APU ECO101 MIDTERM EXAM

Question 1 of 19
5.0
Points
Economics is the study of:
A.increasing
the level of productive resources so there is maximum output in society.
B.increasing
the level of productive resources so there is a minimum level of income.
C.how people, institutions, and
society make choices under conditions of scarcity.
D.the
efficient use of scarce resources paid for at the minimum level of cost to
consumers and businesses.
Question 2 of 19
5.0
Points
Which of the following is not a central focus of the
“economic perspective”?
A.Scarcity
and choice.
B.The scientific method.
C.Purposeful
behavior.
D.Marginal
analysis.
Question 3 of 19
5.0
Points
The satisfaction or pleasure one gets from consuming a good
or service is:
A.price.

B.utility.
C.consumption.

D.preferences.

Question 4 of 19
5.0
Points
The private ownership of property resources and use of
prices to direct and coordinate economic activity is characteristic of:
A.a
command system.
B.a market system.
C.communism.

D.socialism.

Question 5 of 19
5.0
Points
Which statement best describes a capitalist economy?
A.The
production of goods and services is determined primarily by markets, but the
allocation of goods and services is determined primarily by government.
B.The
production of goods and services is determined primarily by government, but the
allocation of goods and services is determined primarily by markets.
C.The production and allocation
of goods and services is determined primarily through markets.
D.The
production and allocation of goods and services is determined primarily through
government.
Question 6 of 19
5.0
Points
Capitalism is an economic system that:
A.produces
more capital goods than consumer goods.
B.produces
more consumer goods than capital goods.
C.gives
the government the right to tax individuals and corporations.
D.private individuals and
corporations the right to own productive resources.
Question 7 of 19
5.0
Points
In a market system, well-defined property rights are
important because they:
A.reduce
unnecessary investment.
B.limit
destructive economic growth.
C.create
economic problems.
D.encourage economic activity.
Question 8 of 19
5.0
Points
If two goods are complements:
A.they
are consumed independently.
B.an
increase in the price of one will increase the demand for the other.
C.a decrease in the price of one
will increase the demand for the other.
D.they
are necessarily inferior goods.
Question 9 of 19
5.0
Points
When the price of a product is increased 10 percent, the
quantity demanded decreases 15 percent. In this range of prices, demand for
this product is:
A.elastic.
B.inelastic.

C.cross-elastic.

D.unitary
elastic.
Question 10 of 19
5.0
Points
Demand can be said to be inelastic when:
A.an
increase in price results in a reduction in total revenue.
B.a
reduction in price results in an increase in total revenue.
C.a reduction in price results in
a decrease in total revenue.
D.the
elasticity coefficient exceeds one.
Question 11 of 19
5.0
Points
Economic growth is shown by a shift of the production
possibilities curve outward and to the right.

A. True
B. False
Question 12 of 19
5.0
Points
The four factors of production are land, labor, capital, and
government services.

A. True
B. False
Question 13 of 19
5.0
Points
If demand increases and supply simultaneously decreases,
equilibrium price will rise.

A. True
B. False
Question 14 of 19
5.0
Points
Property rights have a positive effect in a market economy
because they encourage owners to maintain their property.

A. True
B. False
Question 15 of 19
5.0
Points
In the price range where demand is inelastic, a decrease in
price will result in a decrease in total revenue.

A. True
B. False
Question 16 of 19
5.0
Points
Price elasticity of supply decreases the longer the time
period.

A. True
B. False
Question 17 of 19
5.0
Points
Toothpaste and toothbrushes are substitute goods.

A. True
B. False
Question 18 of 19
5.0
Points
A government-set price ceiling will lower equilibrium price
and quantity in a market.
In

A. True
B. False
Question 19 of 19
10.0
Points
Under what elasticity conditions would the following be
true:
“Increasing the minimum wage will result in a decrease
in employment for workers who now earn less than the new minimum wage”?