Economics Midterm Study Guide

45 Questions  I  By Xamboozi
Midterm Questions

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