chapter 01.rtf - Exam Name MULTIPLE CHOICE Choose the one...

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Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) How are the fundamental economic decisions determined in a centrally planned economy? 1) _______ A) these decisions are made by the country's elders who have had much experience in answering these questions B) the United Nations decides C) the government decides D) individuals, firms, and the government interact in a market to make these economic decisions 2) Selling tickets to graduation ceremonies has long been a tradition among students at institutions that limit the number of guests. Suppose your classmate, Heidi purchased two tickets for US$40 each, from a student who got them for free. Is this transaction economically efficient? 2) _______ A) No, Heidi paid too much for the tickets. B) No, people should never be allowed to sell items they received for free. C) Yes, it was a voluntary exchange that benefited both parties. D) Yes, it is efficient only from the perspective of the seller and not from the perspective of the buyer. 3) Consider the following economic agents a. the government b. consumers c. producers Who, in a modern mixed economy, decides what goods and services will be produced with the scarce resources available in that economy? 3) _______ A)
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producers B) the government, consumers and producers C) consumers D) consumers and producers E) the government 4) Human capital refers to 4) _______ A) the accumulated skills and training workers have. B) the wealth people have. C) the machines workers have to work with. D) the money people have. 5) When goods and services are produced at the lowest possible cost, ________ occurs. 5) _______ A) productive efficiency B) equity C) allocative efficiency D) efficient central planning 6) If a straight line passes through the point x = 14 and y = 3 and also through the point x = 4 and y = 10, the slope of this line is
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6) _______ A) negative 11 divided by 6. B) negative seven tenths. C) 6 divided by 11. D) seven tenths. 7) The term "market" in economics refers to 7) _______ A) an organization that sells goods and services. B) a legal institution where exchange can take place. C) a group of buyers and sellers of a product and the arrangement by which they come together to trade. D) a place where money changes hands. 8) If, per child, a woman can get up to 48 months of pension benefits and is guaranteed a maternity allowance two months before and after she gives birth, how will these benefits affect a woman's decision to have children? 8) _______ A) These incentives will have no effect on having children; the decision to have children is a social and psychological decision, not an economic decision. B) These incentives will encourage only women with high opportunity costs to have more children. C) These incentives will encourage women to have children and increase the birth rate.
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