Economics Midterm Exam Review B

The governments of some nations answer the question of what to produce to

• enhance free trade

• control the economy

• satisfy consumer wants

• improve efficiency

An example of real capital is

• a college education

• a warehouse

• job training

• self-improvement courses

Using a PPC can help to increase a company's

• efficiency

• underutilization

• incentives

• costs

A macroeconomist would be interested in

• general rise of prices

• decline of cheese prices

• fluctuation of oil prices

• sharp rise of coffee prices

The way a society uses scarce resources to satisfy its people's unlimited wants is called an economic

• system

• utility

• incentive

• grid

In economic terms, property means

• everything an individual owns and the labor s/he provides

• everything an individual owns but not the labor s/he provides

• some things an individual owns and the labor s/he provides

• some things an individual owns but not the labor s/he provides

With voluntary exchange, a buyer and seller agree to business together

• only for the benefit of the seller

• only for he benefit of the buyer

• for the mutual benefit of both

• for the benefit of neither

In a market economy, the real power in the market place is held by the

• producer

• seller

• government

• consumer

A circular flow model shows how

• all interactions occur in a market economy

• some interactions occur in a market economy

• all interactions occur in a traditional economy

• some interactions occur in a traditional economy

An advantage of a pure market economy is that it

• has mechanisms for providing public goods

• allows local communities to set their own economic development

• provides security to those who are not economically productive

• prevents unequal distribution of wealth