ECON 312 Week 4 Midterm Exam

ECON312 Principles of Economics - DeVry


Question 1. (TCO 1) As a consequence of the condition of scarcity

Question 2. (TCO 1) The opportunity cost of constructing a new public highway is the

Question 3. (TCO 1) A nation can increase its production possibilities by

Question 4. (TCO 1) Which expression is another way of saying "marginal benefit"?

Question 5. (TCO 1) The individual who brings together economic resources and assumes the risk of business ventures in a capitalist economy is called the

Question 6. (TCO 1) The Soviet Union economy of the 1980s would best be classified as

Question 7. (TCO 1) The simple circular-flow model shows that workers, entrepreneurs, and the owners of land and capital offer their services through

Question 8. (TCO 1) Consumers express self-interest when they

Question 9. (TCO 1) Which is not one of the five fundamental questions that an economy must deal with?

Question 10. (TCO 1) The major "success indicator" for business managers in command economies like the Soviet Union and China in the past was

Question 11. (TCO 2) An increase in demand means that

Question 12. (TCO 2) At the point where the demand and supply curves intersect

Question 13. (TCO 2) Black markets are associated with

Question 14. (TCO 2) An increase in demand for oil along with a simultaneous increase in supply of oil will

Question 15. (TCO 2) If Product Y is an inferior good, a decrease in consumer incomes will

Question 16. (TCO 2) If the price elasticity of demand for a product is equal to 0.5, then a 10 percent decrease in price will increase quantity demanded by

Question 17. TCO 2) Total revenue falls as the price of a good is raised, if the demand for the good is

Question 18. (TCO 2) You are the sales manager for a software company and have been informed that the price elasticity of demand for your most popular software is less than 1.  To increase total revenues, you should:

Question 19. (TCO 2) A state government wants to increase the taxes on cigarettes to increase tax revenue.  This tax would only be effective in raising new tax revenues if the price elasticity of demand is

Question 20. (TCO 2) When universities announce a large tuition increase and follow it with an announcement that more financial aid will be available, they are assuming that students who pay full tuition

Question 21. (TCO 3) Suppose that you could prepare your own tax return in 15 hours, or you could hire a tax specialist to prepare it for you in two hours.  You value your time at $11 an hour.  The tax specialist will charge you $55 an hour.  The opportunity cost of preparing your own tax return is

Question 22. (TCO 3) Economic profits are equal to

Question 23. (TCO 3) The main difference between the short run and the long run is that

Question 24. (TCO 3) The law of diminishing returns only applies in cases where

Question 25. (TCO 3) Marginal cost can be defined as the


Question 26. (TCO 3) If the price of a fixed factor of production increases by 50 percent, what effect would this have on the marginal-cost schedule facing a firm?

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    ECON 312 Week 4 Midterm Exam

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