Economics MidTerm Exam Spring 2023

What is the basic economic condition that exists when unlimited wants exceed limited productive resources?

• opportunity cost
• scarcity
• rational decision-making
• productive resources

Which of the following is NOT one of the productive resources?

• land
• labor
• consumers
• entrepreneurship

One strength of a market economic system is

• they allow producers very little freedom.
• they cannot guarantee security and fairness.
• they do not respond quickly to change.
• they offer profit motive to entrepreneurs.

A person decides to spend $20 on a trip to a movie with popcorn instead of buying a $20 shirt. What is the opportunity cost of the decision in this example?

• $20
• The benefit of owning a new shirt.
• The enjoyment gained from experiencing the movie.
• A third choice s/he could have spent the $20 on instead.

Which of the following refers to the "additional" benefit or cost of a rational decision?

• utility
• marginal
• allocate
• distribute

Bill must decide between using the $20 he has on hand to either go to the movies with his best friend or buy a gift for the girl he likes. If Bill decides that the marginal benefit he would get from buying the girl the gift is greater than the marginal cost, the rational economic choice for Bill would be

• to go to the movies with his best friend.
• to buy the gift for the girl he likes.
• to avoid any opportunity cost.
• to save his resources for another time.

Amanda is offered a raise and a brand new office if she can double her sales totals from the previous year. Amanda's employers are attempting to motivate her with

• a negative incentive.
• compound interest.
• a positive incentive.
• human capital.

You are working with a group to produce a play. You have artistic skills, so you volunteer to design the set. Dante is good at acting. He agrees to take the lead role. Carmen has good technical skills, therefore she offers to set up lighting and sound. From these decisions, your group is benefiting from

• specialization
• productivity
• utility
• economies of scale

When producers freely choose what to produce and sell without the intervention of government and consumers freely choose what they will buy and what they are willing to pay for goods and services, it is known as

• production possibilities.
• command economic interaction.
• market analysis.
• voluntary exchange.

What type of economic system do the characteristics in the following list describe: -property privately owned -businesses compete for profit -basic economic questions answered through supply and demand -government imposes some regulation on businesses

• market
• command
• traditional
• mixed