Exam #1 Q#24.docx   (Table: Three-Good Economy II) Suppose an economy produces only the three finished goods shown in the table. The table gives information on the quantities produced and the prices of goods sold in 2008 and 2009. If 2008 prices are used in the calculation of real GDP, then nominal GDP in 2009 is _____ and real GDP in 2009 is _____.   a.  $34,310; $33,700   b.  $35,350; $34,310   c.  $33,700; $35,000   d.  $35,000; $33,700

In 2010, real GDP was $13.2 trillion (using 2005 prices) and nominal GDP was $14.6 trillion. Based on the GDP deflator, prices in 2010 were about _____ than prices in 2005.   a.  9.6% lower   b.  9.6% higher   c.  10.6% lower   d.  10.6% higher

Exam #1 Q1 CH26.docx  (Table: Three-Good Economy I) Suppose an economy produces only the three finished goods shown in the table. The table gives information on the quantities produced and price of goods sold in 2008 and 2009. What is the nominal GDP in 2009? a.  $20,134 b.  $21,134 c.  $26,260 d.  $31,400  

If nominal GDP rose in 2016, we can conclude that:   a.  production rose in 2016.   b.  the price level rose in 2016.   c.  either production or the price level, or both, rose in 2016.   d.  neither production nor the price level rose in 2016.

A change in price is reflected by a movement along the same demand curve, while a change in demand refers to a shift of the entire demand curve.

A decrease in supply raises the price of a good, but it also decreases the quantity demanded, which lowers the price of a good. The net effect on price is ambiguous.

Suppose you spent $10,000 in 2016 remodeling your house, which you originally built for $200,000 in 2000. As a result, GDP in 2016 would:   a.  not change.   b.  increase by $10,000.   c.  increase by $200,000.   d.  increase by $210,000.

For most of human history, salt was a rare and valuable commodity that had to be either mined or extracted from the ocean through evaporation. This changed when modern chemistry allowed humans to produce it in factories. How did this development affect the market for salt?   a.  Demand increased, causing the price to rise.   b.  Demand increased, causing the price to fall.   c.  Supply increased, causing the price to rise.   d.  Supply increased, causing the price to fall.

As the price of lead falls (a key input in the production of automobile batteries), the costs of producing batteries decreases, shifting the supply curve of batteries:   a.  down and to the left.   b.  up and to the right.   c.  down and to the right.   d.  up and to the left.

Advances in technology such as personal computers and cellular telecommunications are indicated in the supply graph by a movement along the supply curve