Econ Sample Questions Guideline

1) Good distractor choices make a good question.  I think we all know from our personal experiences that a hard question is one where we have to choose between two or three seemingly correct choices.
2) Keep economics standard and nothing beyond what one might learn in an introductory economics class in college.
3) Have one 'application' (applying a concept) question (see below).


Questions requiring application

Of the 3 sample questions, it would be good if one of them is an application question, something that requires math.

A few notes about the test:
  1) Calculators are banned so the arithmetic should be simple.
  2) No calculus should be required.
  3) USAD tests have no had graphs and will probably not have graphs in the near future.  Our tests don't have any graphs or charts either.  But the students are expected to know how the graphs work and chances are, they'll draw it out during the test to visualize some of the questions.

For application questions, the answer guide should explain - if applicable - how to intuitively solve the problem and also list - if applicable - a formula that can be used to solve it.  Some kids learn better intuitively, some like formulas.

Luckily for us, Academic Decathlon it's a high school competition, there are only a few types of application questions that can be asked.  Obviously, the more creatively we can ask the question the better.  I'm writing this up fairly quickly, so this isn't an exhaustive list of the type of questions we'd like to ask, but should be enough of a pool to draw sample questions from.  Feel free to combine several concepts into one question:

1) Trade

  Example: Country A can produce X apples and Y oranges.  Country B can produce W applies and Z oranges...

The kids should know:
    a) Term of trade.    Example: Under what exchange rate of apples for oranges would trade happen?
    b) Which country has comparative/absolute advantage.
    c) Relative prices in each country.

2) Supply and demand, quantity supplies and quantity demanded

The kids should know:
 a) 1 curve shifts, what happens?
 b) both curves shift, what happens?
 c) prices change, what happens?

3) Firm decisions

The kids should know
   a) the price elasticity formula (also, what is elastic, inelastic, unit elastic)
   b) the cross-price elasticity formula
   c) MR, MC, AVC, ATC, surplus (basically, they ought to know the basic firm production chart for Monopoly and Perfect Competition)
   c) Marginal product of labor/capital

4) Money supply

   The kids should know:
    a) Reserve ratio.  Example: Customer deposits X dollars.  The reserve ratio is Y percent.  How much money is created?
    b) The basics of money supply and velocity.   Example:  The money supply is X.  The velocity is Y.  What is the nominal GDP?

5) Real vs norminal
     The kids should know:
    a) CPI   Example: CPI in 1990 was X.  CPI in 1996 was Y.  What was the rate of inflation?
    b) GDP deflator   Example: The nominal GDP in 2002 was X.  The GDP deflator is Y and the base year is 2000. What was the real GDP in 2002 using 2000 dollars?
    c) inflation   Example:  Investors need an X% real rate of return on their loans.  If inflation is Y%, what interest rate should they charge?