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PracticeMidterm3 - Economics 201(Section 025 Introduction...

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1 Economics 201 (Section 025) – Introduction to Microeconomics Practice Midterm Exam 3 Instructor: G. Lepori Instructions: fill in your name and student number both on this sheet and on the attached scantron sheet. For each question circle, fill in ONE bubble on the scantron sheet that you feel is the most appropriate solution to 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 services. c. governments restricts production of too many goods and services. d. resources are limited. ANS: D 2) The adage, "There is no such thing as a free lunch," is used to illustrate the principle that 3) A furniture maker currently produces 100 tables per week and sells them for a profit. She is considering expanding her operation in order to make more tables. Should she expand? 4) A rational decisionmaker
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2 5) In a market economy, economic activity is guided by a. the government. b. labor unions. c. central planners. d. self-interest and prices. ANS: D 6) The idea that only the government can organize economic activity in a way that promotes economic well-being for a country as a whole
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