Economics Midterm Study Guide

45 Questions  I  By Xamboozi on October 24, 2009
Midterm Questions

  
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1.  An improvement in a firm's technology that reduces its production costs will result in a (an):
A.
B.
C.
D.
2.  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.
3.  Market failure occurs when:
A.
B.
C.
D.
4.  Which of the following is the best example of a microeconomic topic?
A.
B.
C.
D.
5.  Monopolistic competition is identified by
A.
B.
C.
D.
6.  The optimal mix of output is the:
A.
B.
C.
D.
7.  Which of the following is not true regarding a change in quantity demanded?
A.
B.
C.
D.
8.  A minimum wage:
A.
B.
C.
D.
9.  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.
10.  Compared to a perfectly competitive firm, a monopolist:
A.
B.
C.
D.
11.  If the price of peanut butter increases, other things constant, demand for jelly will
A.
B.
C.
D.
12.  A monopolist is
A.
B.
C.
D.
13.  In order to demand a good, the buyer must
A.
B.
C.
D.
14.  A perfectly competitive firm is a price taker because:
A.
B.
C.
D.
15.  Macroeconomics is best described as the study of
A.
B.
C.
D.
16.  The short run is a period of time:
A.
B.
C.
D.
17.  ____ is the situation in which the marginal product of labor is declining as more labor is hired.
A.
B.
C.
D.
18.  Economics
A.
B.
C.
D.
19.  A model is defined as a:
A.
B.
C.
D.
20.    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.
21.  When the additional satisfaction from a good declines as more of it is consumed, this illustrates the law of
A.
B.
C.
D.
22.  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.
23.  If the tea harvest is very good in a particular year, the supply of tea will be
A.
B.
C.
D.
24.  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.
25.  Opportunity cost is defined
A.
B.
C.
D.
26.  Which of the following is true for monopoly?
A.
B.
C.
D.
27.  The market produces too few public goods because:
A.
B.
C.
D.
28.  Which of the following items is included in the calculation of GDP?
A.
B.
C.
D.
29.  The golden rule of profit maximization states that any firm maximizes profit by producing where
A.
B.
C.
D.
30.  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.
31.  Gross Domestic Product (GDP) equals the
A.
B.
C.
D.
32.  Economists emphasize the importance of equilibrium in markets because
A.
B.
C.
D.
33.  All final goods and services that make up GDP can be expressed in the form:
A.
B.
C.
D.
34.  If all resources are used efficiently to produce goods and services, a nation will find itself producing
A.
B.
C.
D.
35.  Which of the following is not necessarily a characteristic of perfect competition?
A.
B.
C.
D.
36.  Oligopolistic industries consist of
A.
B.
C.
D.
37.  Marginal physical product is
A.
B.
C.
D.
38.  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.
39.  A demand curve usually has a
A.
B.
C.
D.
40.  A firm hires labor in a labor market. If the wage rate is $44, the firm should hire
A.
B.
C.
D.
41.  Which of the following statements are true?
A.
B.
C.
D.
42.  Marginal cost is the:
A.
B.
C.
D.
43.  A public good:
A.
B.
C.
D.
44.  If Stimpson University increases tuition in order to increase its revenue, it will:
A.
B.
C.
D.
45.  If real GDP increased by 3 percent, then
A.
B.
C.
D.
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