ECON 312 Midterm Exam
\n1. (TCO 1)\u00a0As a student of economics, when you speak of scarcity, you are referring to the ability of society to
\n2. (TCO 1)\u00a0The idea in economics that \u201cthere is no free lunch\u201d means that
\n3. (TCO 1)\u00a0(TCO 1) The law of increasing opportunity costs indicates that
\n4. (TCO 1)\u00a0A tradeoff exists between two economic goals, X and Y.\u00a0 This tradeoff means that
\n5. (TCO 1)\u00a0Which would not be considered as a capital resource of a business\u00a0by an economist?
\n6. (TCO 1)\u00a0The economy of Germany would best be classified as:
\n7. (TCO 1)\u00a0Markets in which firms sell their output of goods and services are called
\n8. (TCO 1)\u00a0Laissez-faire capitalism is characterized by
\n9. (TCO 1)\u00a0Which is\u00a0not\u00a0one of the five fundamental questions that an economy must deal with?
\n10. (TCO 1)\u00a0The major \u201csuccess indicator\u201d for business managers in command economies like the Soviet Union and China in the past was
\n11. (TCO 2)\u00a0An increase in demand means that
\n12. (TCO 2)\u00a0At the point where the demand and supply curves intersect
\n13. (TCO 2)\u00a0Black markets are associated with
\n14. (TCO 2)\u00a0A headline reads \u201cLumber Prices Up Sharply.\u201d\u00a0 In a competitive market, this situation would lead to a(n)
\n15. (TCO 2)\u00a0For most products, purchases tend to fall with decreases in buyers\u2019 incomes.\u00a0 Such products are known as
\n16. (TCO 2)\u00a0When the price of a product is increased 10 percent, the quantity demanded decreases 15 percent.\u00a0 In this range of prices, demand for this product is
\n17. (TCO 2)\u00a0Total revenue falls as the price of a good is raised, if the demand for the good is
\n18. (TCO 2)\u00a0The demand for Cheerios cereal is more price-elastic than the demand for cereals as a whole.\u00a0This is best explained by the fact that
\n19. (TCO 2)\u00a0To economists the main differences between \u201cthe short run\u201d and \u201cthe long run\u201d are that
\n20. (TCO 2)\u00a0Airlines charge business travelers more than leisure travelers because there is a more
\n21. (TCO 3)\u00a0Suppose 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.\u00a0 You value your time at $11 an hour.\u00a0 The tax specialist will charge you $55 an hour.\u00a0 The opportunity cost of preparing your own tax return is
\n22. (TCO 3)\u00a0Economic profits are equal to
\n23. (TCO 3)\u00a0The main difference between the short run and the long run is that
\n24. (TCO 3)\u00a0Fixed costs are those costs which are
\n25. (TCO 3)\u00a0At an output of 20,000 units per year, a firm\u2019s variable costs are $80,000 and its average fixed costs are $3.\u00a0 The total costs per year for the firm are:
\n26. (TCO 3)\u00a0If 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?
\n\u00a0
\nECON 312 Midterm Exam 2
\n1. (TCO 3)\u00a0Which market model assumes the least number of firms in an industry?
\n2. (TCO 3)\u00a0Local electric or gas utility companies mostly operate in which market model?
\n3. (TCO 3)\u00a0The fast-food restaurants would be an example of which market model?
\n4. (TCO 3)\u00a0Sam owns a firm that produces tomatoes in a purely competitive market. \u00a0The firm\u2019s demand curve is
\n5. (TCO 3)\u00a0T-Shirt Enterprises is selling in a purely competitive market.\u00a0 It is producing 3,000 units, selling them for $2 each.\u00a0 At this level of output, the average total cost is $2.50 and the average variable cost is $2.20.\u00a0 Based on these data, the firm should
\n6. (TCO 3)\u00a0A firm should always continue to operate at a loss in the short run if
\n7. (TCO 3)\u00a0The short-run supply curve for a competitive firm is the
\n8. (TCO 3)\u00a0One feature of pure monopoly is that the monopolist is
\n9. (TCO 3)\u00a0Barriers to entry
\n10. (TCO 3)\u00a0The demand curve confronting a non discriminating, pure monopolist is
\n11. (TCO 3)\u00a0Which is the best example of price discrimination?
\n12. (TCO 3)\u00a0Monopolistic competition is characterized by firms
\n13. (TCO 3)\u00a0Assume that in a monopolistically competitive industry, firms are earning economic profit.\u00a0 This situation will
\n14. (TCO 3)\u00a0A unique feature of an oligopolistic industry is
\n15. (TCO 3)\u00a0You are told that the four-firm concentration ratio in an industry is 20.\u00a0 Based on this information you can conclude that
\n16. (TCO 3)\u00a0A major reason that firms form a cartel is to
\n17. (TCO 1)\u00a0Money is not an economic resource because
\n18. (TCO 1)\u00a0Refer to the diagram which is based on the Circular Flow Model in Chapter 2.\u00a0 Arrows (3) and (4) represent
\n19. (TCO 2)\u00a0Refer to the diagram.\u00a0 A decrease in demand is depicted by a
\n20. (TCO 2)\u00a0Refer to the information and assume the stadium capacity is 5,000.\u00a0 If the Mudhens\u2019 management charges $7 per ticket
\n21. (TCO 2)\u00a0Which type of goods is most adversely affected by recessions?
