Answer
1-5
DDBDE
6-10
BCADC
11-15
DEDBB
16-20
EBEDD
21-25
CCEEA
26-30
BAACC
31-35
CCCBB
36-40
CBBDA
Explanation
1
D
2
D Frictional unemployment
3
B II only
4
D Both countries will become better off
5
E In year 2
6
B 7%
7
C Approximately increased by 10%
8
A A decrease in the number of computer manufaction
9
D A car produced in the United States and sold in Europe
10
C Discouraged worker
11
D Overstate the rate of inflation because it ignores consumers’ ability to substitute among similar items
12
E
13
D Two countries should benefit from trade both have
14
B An increase in demand and an increase in supply
15
B A movement along the current PPC and a rightward shift of the future PPC
16
E Real GDP did not change
17
B Constant
18
E
| Price | Quantity |
|---|---|
| Indeterminate | Decrease |
19
D Each nation would increase its consumption possibilities
20
D
| Number of Workers Employed | Unemployment Rate |
|---|---|
| No change | Decrease |
21
C How to fulfill unlimited wants with limited resources
22
C The government increase its domestic purchases of food for use by the military
23
E A newly constructed home
24
E The price level and/or the real GDP has increase
25
A Decrease along with the labor-force participation rate
26
B The inflation rate was negative
27
A Changes in business investment
28
A Bowed outward
29
C Producers are willing and able to sell less because their profits decrease
30
C Price and quantity demanded are inversely related
31
C Is adjusted for price-level changes using a price index
32
C
33
C The purchase of new construction equipment
34
B 1 unit of apples
35
B The economy is exiting a business cycle trough
36
C The value of the forgone benefit of the next best alternative
37
B Peter’s opportunity cost of moving 1 lawn is 1/2 of a pool cleaned
38
B Wants exceed resources
39
D The existing shortage in the market will cause upward pressure on prices until equilibrium is reached at 60 units
40
A The elimination of jobs as a result of technological change