ECON 1010 – A car that is produced in 2008 but

ECON 1010 – A car that is produced in 2008 but

Subject: Economics    / General Economics
Question

Question 13

A car that is produced in 2008 but not sold until 2009. According to the definition of GDP, in which year’s GDP should it be counted?
a.

2009
b.    2008
c.

2008 and 2009
d.

2008 real GDP; 2009 nominal GDP

Question 14

Which weeks do you need to submit the next (short answer) assignments in Blackboard?
a.

Weeks 5 and 8
b.

Weeks 7 and 10
c.

During the final exam week
d.

No need to submit any assignments because the final exam is going to be easy!

Question 15

If you buy Telstra shares in the stock market, the dollar value of your purchase is
a.

not included in GDP.
b.

included in GDP under consumer expenditure.
c.

included in GDP as a business expense.
d.

included in GDP under investment.

Question 16

Nobu has won a raffle and receives $1,000. He decides to spend this on an engagement ring for his girlfriend who he plans to marry. The opportunity cost of his decision is:
a.    Less than the value of the engagement ring he has purchased.
b.

Greater than the value of the engagement ring he has purchased.
c.

How he would have otherwise chosen to use the $1,000.
d.

Only possible to know once his girlfriend accepts his proposal.

Question 17

In economics it is necessary to distinguish between positive and normative approaches to analysis. This distinction is necessary because:
a.

Positive analysis deals with statements of facts that can be verified by observation and normative analysis deals with opinions that can influence policy decision making.
b.

Positive analysis is more subjective whereas normative analysis is empirically based.
c.

Positive analysis is an abstraction from the real world whereas normative analysis is based on what happens in the real world.
d.

Positive analysis attempts to describe the world as it is, whereas normative analysis attempts to theorise why people behave the way they do in making economic decisions.

Question 18

Given the following information, calculate the rate of increase in the price level (inflation rate) from Year 2008 to 2009.
Year    2008    2009
Real GDP    $9,500    $10,500
Nominal GDP    $10,000    $12,000
a.

8.6%
b.

7.9%
c.

6.2%
d.

10.2%

Question 19

The basic lesson that the circular flow models reveals is:
a.

Monetary and physical flows of goods and services are not connected.
b.

Someone’s spending is someone else’s income.
c.

Government intervention into the economy leads to inefficency.
d.

Firms own and sell the factors of production.

Question 20

Suppose the Australian economy has only three goods, and the typical family purchases the amounts given in the following table. If 1999 is the base year, then what is the CPI for 2006?

Product

Quantity

Price (1999)

Price (2006)

Computers

1

$1,700

$1,200

Books

10

$25

$30

Burgers

50

$1

$2

(Total)

(61)

($1,726)

($1,232)
a.

0.8
b.

125
c.

80