ECON 101 Fundamentals of Microeconomics Final Exam 1 And Correct Answers.
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Course
Econ 101
Institution
Econ 101
Economics - Answer The study of scarcity and choice.
Individual Choice - Answer Decisions by individuals about what to do, which necessarily involve decisions about what not to do.
Economy - Answer A system for coordinating a society's productive and consumptive activities.
Resource ...
ECON 101 Fundamentals of
Microeconomics Final Exam 1 And
Correct Answers.
Economics - Answer The study of scarcity and choice.
Individual Choice - Answer Decisions by individuals about what to do, which necessarily involve
decisions about what not to do.
Economy - Answer A system for coordinating a society's productive and consumptive activities.
Resource - Answer Anything that can be used to produce something else.
Land - Answer Refers to all resources that come from nature, such as minerals, timber, and petroleum.
Labor - Answer The effort of workers.
Physical Capital - Answer Refers to manufactured goods used to make other goods and services.
Human Capital - Answer Refers to the educational achievements and skills of the labor force, which
enhance its productivity.
Scarce Resource - Answer Is not available in sufficient quantities to satisfy all the various ways a society
wants to use it.
Opportunity Cost - Answer The real cost of an item is its opportunity cost: what you must give up in
order to get it.
Microeconomics - Answer The study of how people make decisions and how those decisions interact.
,Macroeconomics - Answer Concerned with the overall ups and downs in the economy.
Positive Economics - Answer The branch of economic analysis that describes the way the economy
actually works.
Normative Economics - Answer Makes prescriptions about the way the economy should work.
Which of the following is an example of a resource?
I. petroleum
II. a factory
III. a cheeseburger dinner
A) I only
B) II only
C) III only
D) I and II only
E) I, II, and III - Answer D) I and II only
Which of the following situations represent(s) resource scarcity?
I. Rapidly growing economies experience increasing levels of water pollution.
II. There is a finite amount of petroleum in the physical environment.
III. Cassette tapes are no longer being produced.
A) I only
B) II only
C) III only
D) I and II only
E) I, II, and III - Answer D) I and II only
,Suppose that you prefer reading a book you already own to watching TV and that you prefer watching TV
to listening to music. If these are your only three choices, what is the opportunity cost of reading?
A) watching TV and listening to music
B) watching TV
C) listening to music
D) sleeping
E) the price of the book - Answer B) watching TV
Which of the following statements is/are normative?
I. The price of gasoline is rising.
II. The price of gasoline is too high.
III. Gas prices are expected to fall in the near future.
A) I only
B) II only
C) III only
D) I and III only
E) I, II, and III - Answer B) II only
Which of the following questions is studied in microeconomics?
A) Should I go to college or get a job after I graduate?
B) What government policies should be adopted to promote employment in the economy?
C) How many people are employed in the economy this year?
D) Has the overall level of prices in the economy increased or decreased this year?
E) What determines the overall salary levels paid to workers in a given year? - Answer A) Should I go to
college or get a job after I graduate?
, Which of the following would increase demand for a normal good? A decrease in
A) price.
B) income.
C) the price of a substitute.
D) consumer taste for a good.
E) the price of a complement. - Answer E) the price of a complement.
A decrease in the price of butter would most likely decrease the demand for
A) margarine.
B) bagels.
C) jelly.
D) milk.
E) syrup. - Answer A) margarine.
If an increase in income leads to a decrease in demand, the good is
A) a complement.
B) a substitute.
C) inferior.
D) abnormal.
E) normal. - Answer C) inferior.
Which of the following will occur if consumers expect the price of a good to fall in the coming months?
A) The quantity demanded will rise today.
B) The quantity demanded will remain the same today.
C) Demand will increase today.
D) Demand will decrease today.
E) No change will occur today. - Answer D) Demand will decrease today.
Which of the following will increase the demand for disposable diapers?
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