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Economics Midterm Study Guide

45 Questions  I  By Xamboozi
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Midterm Questions

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