Old Exams (Ec 1)

Old Exams (Ec 1) - ECON 1 OLD EXAMS Midterm #1 (Fall 2007)...

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ECON 1 OLD EXAMS Midterm #1 (Fall 2007) Multiple Choice {Circle letter of best answer} 1. The fact that wants cannot be fully satisfied with available resources reflects the definition of: a) incentives. b) scarcity. c) the output-inflation tradeoff. d) for whom to produce. 2. Studying the effects choices have on the national economy is part of: a) scarcity. b) microeconomics. c) macroeconomics. d) global science. 3. Which of these is a basic economic question answered by every economic system? a) What goods and services are produced? b) Why are goods and services produced? c) Where are goods and services produced? d) Who produces goods and services? 4. Which factor of production earns the most income (in our economy)? a) Land. b) Labor. c) Capital. d) Entrepreneurship. 5. Choices made in the pursuit of self interest ____ the general public welfare. a) always further b) sometimes further c) never further d) are not comparable to choices made in pursuit of 6. The choice about how much to save: a) has no opportunity cost because saving means more future consumption. b) has the opportunity cost of higher future consumption. c) trades off current consumption for future consumption. d) puts the general public interest at odds with self interest. 7. When the government chooses to commit resources to build a dam, those resources are no longer available to build a highway. This choice illustrates the concept of: a) a market. b) macroeconomics. c) opportunity cost. d) marginal benefit. 8. To make a choice on the margin, an individual: a) ignores any opportunity cost if the marginal benefit from the action is high enough. b) will choose to use his/her scarce resources only if there is a very large total benefit from doing so. c) compares the marginal cost of the choice to the marginal benefit. d) makes the choice with the smallest opportunity cost.
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Ec 1 OLD EXAMS p. 2 9. A positive statement is: a) about what ought to be or should have been. b) about what is, was, or will be. c) always true. d) never relies upon the ceteris paribus clause. 10. The Latin term ceteris paribus means: a) “false until proven true.” b) “other things the same.” c) “after this, then because of this.” d) “not correct, even though logical.” 11. Which of the following is a positive statement? a) The government must lower the price of a pizza so that more students can afford it. b) The best level of taxation is zero percent because then people get to keep everything they earn. c) My econ class should last for two terms because it is my favorite class. d) An increase in college tuition will lead more students to apply to college. 12. An economic model includes: a) only normative statements. b)
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Old Exams (Ec 1) - ECON 1 OLD EXAMS Midterm #1 (Fall 2007)...

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