Test #1

Test #1 - 1 Which of the following contributed to the...

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1. Which of the following contributed to the downfall of the Soviet Union in 1991? a. An inability to produce low-cost consumer goods that households wanted. b. A lack of high-quality goods and services. c. Public dissatisfaction with low living standards and political repression. d. All of these reasons contributed to the downfall of the Soviet Union. 2. Adam Smith's behavioral assumption about humans was that: a. people typically act irrationally. b. people typically act randomly. c. people are consistently greedy. d. people usually act in a rational, self-interested way. 3. A worker is hired in a: a. government market. b. goods and services market. c. black market. d. factor market. 4. The production possibilities frontier shows: a. the various products that can be produced now and in the future. b. what people want to have produced in a particular time period. c. what an equitable distribution of products among citizens would be. d. attainable combinations of two products that may be produced in a particular time period with available resources. 5. According to a production possibility model the production of more physical and human capital implies: a. future economic growth is enhanced. b. fewer goods will be produced for consumption today. c. future production possibilities frontiers will be shifted outward. d. all of the above. 6. What does the adjective "marginal" mean in economics? a. The edge of a market b. Additional or extra c. Secondary d. Illegal 7. Which of the following is a positive economic statement? a. The government should close income tax loopholes. b. U.S. firms should not be allowed to practice outsourcing. c. If the price of gasoline rises, a smaller quantity of it will be bought. d. Everyone should live at the same standard of living. 8. What explains the efficiency of markets? a. Markets promote equal standards of living. b. The government staying out of the marketplace. c. Markets always result in equity. d. Markets promote competition and voluntary exchange. 9. Households: a. sell resources in the factor market. b. sell goods in the product market. c. purchase resources in the factor market. d. have no influence on the circular flow in a market economy.
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10. The principle of opportunity cost is that: a. the economic cost of using a factor of production is the alternative use of that factor that is given up. b. the cost of production varies depending on the opportunity for technological application. c. taking advantage of investment opportunities involves costs. d. in a market economy, taking advantage of profitable opportunities involves some money cost. 11. If the marginal costs of a TV are $200, the firm should produce and sell this TV: a. until marginal benefits just equal $200. b. when marginal benefits are rising above $200.
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This note was uploaded on 05/18/2008 for the course ECO 2023 taught by Professor Sabet during the Spring '08 term at FIU.

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Test #1 - 1 Which of the following contributed to the...

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