Practice Midterm 1

Practice Midterm 1 - Midterm 1, Fall 2007 Multiple Choice...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. The phenomenon of scarcity stems from the fact that a. most economies’ production methods are not very good. b. in most economies, wealthy people consume disproportionate quantities of goods and ser- vices. c. governments restricts production of too many goods and services. d. resources are limited. ____ 2. Economists use the word equity to describe a situation in which a. each member of society has the same income. b. each member of society has access to abundant quantities of goods and services, regard- less of his or her income. c. society is getting the maximum benefits from its scarce resources. d. the benefits of society's resources are distributed fairly among society's members. ____ 3. The opportunity cost of going to college is a. the total spent on food, clothing, books, transportation, tuition, lodging, and other ex- penses. b. the value of the best opportunity a student gives up to attend college. c. zero for students who are fortunate enough to have all of their college expenses paid by someone else. d. zero, since a college education will allow a student to earn a larger income after gradu- ation. ____ 4. Trade between the United States and India a. benefits both the United States and India. b. is a losing proposition for the United States because India has cheaper labor. c. is a losing proposition for India because capital is much more abundant in the U.S. than in India. d. is a losing proposition for India because U.S. workers are more productive. ____ 5. In a market economy, who makes the decisions that guide most economic activity? a. firms only b. households only c. firms and households d. government ____ 6. When the "invisible hand" guides economic activity, prices of products reflect a. only the values that society places on those products. b. only the costs to society of producing those products. c. both the values that society places on those products and the costs to society of pro- ducing those products. d. none of the above; when the "invisible hand" guides economic activity, prices of products are set by the government in a manner that is thought to be "fair." ____ 7. In building economic models, economists often omit a. assumptions. b. theories. c. details. d. equations. ____ 8.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 10

Practice Midterm 1 - Midterm 1, Fall 2007 Multiple Choice...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online