish a reduction in the government deficit in the short run: increasing taxes and
Free Tax Public finance Economics
measurement of utility is utils Marginal utility • is defined as the additional utility or satisfaction gained from obtaining and consuming an extra unit of a particular good or service. • Marginal utility is also measured in utils. • Marginal utility is measured by the following formula: MUX = ΔTU ΔX • X represents the quantity consumed of a particular product • An example of total and marginal utility Qty of Product X Consumed Total Utility (utils) Marginal Utility (Utils) 0 0 -
Premium Utility Consumer theory Economics
commodity ? (1) 2. W hat is the price elasticity of supply of a commodity whose straight line supply curve passes through the origin forming an angle of 75°? (1) 3. W hat change will take place in marginal product‚ when total product increases at a diminishing rate? (1) 4. G ive the meaning of marginal cost. (1)
Premium Supply and demand
Conspicuous Consumption and Race∗ Kerwin Kofi Charles University of Chicago Erik Hurst University of Chicago Nikolai Roussanov University of Pennsylvania August 2007 Abstract Using nationally representative data on consumption‚ we show that Blacks and Hispanics devote larger shares of their expenditure bundles to visible goods (clothing‚ jewelry‚ and cars) than do comparable Whites. We demonstrate that these differences exist among virtually all subpopulations‚ that they are relatively constant
Premium Household income in the United States
community or nation. Higher curves refer to greater satisfaction‚ lower curves to less satisfaction. It is always in the case that the community indifference curves are negatively sloped and convex from the origin because as a nation consumes more of one good‚ it must consume less of another so as to have the same level of satisfaction. The common slope of these two curves‚ which reflects
Premium Economics Microeconomics