1. Increases in resources or improvements in technology will tend to cause a society's production possibilities curve to: ?

a. shift inward or to the left. ?

b. shift outward or to the right. ?

c. become horizontal. ?

d. become vertical

2.A headline reads "Lumber Prices Up Sharply." In a competitive market, this situation would lead to a(n):

a. increase in the price and quantity of new homes. ?

b. decrease in the price and quantity of new homes. ?

c. increase in the price of new homes and decrease in quantity. ?

d. decrease in the price of new homes and increase in quantity

3.An increase in demand for oil and an increase in supply of oil will

a. decrease price and increase quantity. ?

b. increase price and decrease quantity. ?

c. increase quantity, but whether it increases price depends on how much each curve shifts. ?

d. increase price, but whether it increases quantity depends on how much each curve shifts

4.Use the following to answer questions 20-21: The descriptions give the responses of four individuals to a Bureau of Labor Statistics (BLS) survey of employment.

1. Mollie just graduated from college and is now looking for work. She has had three job interviews in the past month.

2. George works in an automotive assembly plant. He was laid off six months ago as the economy weakened. He expects to return to work in several months when national economic conditions improve.

3. Jeanette worked as an aircraft design engineer for a company that produces military aircraft until she lost her job last year when the Federal government cut defense spending. She has been looking for similar work for a year but no company seems interested in her aircraft design skills.

4. Ricardo lost his job last year when his company downsized and laid off middle-level managers. He tried to find another job for a year, but was unsuccessful and quit looking for work. Refer to the above information. Which individual is structurally unemployed? a. 1 b. 2 c. 3 d. 4

5. Refer to the above information. Which individual would be classified as a discouraged worker? a. 1 b. 2 c. 3 d. 4 6.In what circumstances would lenders most benefit?

a. when there is an unanticipated decrease in inflation

b. when there is an anticipated increase in inflation

c. when there is an unanticipated increase in inflation

d. when there is an anticipated decrease in inflation

7. You read the following information about the economy: Real GDP up three percent from a year ago. Unemployment rate of 6.1 percent. Consumer Price Index up six percent from a year ago.

Index of Leading Indicators up for the last six months. Prime interest rate of ten percent, up from seven percent a year ago.

a. Explain what each of these economic indicators measures and what the significance of the current data is for the economy.

b. These indicators should paint a picture of the entire economy. Describe that picture