Midterm 1 Spring 2006

# Midterm 1 Spring 2006 - Name(YOU KEEP MC Questions for...

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Name: ______________________ (YOU KEEP) MC Questions for Midterm Exam #1 Page 1 of 5 Instructions: This is a closed-book exam. You have 75 minutes to complete the exam. You must hand in the exam by 10:45. Use neither notes nor the text to assist in the preparation of your answers. The examination consists of two parts: 25 multiple-choice questions and one problem. You are to answer the multiple choice questions on the Scantron sheet. You are to answer the problem in the space provided. Good Luck! Multiple Choice Questions 1. The concept of scarcity as used by economists refers to a situation in which a. there is a shortage. b. available resources are not enough to satisfy the wants of the people. c. an item is available only in very small quantities. d. an item is very expensive. e. a resource is nonrenewable. 2. The logical implication of scarcity is that a. one will never be satisfied with what one has. b. as wealth increases, making tradeoffs becomes less necessary. . c. as wealth decreases, making tradeoffs becomes less necessary. d. choices must be made. e. resources need to be made unlimited. 3. Amy is thinking about going to the movies tonight to see Walk the Line. A movie ticket costs \$10 and she will have to cancel her dog-sitting job that pays \$30. The opportunity cost for Amy of going to the movie is a. \$0. b. \$10. c. \$20. d. \$30. e. \$40. 4. The supply curve equation P = 3 + 0.5* Q has a vertical intercept of ____ and a slope of _____? a. 3, 0.5 b. 0.5, 3 c. 3, -0.5 d. -0.5, 3 5. Suppose that every CD at Virgin Superstore is \$10 a piece. According to the Economic Way of Thinking, Ken will continue to buys CDs until the marginal benefit equals a. \$20. b. \$15. c. \$10. d. \$5. e. \$0.

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Page 2 of 5 6. The objective of the firm is to a. stay in business. b. sell as much as possible. c. earn as much revenue as possible.
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Midterm 1 Spring 2006 - Name(YOU KEEP MC Questions for...

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