midterm1 - First Midterm Examination Economics 1101,...

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First Midterm Examination Economics 1101, Section 10 October 06, 2009 Name: TUiD: You have 1 hour 20 minutes to finish the exam. The exam consists of fifty (50) multiple-choice questions, each worth one (1) point for a total of 50 points. If you have any doubts about any question feel free to ask the examiner. This is a closed book, closed notes exam. Use of cell-phones, internet etc. is prohibited during the exam. Any person found cheating will earn an F grade for the course. 1. Economics is best defined as the study of how people, businesses, governments, and societies (a) choose abundance over scarcity. (b) make choices to cope with scarcity. (c) use their infinite resources. (d) attain wealth. 2. Opportunity cost means the (a) accounting cost minus the marginal cost. (b) highest-valued alternative forgone. (c) accounting cost minus the marginal benefit. (d) monetary costs of an activity. 3. The benefit that arises from an increase in an activity is called (a) the marginal benefit. (b) the marginal cost. (c) opportunity cost. (d) an incentive. 4. A positive statement is (a) about what ought to be. (b) about what is. (c) the result of a model’s normative assumptions. (d) valid only in the context of a model with simple assumptions. 1
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5. Marginal cost is the cost (a) that your activity imposes on someone else. (b) that arises from an increase in an activity. (c) of an activity that exceeds its benefit. (d) that arises from the secondary effects of an activity. 6. The production possibilities frontier represents (a) the maximum amount of labor and capital available to society. (b) combinations of goods and services among which consumers are indifferent. (c) the maximum levels of production that can be attained. (d) the maximum rate of growth of capital and labor in a country. 7. A production possibilities frontier illustrates the maximum amount of two different goods that can be produced if (a) society is using all its resources in the most efficient manner possible. (b) the prices of both goods are identical. (c) the prices of both goods are held constant. (d) low-skilled workers can be prevented from getting jobs. 8. A society that is on its production possibilities frontier is (a) under-utilizing its resources. (b) inefficient. (c) consuming too much output. (d) fully utilizing its productive resources. 9. In the production of goods and services, tradeoffs exist because (a) not all production is efficient. (b) society has only a limited amount of productive resources.
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midterm1 - First Midterm Examination Economics 1101,...

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