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UHM ECON 130 Exam 1 || with 100% Error-free Answers.
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In a market-oriented economy, the amount of a good that is produced is primarily decided by the interaction of: A. all consumers. B. buyers and sellers. C. producers and input suppliers. D. producers and government planning committees. correct answers B. buyers and sellers. In the ________...

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  • August 18, 2024
  • 17
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • in a market oriented economy the amount of a good

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UHM ECON 130 Exam 1 || with 100% Error-free Answers.
In a market-oriented economy, the amount of a good that is produced is primarily decided by
the interaction of:
A. all consumers.
B. buyers and sellers.
C. producers and input suppliers.
D. producers and government planning
committees. correct answers B. buyers and sellers.

In the ____________, households work and receive payment from firms.
A. financial investment market
B. financial capital market
C. labor market
D. savings market correct answers C. labor market

In a command economy, the __________ either makes most economic decisions itself or at
least strongly influences how the decisions are made.
A. government
B. market
C. firm
D. business sector correct answers A. government

In the first chapter of The Wealth of Nations, Smith introduces the idea of the __________,
which means the way in which the work required to produce a good or service is divided into
a number of tasks that are performed by different workers.
A. division of labor
B. interconnected economy
C. task economy
D. modern economy correct answers A. division of labor

The basic difference between macroeconomics and microeconomics is:
A. microeconomics concentrates on individual
markets while macroeconomics focuses
primarily on international trade.
B. microeconomics concentrates on the
behaviour of individual consumers while
macroeconomics focuses on the behaviour of
firms.
C. microeconomics concentrates on the
behaviour of individual consumers and firms
while macroeconomics focuses on the
performance of the entire economy.
D. microeconomics explores the causes of
inflation while macroeconomics focuses on
the causes of unemployment correct answers C. microeconomics concentrates on the

,behaviour of individual consumers and firms while macroeconomics focuses on the performance
of the entire economy.

Scarcity exists because of:
A. the market mechanism.
B. specialization and division of labor.
C. the allocation of goods by prices
D. unlimited wants and limited resources correct answers D. unlimited wants and limited
resources

Any given demand or supply curve is based on the ceteris paribus assumption that
___________________.
A. everything is variable.
B. all else is held equal
C. no one knows which variables will change
and which will remain constant.
D. what is true for the individual is not
necessarily true for the whole. correct answers B. all else is held equal

In deciding how many hours to work, Beulah will make a choice that maximizes her _______;
that is, she will choose according to her preferences for leisure time and income.
A. budget constraint
B. opportunity set
C. utility
D. production possibilities frontier correct answers C. utility

Andy views beer and pizza as complements to one another. If the price of pizza decreases,
economists would expect:
A. Andy's demand for pizza to increase.
B. Andy's demand for pizza to decrease.
C. Andy's quantity of pizza demanded to
decrease.
D. Andy's demand for beer to increase. correct answers D. Andy's demand for beer to increase.

The nature of demand indicates that as the price of a good increases:
A. suppliers wish to sell less of it.
B. more of it is produced.
C. more of it is desired.
D. buyers desire to purchase less of it. correct answers D. buyers desire to purchase less of it.

when the price elasticity of demand is 0.89, we know that
A. the demand is very sensitive to the price
change
B. the demand is inelastic
C. the demand curve must be very flat
D. the percentage change of demand is

, larger than the percentage change of price correct answers B. the demand is inelastic

The price of each of these goods rise by 100%.
For which good does Qd drop the least by percentage?
A. Breakfast cereal
B. Lunch pizza
C. Insulin
D. School backpack. correct answers C. Insulin

A horizontal demand curve suggests
A. the demand is very insensitive to price
change
B. the demand is very inelastice
C. the tiniest price change will cause demand to fall to zero
D. demand will increase to infinity if price increases by 1% correct answers C. the tiniest price
change will cause demand to fall to zero

If a seller knows that the price elasticity of demand is 3.5, is it a good idea for him to increase
his price by 20%?
A. yes, because the price increase will
increase his sales revenue
B. no, his total sales revenue will drop due to the price increase
C. not sure, need more information correct answers B. no, his total sales revenue will drop due to
the price increase

what is income elasticity of demand?
A. it measures the response of demand to a
change in consumer income
B. it measures how responsive your income
changes due to the change of your demand
C. it measures your income change in
response to the price change of consumer
goods correct answers A. it measures the response of demand to a change in consumer income

What economic theory can be used to explain the diamond and water paradox?
A. Total Utility
B. Income effect
C. Marginal Utility
D. Substitution Effect correct answers C. Marginal Utility

Which of the following statement is true?
A. Utility units are observable.
B. Total utility is equal to marginal utility
C. utility is gained whenever someone wants
a good
D. Marginal utility theory assumes that

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