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Which of the following activities is counted as part of U.S. GDP?   a.  John purchases a counterfeit DVD.   b.  Joe watches a free video on YouTube.   c.  Jake takes a vacation at a Caribbean resort.   d.  Jeff stays in a hotel in Colorado while on a skiing trip.

The difference between nominal GDP and real GDP is that nominal GDP:   a.    measures the total value of only finished goods and services, whereas real GDP measures the value of all goods and services, both intermediate and finished.   b.    measures a country’s production of finished goods and services at current market prices, whereas real GDP measures a country’s production of finished goods and services at the same prices in all years.   c.    is measured in terms of numbers of goods and services produced, whereas real GDP is measured in dollar terms.   d.    measures a country’s production of finished goods and services at fixed prices, whereas real GDP measures a country’s production of all finished goods and services at current market prices.

Exam#1 Q1 Ch4.docx  Refer to the figure. When the supply curve shifts from S0 to S1, the equilibrium price rises to:   a.  $12 and the equilibrium quantity falls to 70.   b.  $10 and the equilibrium quantity falls to 100.   c.  $12 and the equilibrium quantity falls to 40.   d.  $10 and the equilibrium quantity falls to 70.

The equilibrium price and quantity are the only price and quantity that are stable in a free market.

The supply curve tells us the minimum quantity that suppliers would be willing to sell at different prices

Exam #1 Q1 CH3.docx  Refer to the figure. According to the demand curve, if the price of potatoes is $8 a pound, how many pounds are demanded? a.  5 b.  50 c.  60,000 d.  80,000

Exam #1 Q2 CH4.docx  Refer to the figure. When the demand curve shifts from D0 to D1, the equilibrium price rises to:   a.  $9 and the equilibrium quantity rises to 120.   b.  $9 and the equilibrium quantity rises to 160.   c.  $8 and the equilibrium quantity rises to 140.   d.  $8 and the equilibrium quantity rises to 160.

How did the spread of the Internet affect the market for news (regardless of source)?   a.  Demand increased, causing the price to rise.   b.  Demand decreased, causing the price to fall.   c.  Supply decreased, causing the price to rise.   d.  Supply increased, causing the price to fall.

The value of a car produced by Kia (a South Korean company) in a factory located in Tennessee would be included in U.S. GDP.

Imported goods purchased in the United States are counted as part of U.S. GDP.