Econ 312 Week 4 Midterm Exam

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ECON 312 Week 4 Midterm Exam

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(TCO 1) As a student of economics, when you speak of scarcity, you are referring to the ability of society to

(TCO 1) Henry wants to buy a book. The economic perspective suggests that Henry will buy the book if

(TCO 1) Which situation would most likely cause a nation’s production possibilities curve to shift inward?

(TCO 1) A tradeoff exists between two economic goals, X and Y. This tradeoff means that

(TCO 1) The individual who brings together economic resources and assumes the risk of business ventures in a capitalist economy is called the

(TCO 1) The economy of Germany would best be classified as

(TCO 1) By consumer sovereignty we mean that

(TCO 1) By free enterprise, we mean that

(TCO 1) Which is not one of the five fundamental questions that an economy must deal with?

(TCO 1) A characteristic of centrally planned economies is that

(TCO 2) The quantity demanded of a product increases as its price declines because the

(TCO2) If there is a shortage of product X

(TCO 2) If an effective price ceiling is placed on hamburgers then

(TCO 2) An increase in demand for oil along with a simultaneous increase in supply of oil will

(TCO 2) For most products, purchases tend to fall with decreases in buyers’ incomes. Such products are known as

(TCO 2) If the price-elasticity coefficient for a good is .75, the demand for that good is described as

(TCO 2) When the price of movie tickets in a certain town was reduced, the movie-theaters’ revenues did not change. This suggests that the demand for movie tickets in that town has a price-elasticity coefficient of

(TCO 2) The price elasticity of demand increases with the length of the period considered because

(TCO 2) To economists the main differences between “the short run” and “the long run” are that

(TCO 2) When universities announce a large tuition increase and follow it with an announcement that more financial aid will be available, they are assuming that students who pay full tuition

(TCO 3) Cash expenditures a firm makes to pay for resources are called

(TCO 3) If a firm’s revenues just cover all its opportunity costs, then

(TCO 3) In the short run

(TCO 3) Variable costs are

(TCO 3) Marginal cost can be defined as the

(TCO 3) If the price of a fixed factor of production increases by 50 percent, what effect would this have on the marginal-cost schedule facing a firm?

(TCO 3) Which market model assumes the least number of firms in an industry?

(TCO 3) In which two market models would advertising be used most often?

(TCO 3) The steel and automobile industries would be examples of which market model?

(TCO 3) The demand curve faced by a purely competitive firm

(TCO 3) Let us suppose Harry’s, a local supplier of chili and pizza, has the following revenue-and-cost structure:

(TCO 3) A firm should increase the quantity of output as long as its

(TCO 3) In pure competition, each extra unit of output that a firm sells will yield a marginal revenue that is

(TCO 3) Which phrase would be most characteristic of pure monopoly?

(TCO 3) Natural monopolies result from

(TCO 3) The nondiscriminating pure monopolist must decrease price on all units of a product sold in order to sell more units. This explains why

(TCO 3) Which would definitely not be an example of price discrimination?

(TCO 3) In which industry is monopolistic competition most likely to be found?

(TCO 3) Assume that in a monopolistically competitive industry, firms are earning economic profit. This situation will

(TCO 3) In an oligopolistic market there are

(TCO 3) A low concentration ratio means that

(TCO 3) A major reason that firms form a cartel is to

(TCO 1) Money is not an economic resource because

(TCO 1) Refer to the diagram which refers to the Circular Flow Model in Chapter 2. Arrows (1) and (3) are associated with

(TCO 2) Refer to the diagram. An increase in quantity demanded is depicted by a

(TCO 2) Refer to the information and assume the stadium capacity is 5,000. If the Mudhens’ management wanted a full house for the game, it would

(TCO 2) Which type of goods is most adversely affected by recessions?

(TCO 3) In the figure, Curves 1, 2, 3, and 4 represent the

(TCO 1) Refer to the diagram. The combination of computers and bicycles shown by Point G is

(TCO 3) Assume that the owners of the only gambling casino in Wisconsin spend large sums of money lobbying state government officials to protect their gambling monopoly. Economists refer to these expenditures as

(TCO 3) a.) Do you agree or disagree with the statement that: “A monopolist always charges the highest possible price.”? Explain. b.) Why can’t an individual firm raise its price by reducing output or lower its price to increase sales volume in a purely competitive market?

(TCO 2) What effect should each of the following have on the demand for gasoline in a competitive market? State what happens to demand. Explain your reasoning in each case and relate it to a demand determinant

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