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Economics Midterm Study Guide

45 Questions  I  By Xamboozi
Economics Quizzes & Trivia
Midterm Questions

  
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1.  The communal nature of a highway means that no one individual is motivated to pay for it because even those who do not pay for it will still benefit from using it. This is an example of:
A.
B.
C.
D.
2.  Economics
A.
B.
C.
D.
3.  A model is defined as a:
A.
B.
C.
D.
4.  A firm hires labor in a labor market. If the wage rate is $44, the firm should hire
A.
B.
C.
D.
5.  When the additional satisfaction from a good declines as more of it is consumed, this illustrates the law of
A.
B.
C.
D.
6.  Macroeconomics is best described as the study of
A.
B.
C.
D.
7.  ____ is the situation in which the marginal product of labor is declining as more labor is hired.
A.
B.
C.
D.
8.  Monopolistic competition is identified by
A.
B.
C.
D.
9.  Opportunity cost is defined
A.
B.
C.
D.
10.  Suppose the market for hot pretzels in New York City is perfectly competitive. What is true of demand in this market?
A.
B.
C.
D.
11.  Compared to a perfectly competitive firm, a monopolist:
A.
B.
C.
D.
12.  If the quantity of concert tickets sold decreases by 10 percent when the price increases by 5 percent, the price elasticity of demand over this range of the demand curve is:
A.
B.
C.
D.
13.  If Stimpson University increases tuition in order to increase its revenue, it will:
A.
B.
C.
D.
14.  The short run is a period of time:
A.
B.
C.
D.
15.  A monopolist is
A.
B.
C.
D.
16.  A firm is currently operating where the MC of the last unit produced = $64, and the MR of this unit = $70, i.e. MR > MC. What would you advise this firm to do?
A.
B.
C.
D.
17.  A minimum wage:
A.
B.
C.
D.
18.  Oligopolistic industries consist of
A.
B.
C.
D.
19.  A demand curve usually has a
A.
B.
C.
D.
20.  Which of the following is not true regarding a change in quantity demanded?
A.
B.
C.
D.
21.  All final goods and services that make up GDP can be expressed in the form:
A.
B.
C.
D.
22.  As a result of the decline in the demand for beef in the United States, the demand for cattle ranchers has
A.
B.
C.
D.
23.  Marginal cost is the:
A.
B.
C.
D.
24.  An improvement in a firm's technology that reduces its production costs will result in a (an):
A.
B.
C.
D.
25.  Which of the following items is included in the calculation of GDP?
A.
B.
C.
D.
26.  The golden rule of profit maximization states that any firm maximizes profit by producing where
A.
B.
C.
D.
27.  Which of the following is not necessarily a characteristic of perfect competition?
A.
B.
C.
D.
28.  If the tea harvest is very good in a particular year, the supply of tea will be
A.
B.
C.
D.
29.  The optimal mix of output is the:
A.
B.
C.
D.
30.  Gross Domestic Product (GDP) equals the
A.
B.
C.
D.
31.  A perfectly competitive firm is a price taker because:
A.
B.
C.
D.
32.  If real GDP increased by 3 percent, then
A.
B.
C.
D.
33.  Which of the following is true for monopoly?
A.
B.
C.
D.
34.  If the MPP of an additional unit of labor is 20 units per hour, the product price is $5 per unit, and the wage rate is $60 per hour, then, (Hint: MRP = MPP X p)
A.
B.
C.
D.
35.  If the price of peanut butter increases, other things constant, demand for jelly will
A.
B.
C.
D.
36.  Which of the following is the best example of a microeconomic topic?
A.
B.
C.
D.
37.  Which of the following statements are true?
A.
B.
C.
D.
38.  A public good:
A.
B.
C.
D.
39.  Marginal physical product is
A.
B.
C.
D.
40.  In order to demand a good, the buyer must
A.
B.
C.
D.
41.  If all resources are used efficiently to produce goods and services, a nation will find itself producing
A.
B.
C.
D.
42.  The market produces too few public goods because:
A.
B.
C.
D.
43.  Market failure occurs when:
A.
B.
C.
D.
44.    National income account (billions of   dollars)     Personal consumption expenditures (C) $500     Government expenditures (G) 50     Gross private domestic investment (I) 300     Exports (X) 50    Imports (M) 100   As shown in the above exhibit, GDP as calculated by the expenditure approach is
A.
B.
C.
D.
45.  Economists emphasize the importance of equilibrium in markets because
A.
B.
C.
D.
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