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Ex1AS10 to Post - ECONOMICS 202 EXAM IA SPRING 2010 1 In...

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ECONOMICS 202 -- EXAM IA - SPRING 2010 1. In the circular flow diagram of the market economy the market in which land and capital are exchanged is the market where consumers are _____ and the businesses are _____. a. suppliers, suppliers; b. demanders, suppliers; c. suppliers, demanders; d. demanders, demanders, e. none above 2. The basic source of the economic problem is: a. pure command economies; b. law of demand; c. law of supply; d. marginal benefits being less than marginal costs; e. none above. 3. The way people organize to cope with the economic problem is: a. revealed in the law of demand; b. revealed in the law of supply; c. revealed in the law of increasing cost; d. called an economic system; e. none above. 4. The economic resource known as “capital” is composed of machines, tools, factories, stocks, bonds and other financial instruments. 5. Most economists say, “if we raise the minimum wage to $8, the rate of unemployment among young and inexperienced people will rise.” This is an example of a “normative” statement. 6. In the market environment that we labeled “competitive” we assume that producers are “price-takers” and consumers are “price-setters.” 7. Economics is said to fall into two categories of analysis: microeconomics and macroeconomics. This course, Economics 202, is a course in microeconomics. 8. A “scarce” good: a. could be an “inferior” good; b. could be a “normal” good; c. has an equilibrium price greater than zero; d. all above are correct; e. only b and c are correct. 9. The law of increasing cost is the reason for: a. the negatively sloping production possibility boundary b. the scarcity of resources. c. the assumption of rational self-interest. d. the bowed-out shape of the production possibility boundary e. both a and d. 10. The law of demand says the change in price, c.p., and the resulting change in quantity demanded are inversely related. ANSWER THE NEXT 3 QUESTIONS WITH REFERENCE TO THE FOLLOWING TABLE. This table reveals the benefits and costs of a Walmart store which is considering how many hours of a security service to hire to reduce shoplifting. T.C. = Total Costs; M.B. = Marginal Benefits. 11. The optimum number of hours is: a. 1; b. 2; c. 3; d. 4; e. 5.
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Ex1AS10 to Post - ECONOMICS 202 EXAM IA SPRING 2010 1 In...

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