Ag Econ 1042
Quiz 2, 30 points
February 8, 2011
Name _______KEY_________________________
8 a.m. Section
True/False – one point each
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1.
2.
3.
4.
Economic growth tends to make people worse off.
Demand is a schedule of quantities the consumers will choose at various prices.
The key to possessing a comparative advantage is a higher opportunity cost.
Regulations affecting the construction or operation of oil refining facilities will
reduce domestic supply.
5. The U.S. debt has increased annually for over 30 years with only a few exceptions at
the end of the 20th century.
6. The U.S. deficit is expected to hit an all-time high this year.
7. An equilibrium price is also called a market-clearing price because that is the one
price where buyers and sellers agree on the quantity to exchange.
8. A flood that removes land from production would reduce the demand for grain.
9. According to the principle of comparative advantage, worldwide output and
consumption levels are highest when goods are produced where opportunity costs are
lowest.
10. A recession results in a sharp decrease in consumers’ disposable income.
Short answers – five points each
11. Why is the number of job losses decreasing in the U.S.?
Economic growth (↑ in profits)
12. What do we call the total market value of all final goods produces legally within a country?
GDP
TURN THE QUIZ OVER-QUESTIONS ON THE BACK
13. Name the three things that can cause a reduction in the federal deficit.
1. economic growth
2. increased revenues (taxes)
3. decreased spending
14. Show with a diagram why grain prices rise when there is widespread flooding.
S1
S
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D
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