Study Guide for Final Exam

Study Guide for Final Exam - Prof. Tetteh Kofi...

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Prof. Tetteh Kofi Microeconomics 101/111 Microeconomics Final Exam Study Guide CH.1 74. The doctrine of laissez faire is based on the belief that: A) Markets are likely to do a better job of allocating resources than government directives . B) Government directives are likely to do a better job of allocating resources than markets. C) Government failure does not exist. D) Markets result in an unfair distribution of income. Answer: A Type: Basic Understanding Page: 13 73.The invisible hand refers to: A) Intervention in the economy by the government bureaucrats we do not see and over whom we have no control. B) Undiscovered natural resources. C) The allocation of resources by market forces. D) The person who has the responsibility to coordinate all the markets in a market economy. Answer: C Type: Basic Understanding Page: 13 CH.2 78.The term factors of production refers to: A) Only those goods that are produced and then used to produce other goods and services. B) Labor only. C) Any resource used to produce goods and services. D) Factories and machinery only. Answer: C Type: Definition Page: 34 Ch.3 26.The term opportunity costs refers to the: A) Value of all the options given up when a good or service is produced. B) Financial costs of all the factors of production used to produce a good or service. C) Amount of resources used to produce a good or service. D) Value of the best option given up when a good or service is produced. Answer: D Type: Definition Page: 48 28.The quantity of a good a consumer is willing to buy depends on: 1
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A) The price of a good. B) The consumer's income. C) The opportunity cost of purchasing the good. D) All of the above. Answer: D Type: Basic Understanding Page: 48 159.If a price ceiling results in a shortage: A) This is an example of market failure. B) The program is poorly designed because effective price ceilings produce surpluses. C) Buyers will be dissatisfied because they cannot purchase all they wish at a less-than-equilibrium price. D) It is not effective. Answer: C Type: Basic Understanding Page: 65 Ch.4 8.Market failure implies that the market mechanism: A) Leads the economy to a point outside the production-possibilities curve. B) Leads the economy to the wrong mix of output. C) Causes shortages or surpluses in the market. D) Causes government failure. Answer: B Type: Complex Understanding Page: 71 137.Which of the following occurs if government intervention forces the economy inside the production- possibilities curve? A) Market failure. B) Government failure. C) Externalities. D) Income inequality. Answer: B Type: Complex Understanding Page: 85 7.The optimal mix of output may not be produced by an economy because of the existence of: A) Inequity. B) Externalities. C) Public goods. D) All of the above. Answer: D
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Study Guide for Final Exam - Prof. Tetteh Kofi...

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