Question

1) The price of pepsi rises...what will happen to the demand for coke: a) the quantity demanded of coke will increase b) more coke will be sold at each price c) the demand curve for coke will shift to the right d) the demand curve for coke will shift to the left e) b and c 18) Which items are included in GDP?: a) sales of crack cocaine on a street corner next to Peet's coffee b) a prostitute's legal earnings at the Bunny Ranch is Nevada, for which she receives a W-2 tax form c) government payments for food stamps to an unemployed worker d) Medi-Cal payments to an impoverished California family e) none of the above 19) The number of sellers of a good decreases. This will cause the supply curve to shift to the __ Equilibrium price will and equilibrium quantity will a) left; fall; rise b) left; rise; fall c) right; fall; fall 20) Deflation means prices and is associated with a) rising: economic booms b) falling; recessions and depressions c) rising; recessions and depressions 21) The U.S. has full employment if unemployment is only the sum of: a) frictional and structural unemployment b) frictional and cyclical unemployment c) structural and cyclical unemployment 22) Housewives/husbands are: a) included in the labor force b) unemployed c) excluded from the labor force d) necessarily considered "discouraged workers"

Answer 1

Answer : 17) The answer is option e.

Pepsi and Coke are substitute goods. In case of substitute goods if price rise for one good then demand increase for another good which shift the demand curve of that good to rightward. Here the price of pepsi rises hence the demand for coke will increase at each price level. As a result, the demand curve for coke will shift to rightward. As here options b and c are correct hence option e is the correct answer.

18) The answer is option e.

GDP include the market value of all domestically produced final goods and services. Components of GDP are consumption expenditure, investment, government purchases of goods and services and net export. GDP does not include transfer payment. Based on given options as here options a, b, c and d are not correct hence option e is the answer.

19) The answer is option b.

If number of sellers for a good decrease then the market supply decrease which shift the market supply curve to leftward. As a result, the equilibrium price rise and quantity decrease. Hence except option b other options are not correct. Therefore, option b is the correct answer.

20) The answer is option b.

Deflation means the reduction in price level. Deflation occur in recession and depression situations. Hence except option b other options are not correct. Therefore, option b is the correct answer.

21) The answer is option a.

If unemployment is the sum of frictional unemployment and structural unemployment then this unemployment is called full employment. Hence except option a other options are not correct. Therefore, option a is the correct answer.

22) The answer is option c.

Housewives/husbands are not ready to work at market place. Hence housewives/husbands are not included in labor force. Hence except option c other options are not correct. Therefore, option c is the correct answer.