ECON 312 Week 4 Midterm Exam

ECON 312 Week 4 Midterm Exam

ECON312 Principles of Economics - DeVry

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

2. Question: (TCO 1) The idea in economics that "there is no free lunch" means that

3. Question: (TCO 1)(TCO 1) The law of increasing opportunity costs indicates that

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

5. Question: (TCO 1) Which would not be considered as a capital resource of a business by an economist?

6. Question: (TCO 1) The economy of Germany would best be classified as:

7. Question: (TCO 1) Markets in which firms sell their output of goods and services are called

8. Question: (TCO 1) Laissez-faire capitalism is characterized by

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

10. Question: (TCO 1) The major "success indicator" for business managers in command economies like the Soviet Union and China in the past was

11. Question: (TCO 2) An increase in demand means that

12. Question: (TCO 2) At the point where the demand and supply curves intersect

13. Question: (TCO 2) Black markets are associated with

14. Question: (TCO 2) A headline reads "Lumber Prices Up Sharply."  In a competitive market, this situation would lead to a(n)

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

16. Question: (TCO 2) When the price of a product is increased 10 percent, the quantity demanded decreases 15 percent.  In this range of prices, demand for this product is

17. Question: (TCO 2) Total revenue falls as the price of a good is raised, if the demand for the good is

18. Question: (TCO 2) The demand for Cheerios cereal is more price-elastic than the demand for cereals as a whole. This is best explained by the fact that

19. Question: (TCO 2) To economists the main differences between "the short run" and "the long run" are that

20. Question: (TCO 2) Airlines charge business travelers more than leisure travelers because there is a more

21. Question: (TCO 3) Suppose that you could prepare your own tax return in 15 hours, or you could hire a tax specialist to prepare it for you in two hours.  You value your time at $11 an hour.  The tax specialist will charge you $55 an hour.  The opportunity cost of preparing your own tax return is

22. Question: (TCO 3) Economic profits are equal to

23. Question: (TCO 3) The main difference between the short run and the long run is that

24. Question: (TCO 3) Fixed costs are those costs which are

25. Question: (TCO 3) At an output of 20,000 units per year, a firm's variable costs are $80,000 and its average fixed costs are $3.  The total costs per year for the firm are:

26. Question: (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?

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

2. Question: (TCO 3) Local electric or gas utility companies mostly operate in which market model?

3. Question: (TCO 3) The fast-food restaurants would be an example of which market model?

4. Question: (TCO 3) Sam owns a firm that produces tomatoes in a purely competitive market.  The firm's demand curve is

5. Question: (TCO 3) T-Shirt Enterprises is selling in a purely competitive market.  It is producing 3,000 units, selling them for $2 each.  At this level of output, the average total cost is $2.50 and the average variable cost is $2.20.  Based on these data, the firm should

6. Question: (TCO 3) A firm should always continue to operate at a loss in the short run if

7. Question: (TCO 3) The short-run supply curve for a competitive firm is the

8. Question: (TCO 3) One feature of pure monopoly is that the monopolist is

9. Question: (TCO 3) Barriers to entry

10. Question: (TCO 3) The demand curve confronting a nondiscriminating, pure monopolist is

11. Question: (TCO 3) Which is the best example of price discrimination?

12. Question: (TCO 3) Monopolistic competition is characterized by firms

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

14. Question: (TCO 3) A unique feature of an oligopolistic industry is

15. Question: (TCO 3) You are told that the four-firm concentration ratio in an industry is 20.  Based on this information you can conclude that

16. Question: (TCO 3) A major reason that firms form a cartel is to

17. Question: (TCO 1) Money is not an economic resource because

18. Question: (TCO 1) Refer to the diagram which is based on the Circular Flow Model in Chapter 2.  Arrows (3) and (4) represent
19. Question: (TCO 2) Refer to the diagram.  A decrease in demand is depicted by a

20. Question: (TCO 2) Refer to the information and assume the stadium capacity is 5,000.  If the Mudhens' management charges $7 per ticket

21. Question: (TCO 2) Which type of goods is most adversely affected by recessions?

22. Question: (TCO 3) The following cost data are for a firm in the short run:.....What is the .....?

23. Question: (TCO 1) Refer to the diagram.  Points A, B, C, D, and E show

24. Question: (TCO 3) Any activity designed to transfer income or wealth to a particular individual or firm at society's expense is called

25. Question: (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?

26. Question: (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.