# Mathematics Test - Economics

4 A Project to Address Mathematics Prerequisites in Introductory Courses

Produced by the Center for Support of Teaching and Learning, Syracuse University under a grant from the Fund for the Improvement of Post Secondary Education (8/98)
No previous knowledge of economics is necessary for this test

Directions:
For each multiple choice test question, select the correct answer by clicking on the button to the left of your answer choice.
After you have finished the entire examination, click on the CHECK button at the bottom of the page to receive your score.

1. If you were told that 75% of all people in the US are employed, which statement(s) best fit(s) this scenario?
3/4 of all people are employed
75 out of every 100 people are employed
25% are not employed
all of the above

2. The rate of inflation in 1994 was .026. How would this be expressed as a percent?
 .026% .26% 2.6% 26%

3. A student earned \$2000 working at a summer job before entering college. The following summer, the student earned \$2525. Approximately what percent increase did the student's earnings grow from one summer to the next?
 10% 25% 50% 525%

Use the following graph to answer questions 4 - 6.

Approximate Private Spending Data in the
World's Major Industrial Powers for 1992

1. How much private spending occurred in Canada if the total spending was \$3 trillion?
 \$.03 trillion \$.09 trillion \$9 trillion \$3 trillion

2. Approximately what fraction of the total private spending occurred in Japan?
 1/5 1/3 1/34 1/2

3. Which two countries have a combined private spending of 13%?
 France and German Italy and France Italy and the United Kingdom Germany and Canada

Use the following graph to answer questions 7 and 8.

Comparative Gross Domestic Products (GDPs) in Trillions of Dollars, 1993
The GDP data are converted to dollars via international exchange rates.

1. The United States' GDP is approximately how many times larger than Germany's GDP?
 1 time 2 times 3 times 4 times

2. If you combined every country's GDP except the United States, would this value be
 more than the United States less than the United States the same as the United States cannot be determined

Use the following graph to answer questions 9 and 10.

The Distribution Of Income Among Families, 1993

1. Approximately how many times more is the personal income of people in the Highest 20% income group as compared to people in the Second 20% income group?
 2 3 4 5

2. Which statement best describes the information presented in the bar graph?
3. Wealth is equally distributed among families.
Wealth is not equally distributed among families.
As you move from the lowest to the highest income group, the percent of national income increased at a constant rate.
The middle 20% income group takes home half of the national income.

Use the table below to answer questions 11 and 12.

 A factory makes TVs and VCRs. It can operate in 5 different modes in order to produce different numbers of TVs and VCRs as displayed in the table below.

 Type of Product Production Alternatives A B C D E TVs (in thousands) 0 1 2 3 4 VCRs (in thousands) 10 9 7 4 0

1. If the factory operates under mode C, how many TVs and VCRs are produced?
 2 TVs and 7 VCRs 7 TVs and 2 VCRs 7000 TVs and 2000 VCRs 2000 TVs and 7000 VCRs

2. If the factory changes from operating under mode B to operating under mode D, how does the production of TVs and VCRs change?
2 more TVs and 5 fewer VCRs
1000 more TVs and 2000 fewer VCRs
2000 more TVs and 5000 fewer VCRs
5000 more TVs and 2000 fewer VCRs

Use the following graph to answer question 13.

Ice Cream Cones Eaten Vs. Price

1. When the price of ice cream cones rises from \$1 to \$2, what happens to the quantity of cones eaten per week?
 increases from 4 to 7 decreases from 7 to 4 remains the same increases from 0 to 7

Use the following table for questions 14 and 15.

Number of Voluntary Bankruptcies Filed (1981 - 1994)

1. In what year did approximately 560,000 people file for bankruptcy?
 1986 1987 1988 1989

2. Which statement best describes the information presented in the line graph?
The amount of money bankrupt people owed from 1981 to 1992 increased then decreased.
The 1980's proved to be a time in which people did not file for bankruptcy but they did file for bankruptcy in the early 1990's.
There are no identifiable trends in the amount of people who filed for bankruptcy from 1981 to 1994.
In the early 1980's, the number of people filing for bankruptcy remained relatively constant but rose sharply from 1985 through 1992, then tailed off in 1994.

Use this graph for questions 16 and 17.

 In the graph at the right, line S shifts from its initial position of S0 to its final position at S1. Line S, at its initial position, intersects line D at point A. After the shift from S0 to S1 the point of intersection shifts to point B.
1. As you shift from the intersection at point A to the intersection at point B, how does the quantity change?
 increases decreases remains the same

2. As you shift from the intersection at point A to the intersection at point B, how does the price change?
 increases decreases remains the same

Use the graph to answer questions 18 - 20.
 Two lines, A and B, intersect a 45 degree line on the Private Spending versus GDP graph below. Private Spending Vs. Gross Domestic Product (GDP)

1. What is true of all points along the 45 degree line?
Private spending is greater than GDP.
GDP is greater than private spending.
GDP equals private spending.
No information can be determined from the graph.

2. At which GDP value (in billions) does line B intersect the 45 degree line?
 390 400 410 420

3. How much more private spending (in billions) occurs at the intersection of the 45 degree line and B as compared to the intersection of the 45 degree line and A?
None since both values are found on the 45 degree line.
 20 390 410

4. The slope of a line refers to:
the place where the line intersects the x-axis
the place where the line intersects the y-axis
a value representing the rate of change of one variable when compared to another
a value that represents the distance between both the x and y axes and a point on the line
none of the above

5. Compute the slope of the Saving vs. Disposable Income line below.

Savings vs. Disposable Income

 -4 -.25 .25 4

6. In the graph below, the slope of the line is:
 positive negative infinite zero can't be determined

Use the graph to answer questions 23 - 25.

1. At which point is the slope of the curve negative?
 P Q R S R

2. At which point is the slope of the curve zero?
 P Q S T V

3. Which point lies on a part of the curve that has a decreasingly positive slope?
 Q R S T V

4. The equation used to compute Gross Domestic Product (GDP) is:

(GDP) = C + I + G + X

If GDP = 6737, I = 1038, G = 1174, and X = -102 the value for C is:

 4423 4627 6841 none of these

Use the following information to answer questions 28 and 29.

The speed at which money changes hands (V) is represented by the following equation:

1. Use this equation to find M.
 M = VPQ M = V - PQ

2. Use this equation to find P.
 P = VPQ P = VM - Q

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