\n22. (TCO 3)\u00a0The following cost data are for a firm in the short run:\u2026..What is the \u2026..?
\n23. (TCO 1)\u00a0Refer to the diagram.\u00a0 Points A, B, C, D, and E show
\n24. (TCO 3)\u00a0Any activity designed to transfer income or wealth to a particular individual or firm at society\u2019s expense is called
\n25. (TCO 3)\u00a0a.) Do you agree or disagree with the statement that: \u201cA monopolist always charges the highest possible price.\u201d?\u00a0 Explain.\u00a0 b.) Why can\u2019t an individual firm raise its price by reducing output or lower its price to increase sales volume in a purely competitive market?
\n26. (TCO 2)\u00a0What effect should each of the following have on the demand for gasoline in a competitive market?\u00a0 State what happens to demand.\u00a0 Explain your reasoning in each case and relate it to a demand determinant.
\n\u00a0
\nECON 312 Midterm Exam 3
\n1. (TCO 3) Mutual interdependence would tend to limit control over price in which market model?
\n2. (TCO 3) Under which market model are the conditions of entry into the market easiest?
\n3. (TCO 3) The production of agricultural products such as wheat or corn would best be described by which market model?
\n4. (TCO 3) The demand curve faced by a purely competitive firm
\n5. (TCO 3) A profit-maximizing firm in the short run will expand output
\n6.(TCO 3) A firm should increase the quantity of output as long as its
\n7. (TCO 3) The short-run supply curve for a competitive firm is the
\n8. (TCO 3) The classic example of a private, unregulated monopoly is
\n9. (TCO 3) Barriers to entry
\n10. (TCO 3) The demand curve confronting a nondiscriminating, pure monopolist is
\n11. (TCO 3) Which is the best example of price discrimination?
\n12. (TCO 3) In which industry is monopolistic competition most likely to be found?
\n13. (TCO 3) Assume that in a monopolistically competitive industry, firms are earning economic profit. This situation will
\n14. (TCO 3) A unique feature of an oligopolistic industry is
\n15. (TCO 3) A low concentration ratio means that
\n16. (TCO 3) In which set of market models are there the most significant barriers to entry?
\n17. (TCO 1) The four factors of production are
\n18. (TCO 1) Refer to the diagram below which is based on the Circular Flow Model in Chapter 2. Arrows (1) and (2) represent
\n19. (TCO 2) Refer to the diagram. An increase in quantity demanded is depicted by a
\n20. (TCO 2) Refer to the information and assume the stadium capacity is 5,000. The supply of seats for the game
\n21. (TCO 2) Which type of goods is most adversely affected by recessions?
\n22.(TCO 3) The following cost data are for a firm in the short run:
\n23. (TCO 1) Refer to the diagram. Points A, B, C, D, and E show
\n24. (TCO 3) Assume that the owners of the only gambling casino in Wisconsin spend large sums of money lobbying state government officials to protect their gambling monopoly. Economists refer to these expenditures as
\n25. (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 than shut it down? Will this profitability last?
\n26. (TCO 2) Evaluate how the following situations will affect the demand curve for iPods.
\n\u00a0
\nECON 312 Midterm Exam 4
\n(TCO 1) As a consequence of the condition of scarcity
\n(TCO 1) The opportunity cost of constructing a new public highway is the
\n(TCO 1) A nation can increase its production possibilities by
\n(TCO 1) Which expression is another way of saying \u201cmarginal benefit\u201d?
\n(TCO 1) The individual who brings together economic resources and assumes the risk of business ventures in a capitalist economy is called the
\n(TCO 1) The Soviet Union economy of the 1980s would best be classified as
\n(TCO 1) The simple circular-flow model shows that workers, entrepreneurs, and the owners of land and capital offer their services through
\n8. (TCO 1) Consumers express self-interest when they
\n9. (TCO 1) Which is\u00a0not\u00a0one of the five fundamental questions that an economy must deal with?
\n10. (TCO 1) The major \u201csuccess indicator\u201d for business managers in command economies like the Soviet Union and China in the past was
\n11. (TCO 2) An increase in demand means that
\n12. (TCO 2) At the point where the demand and supply curves intersect
\n13. (TCO 2) Black markets are associated with
\n14. (TCO 2) An increase in demand for oil along with a simultaneous increase in supply of oil will
\n15. (TCO 2) If Product Y is an inferior good, a decrease in consumer incomes will
\n16. (TCO 2) If the price elasticity of demand for a product is equal to 0.5, then a 10 percent decrease in price will increase quantity demanded by
\n17. (TCO 2) Total revenue falls as the price of a good is raised, if the demand for the good is
\n18. (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.\u00a0 To increase total revenues, you should:
\n19. (TCO 2) A state government wants to increase the taxes on cigarettes to increase tax revenue.\u00a0 This tax would only be effective in raising new tax revenues if the price elasticity of demand is
\n20. (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
\n21. (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.\u00a0 You value your time at $11 an hour.\u00a0 The tax specialist will charge you $55 an hour.\u00a0 The opportunity cost of preparing your own tax return is
\n22. (TCO 3) Economic profits are equal to
\n23. (TCO 3) The main difference between the short run and the long run is that
\n24. (TCO 3) The law of diminishing returns only applies in cases where
\n25. (TCO 3) Marginal cost can be defined as the
\n26. (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?<\/p>\n","protected":false},"excerpt":{"rendered":"
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