Economics Midterm Review

The opportunity cost of a good is

• the time lost in finding it

• the quantity of other goods sacrificed to get another unit of that good

• the expenditure on the good

• the loss of interest in using savings

Economics is the study of

• production technology

• consumption decisions

• how society decides what, how, and for whom to produce

• the best way to run society

A resource is scarce if supply exceeds demand at zero price

• True

• False

In a free market __________ ___________

• governments intervene

• governments plan production

• governments interfere

• prices adjust to reconcile scarcity and desires

In the mixed economy

• economic problems are solved by the government and market

• economic decisions are made by the private sector and free market

• economic allocation is achieved by the invisible hand

• economic questions are solved by government departments

Microeconomics is concerned with

• the economy as a whole

• the electronics industry

• the study of individual economic behavior

• the interactions within the entire economy

Macroeconomics is the study of ___________________

• individual building blocks in the economy

• the relationship between different sectors of the economy

• household purchase decisions

• the economy as a whole

Which of the following is true about scarcity?

• Scarcity affects all societies.

• Scarcity exists only in poor countries.

• Scarce goods lead to lower prices.

• Scarcity of resources can be eliminated using sound economic policies.

What is Bob's opportunity cost if he decides to go out to eat with friends?

• the money spent on the dinner

• the money saved by not going out

• getting exercise

• having fun with friends

Why is the subject of the graph unable to produce any shoes when it grows 21 million tons of watermelons?

• Demand for shoes is limited.

• Resources are limited.

• The benefit is limited.

• Demand for watermelons is unlimited.