-- EXAM 1A
-- FALL 2009
In the circular-flow diagram of a market economy, if we subtract the money-flow that connects
Consumers with the Product Market from the money- flow that connects the Consumers with the
Resource Market, the remainder is called:
In the product market of the circular-flow diagram of a market economy, producers and consumers
are _______ and ______ respectively.
a. demanders, suppliers;
b. suppliers, suppliers;
c. suppliers, demanders
d. demanders, demanders;
e. none above.
In the study of economics, the concepts of wants and needs have the same meaning.
In the circular flow-diagram of a market economy, answers to the For Whom, What and How
questions are determined primarily in the ________, ________, and ________ markets, respectively.
a. product, product, resource;
b. resource, resource, product;
c. product, resource, product;
d. resource, products, resource;
e. product, resource, resource.
A machine and a factory are examples of the economic resource called ________, whereas
knowledge is an example of the economic resource called ________.
a. land, capital;
b. capital, labor;
c. labor, land;
d. labor, capital;
e. labor, labor.
Macroeconomic is the study of decision making undertaken by individuals (or households) and by
economics are the study of the behavior of the economy as a whole, including such
phenomena as changes in unemployment, the general price level and national income.
The basic source of the Economic Problem is:
a. governments worldwide have tax rates that are too high.
b. government regulations make producers inefficient
d. union rules make both employers and employees inefficient.
e. none of the above.
“In the U.S. the highest one percent of earners pays nearly fifty-percent of all income taxes.”
quote is an example of _________ statement.
a. a positive;
b. a normative;
c. both a normative and a positive;
d. neither a normative nor a positive
One of your reading assignments was about Pollution.
This reinforced our class discussion and
conclusion that optimum level any activity which has both costs and benefits is where its:
a. total benefit is maximized;
b. marginal cost is minimized;
c. marginal benefit is maximized;
cost is minimized and its marginal benefit is maximized;
e. none of the above.
In a “competitive” market:
a. all consumers and all producers are price-takers.
b. all consumers and all small producers are price-takers, but large producers are price-setters.