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Question

Correct
1.50pointsout

Thursday,July28,2016,1:05PM
Finished
Thursday,July28,2016,1:29PM
23mins53secs
25.50outof30.00(85%)

Inacompetitivemarketeconomyfirmswillselecttheleastcostproductiontechnique
because:
Selectone:
a.suchchoiceswillresultinthefullemploymentofavailableresources.

of1.50

b.todosowillmaximizethefirms'profits.
c.thiswillpreventnewfirmsfromenteringtheindustry.
d."dollarvoting"byconsumersmandatessuchachoice.

Thecorrectansweris:todosowillmaximizethefirms'profits.

Question

Correct

Whichofthefollowingisadistinguishingfeatureofamarketsystem?
Selectone:
a.publicownershipofallcapital.

1.50pointsout
of1.50

b.centralplanning.
c.widespreadprivateownershipofcapital.
d.acircularflowofgoods,resources,andmoney.

Thecorrectansweris:widespreadprivateownershipofcapital.

Question

Correct

Innovationlaggedinthecentrallyplannedeconomiesbecause:
Selectone:
a.therewastoomuchdomesticbusinesscompetition.

1.50pointsout
of1.50

b.therewastoomuchcompetitionfromforeignfirms.
c.enterprisesresistedinnovationinfearthattheirproductiontargets
wouldberaised.
d.exportshadtoequalimportsfortheplantowork.

Thecorrectansweris:enterprisesresistedinnovationinfearthattheirproduction
targetswouldberaised.

Question

Correct

Fromsociety'spointofviewtheeconomicfunctionofprofitsandlossesisto:
Selectone:
a.promotetheequaldistributionofrealassetsandwealth.

1.50pointsout
of1.50

b.achievefullemploymentandpricelevelstability.
c.contributetoamoreequaldistributionofincome.
d.reallocateresourcesfromlessdesiredtomoredesireduses.

Thecorrectansweris:reallocateresourcesfromlessdesiredtomoredesireduses.

Question

Correct
1.50pointsout

(ConsiderThis)In1975McDonald'sintroduceditsEggMcMuffinbreakfastsandwich,
whichremainspopularandprofitabletoday.Thislongevityillustratestheideaof:
Selectone:
a.opportunitycost.

of1.50

b.upslopingsupply.
c.consumersovereignty.
d.specialization.

Thecorrectansweris:consumersovereignty.

Question

Correct
1.50pointsout

Thedollarvotesofconsumersultimatelydeterminethecompositionofoutputand
theallocationofresourcesinamarketeconomy.Thisstatementbestdescribesthe
conceptof:
Selectone:

of1.50

a.deriveddemand.
b.consumersovereignty.
c.theinvisiblehand.
d.marketfailure.

Thecorrectansweris:consumersovereignty.

Question

Correct
1.50pointsout

of1.50

Refertotheabovediagram.Flow(4)represents:
Selectone:
a.wage,rent,interest,andprofitincome.
b.land,labor,capital,andentrepreneurialability.
c.goodsandservices.
d.consumerexpenditures.

Thecorrectansweris:consumerexpenditures.

Question

Incorrect

ThefailureofSovietcentralplanningwasreflectedin:
Selectone:
a.adeclininggrowthrate.

0.00pointsout

b.poorqualitygoods.

of1.50

c.thefailuretoprovidepromisedconsumergoods.
d.allofthese.

Thecorrectansweris:allofthese.

Question

Correct

Answerthenextquestion(s)onthebasisofthefollowinginformation:Suppose30
unitsofproductAcanbeproducedbyemployingjustlaborandcapitalinthefour
waysshownbelow.Assumethepricesoflaborandcapitalare$2and$3
respectively.

1.50pointsout
of1.50

Refertotheaboveinformation.Whichtechniqueiseconomicallymostefficientin
producingA?
Selectone:
a.I
b.II
c.III
d.IV

Thecorrectansweris:IV

Question

10

Incorrect

Aneconomicsystem:
Selectone:
a.requiresagroupingofprivatemarketslinkedtooneanother.

0.00pointsout
of1.50

b.isaparticularsetofinstitutionalarrangementsandacoordinating
mechanismusedtorespondtotheeconomizingproblem.
c.requiressomesortofcentralizedauthority(suchasgovernment)to
coordinateeconomicactivity.
d.isaplanorschemethatallowsafirmtomakemoneyatsomeother
firm'sexpense.

