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1. Suppose the price of electricity increases and that air-conditioners use more
electricity compared to other household appliances. One would expect
A) the demand for electricity to decrease.
B) the demand for air-conditioners to decrease.
C) the demand for air-conditioners to increase.
D) the quantity demanded of air-conditioners to increase.
E) the quantity demanded of air-conditioners to decrease.
2. An economy produces only 1,000,000 computers valued at $2,000 each. Of these
200,000 are sold to consumers, 300,000 are sold to businesses, 300,000 are sold to
the government, and 100,000 are sold abroad. No computers are imported. The
unsold computers at the end of the year are held in inventory by the computer
manufacturers. What is value of the investment component of GDP?
A) $0.3 billion
B) $0.4 billion
C) $0.6 billion
D) $0.7 billion
E) $0.8 billion
3. Which of the following statements is true?
A) An unattainable point is inefficient.
B) An efficient point may or may not be attainable.
C) An inefficient point must be unattainable.
D) An efficient point must be attainable.
E) An attainable point must be efficient.
4. The value of unpaid work by a homemaker ___ included in GDP and value of
housekeeping services sold in the market ___ included in GDP.
A) is; is not
B) is; is
C) is not; is not
D) is not; is
E) is sometimes; is
5. Suppose you enjoy watching TV as long as you have a cable-TV or satellite-TV. If
the monthly price of satellite-TV decreases, one would expect
A) the demand for satellite-TV to decrease
B) the quantity demanded for satellite-TV to decrease
C) the demand for cable-TV to decrease
D) the quantity demanded for cable-TV to decrease
E) the demand for satellite-TV to increase.
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