Unit 2

The economic term that describes the satisfaction that consumers gain from consuming goods and services is 

• want

• benefit

• utility

• pleasure

Which of the following are examples of goods as opposed to services?

• apple, car repair, pair of shoes

• apple, car, pair of shoes

• apple, car, shoe shine

• movie theater ticket, car, pair of shoes

As a consumer consumes more of a good or service, the additional satisfaction of consuming the additional units goes down. This is called the law of 

• diminishing utility.

• diminishing returns.

• diminishing wants.

• diminishing requirements.

Consumer decisions are made by which of the following processes?

• conflicted decision process

• Illogical decision process

• all or nothing decision process

• marginal decision process

A worker's skills knowledge and experience are known as

• factory capital

• human capital

• producer capital

• consumer capital

What is measured by how many goods and services a worker produces in an hour?

• productivity

• gross domestic product

• standard of living

• corporate profits

 If Romeo’s Racket Ball business has sales for the month of 10,000 racketballs and a racketball sells for $15, what is  Romeo’s  accounting profits per month given the explicit costs below? 

Rent of $10,000

Utilities of $1,000

Labor costs of $2.50 per racketball

Material costs of $2.50 per racketball

Executive salaries of $39,000

• $25,000

• $50,000

• $100,000

• 0

Total revenue minus explicit and implicit costs equals which of the following?

• economic profit

• accounting profit

• excess profits

• foregone profits

Which of the following are characteristics of competitive markets?

• large number of buyers and sellers, homogenous products, barriers to entry

• large number of buyers and sellers, homogenous products, ease of entry

• large number of buyers and sellers, differentiated products, ease of entry

• large number of buyers with few sellers, homogenous products, ease of entry

In the circular flow model, firms are buyers in which market and sellers in which market?

• firms sell in the product market and buy in the product market

• firms sell in the resource market and buy in the product market

• firms sell in the product market and buy in the resource market

• firms sell in the product market and buy in the product market