Thecorrectansweris:isaparticularsetofinstitutionalarrangementsanda
coordinatingmechanismusedtorespondtotheeconomizingproblem.

Question

11

Correct

Theeconomicfunctionofprofitsandlossesisto:
Selectone:
a.bringaboutamoreequaldistributionofincome.

1.50pointsout
of1.50

b.signalthatresourcesshouldbereallocated.
c.eliminatesmallfirmsandreducecompetition.
d.tellgovernmentwhichindustriesneedtobesubsidized.

Thecorrectansweris:signalthatresourcesshouldbereallocated.

Question

12

Incorrect
0.00pointsout
of1.50

Supposethatanindividualseesatremendousopportunitytoproduceandsellanew
product,butdismissestheideabecausethereisnowaytoexploitthisopportunityfor
personalgain.Thissituationbestidentifiesthe:
Selectone:
a.coordinationproblemundercommunistcentralplanning.
b.selfsufficiencydilemmaundercommunism.
c.asymmetricinformationproblemundercommunism.
d.incentiveproblemundercommunistcentralplanning.

Thecorrectansweris:incentiveproblemundercommunistcentralplanning.

Question

13

Correct

Whichofthefollowingisadistinguishingfeatureofacommandsystem?
Selectone:
a.privateownershipofallcapital.

1.50pointsout
of1.50

b.centralplanning.
c.heavyrelianceonmarkets.
d.widespreaddispersionofeconomicpower.

Thecorrectansweris:centralplanning.

Question

14

Correct

Barter:
Selectone:
a.isthemajormeansofexchangeincentrallyplannedeconomies.

1.50pointsout
of1.50

b.accountsforover30percentofthedollarvolumeofallexchangeinthe
U.S.economy.
c.entailstheexchangeofgoodsforgoods.
d.isusedtocircumventtheproblemofalackofcoincidenceofwants
amongpotentialbuyersandsellers.

Thecorrectansweris:entailstheexchangeofgoodsforgoods.

Question

15

Correct

Whichofthefollowingisalimitationofthesimplecircularflowmodel?
Selectone:
a.productmarketsareignored.

1.50pointsout
of1.50

b.resourcemarketsareignored.
c.thedeterminationofproductandresourcepricesisnotexplained.
d.householdsareincluded,butnotbusinesses.

Thecorrectansweris:thedeterminationofproductandresourcepricesisnot
explained.

Question

16

Correct

Theinvisiblehandconceptsuggeststhat:
Selectone:
a.changesinproductdemandsareonlyrandomlyreflectedinchangesin

1.50pointsout

thedemandsforresources.

of1.50

b.profitmaximizationisinconsistentwithanefficientallocationof
resources.
c.governmentactionisnecessarytocorrectformarketfailures.
d.whenfirmsmaximizetheirprofits,society'soutputwillalsobe
maximized.

Thecorrectansweris:whenfirmsmaximizetheirprofits,society'soutputwillalsobe
maximized.

Question

17

Correct

TheFrenchterm"laissezfaire"means:
Selectone:
a."thereisnofreelunch."

1.50pointsout
of1.50

b."letitbe."
c."circularflow."
d."publicownership."

Thecorrectansweris:"letitbe."

Question

18

Correct
1.50pointsout

of1.50

Refertotheabovediagram.Flow(3)represents:
Selectone:
a.wage,rent,interest,andprofitincome.
b.land,labor,capital,andentrepreneurialability.
c.goodsandservices.
d.consumerexpenditures.

Thecorrectansweris:goodsandservices.

Question

19

Correct
1.50pointsout

EnterprisemanagersandworkersintheSovietUnionoftenresistedinnovationsin
productionmethodsbecause:
Selectone:
a.productiontargetswereoftenincreasedwheninnovationoccurred.

of1.50

b.therewasachronicshortageofcomputers.
c.workerscouldnotbereallocatedgeographically.
d.innovationsordinarilyincreaseddependenceonworldmarkets.

Thecorrectansweris:productiontargetswereoftenincreasedwheninnovation
occurred.

Question

20

Correct

Thepursuitofselfinterest:
Selectone:
a.ishighlydetrimentaltothemarketsystem.

1.50pointsout
of1.50

b.meansthesameas"selfishness."
c.isreflectedinthebehavioroffirms,butnotinthebehaviorof
consumers.
d.givesdirectiontothemarketsystem.

Thecorrectansweris:givesdirectiontothemarketsystem.