ECON TUTORIAL #2

ECON TUTORIAL #2 - Summer 2003 MBA 501-01 Economics Survey...

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Summer 2003 MBA 501-01 Economics Survey Tong Tutorial #2 Part I. Multiple Choice Questions (One point each) Identify the letter of choice that best completes the statement or answers the question. 1. Normal profit is: A) a cost because any excess of total receipts over total costs will go to the businessperson. B) a cost because they represent payments made for the resources which the businessperson owns and supplies in his or her own enterprise. C) not a cost because a firm can avoid this payment by temporarily closing down. D) not a cost of production because it need not be realized for a firm to retain entrepreneurial ability. 2. Which of the following best describes the "invisible hand" concept? A) The desires of resource suppliers and producers to further their own self-interest will automatically further the public interest. B) The nonsubstitutability of resources creates a conflict between private and public interests and calls for government intervention. C) The market system is the best system for overcoming the scarce resources-unlimited wants problem. D) Central direction by the government will improve resource allocation in a capitalistic economy. Use the following to answer question 3: 3. On the basis of the above information it can be said that: A) no coincidence of wants exists between any two states. B) a coincidence of wants exists between Michigan and Washington. C) a coincidence of wants exists between Texas and Washington. Page 1
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D) a coincidence of wants exists between Michigan and Texas. Use the following to answer question 4: 4. Refer to the above diagram. The movement from point b to point c suggests that more: A) private goods are being produced at the expense of fewer public goods. B) public goods are being produced at the expense of fewer private goods. C) public goods are being produced by employing currently idle resources. D) private goods are being produced by employing currently idle resources. Use the following to answer question 5: 5. Refer to the above diagram, in which solid arrows reflect real flows; broken arrows are monetary flows. Flow (1) might represent: A) corporate income tax payments. B) government provision of highways for truck transportation. C) business property tax payments. D) transfer payments to low-income families. Page 2
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Use the following to answer question 6: 6. Refer to the above diagrams. In which case would the coefficient of cross elasticity of demand be positive? A) A. B) B. C) C. D) D. Use the following to answer question 7: C B A S D 0 P r i c e Q u a n t i t y E Page 3
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7. Refer to the above diagram. A government price support program to aid farmers is best illustrated by: A) quantity E. B) price C. C) price A.
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This note was uploaded on 06/25/2008 for the course ECON 203 taught by Professor Zippper during the Fall '07 term at Lone Star College.

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ECON TUTORIAL #2 - Summer 2003 MBA 501-01 Economics Survey...

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