review exercise 1_sol - ECO 201 Review Exercise Ch 1 2 3...

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ECO 201 Review Exercise: Ch 1, 2 , 3 and 4 Note: Don’t forget to review HW1, HW2 and in-class exercises 5.Which of the following questions is not answered by the decisions that every society must make? a. What determines consumer preferences? b. What goods will be produced? c. Who will produce the goods? d. Who will consume the goods? ANS: A DIF: 2 REF: 1-0 TOP: Economies MSC: Interpretive 6. The overriding reason as to why households and societies face many decisions is that a. resources are scarce. b. goods and services are not scarce. c. incomes fluctuate with business cycles. d. people, by nature, tend to disagree. ANS: A DIF: 2 REF: 1-0 TOP: Scarcity MSC: Interpretive 7. The phenomenon of scarcity stems from the fact that 22.When society requires that firms reduce pollution, there is 26.Efficiency means that
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40.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? a. Yes, because making tables is profitable. b. No, because she may not be able to sell the additional tables. c. It depends on the marginal cost of producing more tables and the marginal revenue she will earn from selling more tables. d. It depends on the average cost of producing more tables and the average revenue she will earn from selling more tables. ANS: C DIF: 2 REF: 1-1 TOP: Marginal changes MSC: Applicative
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