Microeconomics Exam 1 Review Questions
1. Which of the following is not one of the three central coordination problems of the economy
given in the book?
c. For whom
2. Scarcity exits because:
a. Individuals cant solve the three c
Exam 1 Practice Questions 5
1. The tax revenue of federal, state, and local governments have different sources, in that the
federal government relies primarily on:
a. Income taxes; state and local governments rely to a greater extent on sales and
Exam 1 Practice Questions 3
1. The law of supply states than, other things constant, there is:
a. An inverse relation between prices and the quantity supplied.
b. An inverse relation between price and supply.
c. A direct relation between prices and the qu
Exam 1 Practice Questions 2
1. Which of the following is not one of the three principal components of a socialist
a. Government ownership of the means of production.
b. Workers directed by a government planning board as to where they will work an
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1. Refer to the graph above. If market price is currently $3.00 per unit, this perfectly competitive
will maximize prot by produc
Exam 1 Practice Questions 4
1. Which statement best summarizes the theory of the invisible hand?
a. Government policies direct peoples selfish desires (tempered by social and economic
forces) to the common good.
b. Culture norms direct peoples selfish des
Exam 1 Practice Questions
1. A resource is said to have a comparative advantage if:
a. It is better suited to the production of one good than to the production of an
b. It is equally suited to the production of all goods.
c. Its suitabil
Exam 1 Practice Questions 6
1. Marginal analysis suggests that you will engage in more of an activity if the:
a. Total benefit of the activity is less than the total cost
b. Additional benefit from the activity exceeds the additional cost
c. Total benefit