Econ Midterm Review

What is the Opportunity Cost of buying a new pair of sneakers at the mall?

• the production cost of the sneakers
• the compliments that you will receive from your friends on your good taste
• the satisfaction that you get from wearing the sneakers
• the dollar value of the jeans and t-shirt you could have purchased instead.

The number of outputs produced by a given number of inputs is a measure of

• stability
• equity
• productivity
• efficiency

A production possibilities frontier model (curve) would be most useful in:

• determining the price of scarce resources
• analyzing the trade-off between efficiency and growth
• analyzing the trade-off between producing two products
• evaluating the role that government plays in the economy

Money is

• the same thing as credit
• what keeps people interdependent
• a standardized means of exchange
• being replaced by the barter system

Economic efficiency is making the best use of

• free enterprise
• productivity
• a non-specialized workforce
• scarce resources

A society is trying to decide whether to produce electricity using coal, natural gas, or nuclear reactors. This issue best illustrates how a society might have to decide:

• what to product
• how to produce
• how much to produce
• for whom to produce

As a factor of production, what is capital?

• machinery, tools, and buildings
• timber, water, and raw materials
• workers producing the products
• the person organizing the business

Total Revenue for the producer equals:

• price times quantity demanded
• marginal revenue times marginal cost
• profit per unit of output
• total cost minus profit

What is the incentive for economic risk-taking by the entrepreneur?

• wages
• profits
• decreased demand
• scarcity

When talking about elasticity, the more elastic a good is, the more price sensitive the good is to a change in supply. If the price of supplying gasoline increased and the price paid at the pump increased while revenues increased as well, what would demand at the pump by the consumer be?

• elastic
• inelastic
• shortage
• surplus