Survey of Economics Midterm Questions
A person who seeks to earn profits by finding ways to organize factors of production is called a(n):
entrepreneur
Distinguish between microeconomics and macroeconomics
Microeconomics- study of economics at an individual or group level Macroeconomics- focuses on issues that effect the economy as a whole
T/F: A characteristic of perfect competition is that buyers know the prices that sellers are asking but sellers do not necessarily know the prices that buyers are offering.
False
T/F: A linear supply curve has a price elasticity coefficient equal to 1.
False
T/F: If a decrease in the price of a good causes an increase in total revenue, the demand for the the good is price inelastic
False
T/F: If the MC of an activity exceeds the MB, the activity should be increased.
False
T/F: Price changes for complements and substitutes have the same effect on demand.
False
T/F: Profit-maximizing firms seek to maximize output.
False
T/F: Technology is a demand shifter.
False
T/F: Total cost is constant because fixed cost is constant.
False
T/F: There can be no shortages or surpluses at the equilibrium price.
True
T/F: Consumer preferences are a demand shifter.
True
T/F: Firms are organizations that produce goods and services.
True
T/F: Free riders consume a public good without paying for it.
True
T/F: Perfect competition is a model of the market that assumes a large number of buyers and sellers engaged in the purchases and sale of identical goods.
True
T/F: Profit for the firm is maximized when the firm produces the level of output where MR=MC
True
T/F: The failure to achieve an efficient allocation of resources is called market failure.
True
T/F: The slope of a line is another method of measuring elasticity.
True
The bulk of the nation's output is produced by:
corporations
Making choices that are expected to achieve the highest possible value for some objective is termed:
maximizing
Economics is a:
social science that deals with making choices among alternatives
The basic concern of economics is to:
study the choices that people make
