Question

(7)The average price of regular unleaded gasoline in Arlington County should be about $1.10. This statement is an example of:

(a)A normative statement

(b)A positive statement

(c)A statement of the fallacy of composition

(d)A deductive statement

(8)If there is an inverse relationship between inflation and unemployment in the economy of a city, it would be correct to conclude that:

(a)There is a positive relationship between inflation and unemployment in the city’s economy

(b)There is a horizontal relationship between inflation and unemployment in the city’s economy

(c)A decrease in inflation leads to an increase in unemployment and vice versa in the city’s economy

(d)A decrease in inflation leads to a decrease in unemployment and vice versa in the city’s economy

(9)The shortage of resources in markets is another way to describe the scarcity of resources in the world is:

(a)A true statement

(b)A false statement

(c)(a) or (b) above

(d)None of the above

(10)The decision of cattle ranchers to supply 1,000,000 lbs. of steak to local markets on a monthly basis in order to satisfy their clients’ consumption needs is in keeping with which of the following questions:

(a)How to produce steak?

(b)Where to produce steak?

(c)When to produce steak?

(d)None of the above

                                                              Table#1-Supply of Coffee Beans

Quantity supplied Per Month (Millions of Bushels of Coffee beans)	Price Per Coffee beans
185	$10.99
180	10.99
175	10.99
164	10.99
155	10.99
142	10.99

                               

(11)The data for the price and quantity supplied of coffee beans in Table#1 above demonstrate a (an) -------------------------------------------------relationship.

(a)Vertical

(b)Inverse

(c)Direct

(d)Horizontal

(12)The largest expenditure component of US GDP in any given year is:

(a)Net exports

(b)Consumption

(c)Gross investment

(d)None of the above

                              Table#2-Disposable Income, Consumption and Savings Data

Disposable Income or (Yd)			Consumption or   (C)	Saving or (S)
$ 0			$       500	$
14,500				-1200
			18,650	850
24,785
32,596			36,768
			0	48,655

(13)Which of the following is consumption spending for the household in Table#2 above when saving is -$1200?

(a)$13,300

(b)$16,700                  

(c)More information needed

(d)None of the above

Answer 1