MacroeconomicsECN211 Midterm
Review Exam LATEST 2026/2027
Questions and Verified Answers
GUARANTEED
Q1. The study of how society manages its scarce resources is called:
• A) Microeconomics
• B) Macroeconomics
• C) Economics
• D) Opportunity cost analysis
Correct ,,,answer,,,: C) Economics
Rationale: Economics is defined as the study of how society manages its scarce
resources.
Q2. The limited nature of society's resources is known as:
• A) Opportunity cost
• B) Scarcity
• C) Market failure
• D) Efficiency
Correct ,,,answer,,,: B) Scarcity
Rationale: Scarcity refers to the limited nature of society's resources, which forces
trade-offs.
Q3. Whatever must be given up to obtain some item is called:
, • A) Marginal cost
• B) Opportunity cost
• C) Scarcity
• D) Incentive
Correct ,,,answer,,,: B) Opportunity cost
Rationale: Opportunity cost is the value of the next best alternative that is forgone
when making a choice.
Q4. Small incremental adjustments to a plan of action are called:
• A) Marginal changes
• B) Opportunity costs
• C) Incentives
• D) Market adjustments
Correct ,,,answer,,,: A) Marginal changes
Rationale: Marginal changes are small, incremental adjustments to an existing
plan of action.
Q5. Something that induces a person to act is called:
• A) Incentive
• B) Marginal benefit
• C) Opportunity cost
• D) Rational decision
Correct ,,,answer,,,: A) Incentive
Rationale: An incentive induces a person to act, often in response to changes in
costs or benefits.
Q6. The property of society getting the most from its scarce resources is:
• A) Equality
, • B) Equity
• C) Efficiency
• D) Productivity
Correct ,,,answer,,,: C) Efficiency
Rationale: Efficiency means society is getting the maximum benefits from its
scarce resources.
Q7. The property of distributing economic prosperity uniformly among
society's members is:
• A) Efficiency
• B) Equality
• C) Productivity
• D) Incentive
Correct ,,,answer,,,: B) Equality
Rationale: Equality refers to distributing economic prosperity uniformly among
members of society.
Q8. Rational people systematically do the best they can to achieve their
objectives given:
• A) Unlimited resources
• B) Available opportunities
• C) Government mandates
• D) Market failures
Correct ,,,answer,,,: B) Available opportunities
Rationale: Rational people compare marginal benefits and marginal costs given
available opportunities.
Q9. A situation in which a market left on its own fails to allocate resources
efficiently is called:
, • A) Market equilibrium
• B) Market failure
• C) Externality
• D) Market power
Correct ,,,answer,,,: B) Market failure
Rationale: Market failure occurs when the free market fails to allocate resources
efficiently on its own.
Q10. The impact of one person's actions on the well-being of a bystander is
called:
• A) Market power
• B) Externality
• C) Incentive
• D) Opportunity cost
Correct ,,,answer,,,: B) Externality
Rationale: An externality is an unintended side effect that affects third parties not
involved in a transaction.
Q11. The ability of a single economic actor to have substantial influence on
market prices is:
• A) Externality
• B) Market failure
• C) Market power
• D) Efficiency
Correct ,,,answer,,,: C) Market power
Rationale: Market power allows a single actor or small group to influence market
prices significantly.
Review Exam LATEST 2026/2027
Questions and Verified Answers
GUARANTEED
Q1. The study of how society manages its scarce resources is called:
• A) Microeconomics
• B) Macroeconomics
• C) Economics
• D) Opportunity cost analysis
Correct ,,,answer,,,: C) Economics
Rationale: Economics is defined as the study of how society manages its scarce
resources.
Q2. The limited nature of society's resources is known as:
• A) Opportunity cost
• B) Scarcity
• C) Market failure
• D) Efficiency
Correct ,,,answer,,,: B) Scarcity
Rationale: Scarcity refers to the limited nature of society's resources, which forces
trade-offs.
Q3. Whatever must be given up to obtain some item is called:
, • A) Marginal cost
• B) Opportunity cost
• C) Scarcity
• D) Incentive
Correct ,,,answer,,,: B) Opportunity cost
Rationale: Opportunity cost is the value of the next best alternative that is forgone
when making a choice.
Q4. Small incremental adjustments to a plan of action are called:
• A) Marginal changes
• B) Opportunity costs
• C) Incentives
• D) Market adjustments
Correct ,,,answer,,,: A) Marginal changes
Rationale: Marginal changes are small, incremental adjustments to an existing
plan of action.
Q5. Something that induces a person to act is called:
• A) Incentive
• B) Marginal benefit
• C) Opportunity cost
• D) Rational decision
Correct ,,,answer,,,: A) Incentive
Rationale: An incentive induces a person to act, often in response to changes in
costs or benefits.
Q6. The property of society getting the most from its scarce resources is:
• A) Equality
, • B) Equity
• C) Efficiency
• D) Productivity
Correct ,,,answer,,,: C) Efficiency
Rationale: Efficiency means society is getting the maximum benefits from its
scarce resources.
Q7. The property of distributing economic prosperity uniformly among
society's members is:
• A) Efficiency
• B) Equality
• C) Productivity
• D) Incentive
Correct ,,,answer,,,: B) Equality
Rationale: Equality refers to distributing economic prosperity uniformly among
members of society.
Q8. Rational people systematically do the best they can to achieve their
objectives given:
• A) Unlimited resources
• B) Available opportunities
• C) Government mandates
• D) Market failures
Correct ,,,answer,,,: B) Available opportunities
Rationale: Rational people compare marginal benefits and marginal costs given
available opportunities.
Q9. A situation in which a market left on its own fails to allocate resources
efficiently is called:
, • A) Market equilibrium
• B) Market failure
• C) Externality
• D) Market power
Correct ,,,answer,,,: B) Market failure
Rationale: Market failure occurs when the free market fails to allocate resources
efficiently on its own.
Q10. The impact of one person's actions on the well-being of a bystander is
called:
• A) Market power
• B) Externality
• C) Incentive
• D) Opportunity cost
Correct ,,,answer,,,: B) Externality
Rationale: An externality is an unintended side effect that affects third parties not
involved in a transaction.
Q11. The ability of a single economic actor to have substantial influence on
market prices is:
• A) Externality
• B) Market failure
• C) Market power
• D) Efficiency
Correct ,,,answer,,,: C) Market power
Rationale: Market power allows a single actor or small group to influence market
prices significantly.
