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EXAM - 3 VERSIONS
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4.
5.
(TCO 1) The simple circular-flow model shows that workers, entrepreneurs, and the owners
of land and capital offer their services through
(TCO 1) Consumers express self-interest when they
(TCO 1) Which is not one of the five fundamental questions that an economy must deal with?
(TCO 1) The major "success indicator" for business managers in command economies like the
Soviet Union and China in the past was
11.
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18.
(TCO 2) You are the sales manager for a software company and have been informed that the
price elasticity of demand for your most popular software is less than 1. To increase total
21.
(TCO 2) When universities announce a large tuition increase and follow it with an
announcement that more financial aid will be available, they are assuming that students who
pay full tuition
(TCO 3) Suppose that you could prepare your own tax return in 15 hours, or you could hire a
tax specialist to prepare it for you in two hours. You value your time at $11 an hour. The tax
specialist will charge you $55 an hour. The opportunity cost of preparing your own tax return is
22.
23.
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26.
(TCO 3) If the price of a fixed factor of production increases by 50 percent, what effect would
this have on the marginal-cost schedule facing a firm?
(TCO 3) Mutual interdependence would tend to limit control over price in which market
model?
2.
3.
(TCO 3) Under which market model are the conditions of entry into the market easiest?
(TCO 3) The production of agricultural products such as wheat or corn would best be
7.
8.
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13.
(TCO 3) Assume that in a monopolistically competitive industry, firms are earning economic
profit. This situation will
14.
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(TCO 3) In which set of market models are there the most significant barriers to entry?
(TCO 1) The four factors of production are
18.
(TCO 1) Refer to the diagram below which is based on the Circular Flow Model in Chapter 2.
Arrows (1) and (2) represent
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24.
25.
(TCO 3) a.) A pure monopolist determines that at the current level of output the marginal
cost of production is $2, average variable costs are $2.75, and average total costs are $2.95. The
marginal revenue is $2.75. What would you recommend that the monopolist do to maximize
profits? b.) Why might a business owner keep their business open but let it deteriorate, rather
(TCO 1) As a student of economics, when you speak of scarcity, you are referring to the ability
of society to
2.
3.
(TCO 1) The idea in economics that "there is no free lunch" means that
(TCO 1) (TCO 1) The law of increasing opportunity costs indicates that
4.
5.
(TCO 1) A tradeoff exists between two economic goals, X and Y. This tradeoff means that
(TCO 1) Which would not be considered as a capital resource of a business by an economist?
6.
7.
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10.
(TCO 1) The major "success indicator" for business managers in command economies like the
Soviet Union and China in the past was
11.
12.
13.
14.
(TCO 2) The demand for Cheerios cereal is more price-elastic than the demand for cereals as
a whole. This is best explained by the fact that
19.
(TCO 2) To economists the main differences between "the short run" and "the long run" are
that
20.
(TCO 2) Airlines charge business travelers more than leisure travelers because there is a
more
21.
(TCO 3) Suppose that you could prepare your own tax return in 15 hours, or you could hire a
tax specialist to prepare it for you in two hours. You value your time at $11 an hour. The tax
specialist will charge you $55 an hour. The opportunity cost of preparing your own tax return is
22.
23.
24.
25.
average fixed costs are $3. The total costs per year for the firm are:
26.
(TCO 3) If the price of a fixed factor of production increases by 50 percent, what effect would
this have on the marginal-cost schedule facing a firm?
27.
(TCO 3) Which market model assumes the least number of firms in an industry?
28.
29.
(TCO 3) Local electric or gas utility companies mostly operate in which market model?
(TCO 3) The fast-food restaurants would be an example of which market model?
30.
(TCO 3) Sam owns a firm that produces tomatoes in a purely competitive market. The firm's
demand curve is
31.
average variable cost is $2.20. Based on these data, the firm should
32.
(TCO 3) A firm should always continue to operate at a loss in the short run if
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35.
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39.
(TCO 3) Assume that in a monopolistically competitive industry, firms are earning economic
profit. This situation will
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41.
(TCO 2) Refer to the information and assume the stadium capacity is 5,000. If the Mudhens'
management charges $7 per ticket
47.
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50.
(TCO 2) What effect should each of the following have on the demand for gasoline in a
competitive market? State what happens to demand. Explain your reasoning in each case and
relate it to a demand determinant.