ECO 211 MIDTERM EXAM
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1. According to the circular flow diagram, households...: Are sellers in the labor market and
buyers in the goods and services market.
2. The circular flow diagram describes...: How firms and households carry out economic activities
through the market for input or factors of production and the market for goods and services.
3. Which of the following elements demonstrate the degree of globalization?:
a. Large underground economies.
b. High levels of trade and exchange between countries.
c. A low export to Gross Domestic Product ratio for a country.
d. Rapidly growing Gross Domestic Product for several countries.: B- High levels of
trade and exchange between countries.
4. Which of the following examples represents the relationship between division
of labor and production?-
a. A company assigns different parts of the production process to various
workers, which complicates the process and results in waste
b. A hospital hires more qualified nurses to ensure better quality of care for
patients
c. A nurse takes patients' vital signs while the doctor focuses on diagnosis so
that more patients can receive care
d. A primary care office hires more doctors to ensure that more patients receive
care.: c. A nurse takes patients' vital signs while the doctor focuses on diagnosis so that more patients can receive
care
5. Gross Domestic Product represents...
. The value of the total production in a country
b. The ratio of exports relative to the total production in a country
c. The sum of imports and exports of a country
d. The degree of globalization: a. The value of the total production in a country
6. Someone criticizes the government for increasing interest rates but approv-
ing the increase in government spending. They are criticizing the government's
____policy and praising the government ___ policy.
a. Microeconomic, Macroeconomic
b. Fiscal, Monetary
, ECO 211 MIDTERM EXAM
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c. Macroeconomic, Microeconomic
d. Monetary, Fiscal: d. Monetary, Fiscal
7. Scarcity is a problem because...
a. Unemployment exists, and therefore some people do not have enough
resources to meet their basic needs.
b. There are only small quantities of resources available on earth
c. Not everyone has the same amount of resources, such as land and labor
d. There are not enough resources to produce all the goods and services people
want to purchase.: d. There are not enough resources to produce all the goods and services people want to
purchase.
8. Which of the following statements describes microeconomics?
a. Inflation in the US increased by 5% in May 2021.
b. The price of beef increased by 15% last month due to a cyber attack on a
major beef processing firm.
c. The federal government lowered corporate tax rates in 2019.
d. The size of the U.S. economy shrunk by 7% in 2020 due to the COVID crisis.: b.
The price of beef increased by 15% last month due to a cyber attack on a major beef processing firm.
9. In market economies, most decisions are made by ___, while in command
economies, most economic decisions are made by ___.
a. Private citizens and firms; the government
b. Households; local leaders
c. Families, private businesses
d. The government; households and firms: a. Private citizens and firms; the government
10. A good economic theory ....
a. A set of mathematical equations representing economic behavior.
b. Must contain a complete representation of real economic events to be
useful.
c. is a detailed representation of reality used to explain past economic events.
d. captures the essence of the economic concepts and facilitates their under-
standing.: d. captures the essence of the economic concepts and facilitates their understanding.
11. Irfan has the budget constraint described in the graph below. If Irfan pur-
chases 1 hour of tutoring per month and decides to increase his purchases to
, ECO 211 MIDTERM EXAM
Study online at https://quizlet.com/_c66bs6
2 hours per month, what is the opportunity cost of the 2nd tutoring hour?
a.
1 hour of tutoring
b.
2 restaurant meals
c.
6 restaurant meals
d.
4 restaurant meals: b.
2 restaurant meals
12. Alex has a budget of $100 a month for movie tickets and restaurant meals.
A movie ticket will cost $10 and a restaurant meal costs $20. Which of the
following combinations is part of Alex's budget constraint?
a. 2 movie tickets and 1 restaurant meal
b. 2 movie tickets and 4 restaurant meals
c. 2 movie tickets and 5 restaurant meals
d. 4 movie tickets and 4 restaurant meals: b. 2 movie tickets and 4 restaurant meals
13. An economy will achieve productive efficiency when it ___ and will achieve
allocative efficiency when it ___.
a.
is maximizing production and could not increase production of both goods at
the same time; is producing an equal amount of both goods.
b.
is producing beyond the production possibility frontier; is producing inside the
production possibility frontier.
c.
is producing the combination of goods and services that most benefit the
people in the economy; is maximizing production and could not increase pro-
duction of both goods at the same time.
d.
is maximizing production and could not increase production of both goods at
the same time; is producing the combination of goods and services that most
Study online at https://quizlet.com/_c66bs6
1. According to the circular flow diagram, households...: Are sellers in the labor market and
buyers in the goods and services market.
2. The circular flow diagram describes...: How firms and households carry out economic activities
through the market for input or factors of production and the market for goods and services.
3. Which of the following elements demonstrate the degree of globalization?:
a. Large underground economies.
b. High levels of trade and exchange between countries.
c. A low export to Gross Domestic Product ratio for a country.
d. Rapidly growing Gross Domestic Product for several countries.: B- High levels of
trade and exchange between countries.
4. Which of the following examples represents the relationship between division
of labor and production?-
a. A company assigns different parts of the production process to various
workers, which complicates the process and results in waste
b. A hospital hires more qualified nurses to ensure better quality of care for
patients
c. A nurse takes patients' vital signs while the doctor focuses on diagnosis so
that more patients can receive care
d. A primary care office hires more doctors to ensure that more patients receive
care.: c. A nurse takes patients' vital signs while the doctor focuses on diagnosis so that more patients can receive
care
5. Gross Domestic Product represents...
. The value of the total production in a country
b. The ratio of exports relative to the total production in a country
c. The sum of imports and exports of a country
d. The degree of globalization: a. The value of the total production in a country
6. Someone criticizes the government for increasing interest rates but approv-
ing the increase in government spending. They are criticizing the government's
____policy and praising the government ___ policy.
a. Microeconomic, Macroeconomic
b. Fiscal, Monetary
, ECO 211 MIDTERM EXAM
Study online at https://quizlet.com/_c66bs6
c. Macroeconomic, Microeconomic
d. Monetary, Fiscal: d. Monetary, Fiscal
7. Scarcity is a problem because...
a. Unemployment exists, and therefore some people do not have enough
resources to meet their basic needs.
b. There are only small quantities of resources available on earth
c. Not everyone has the same amount of resources, such as land and labor
d. There are not enough resources to produce all the goods and services people
want to purchase.: d. There are not enough resources to produce all the goods and services people want to
purchase.
8. Which of the following statements describes microeconomics?
a. Inflation in the US increased by 5% in May 2021.
b. The price of beef increased by 15% last month due to a cyber attack on a
major beef processing firm.
c. The federal government lowered corporate tax rates in 2019.
d. The size of the U.S. economy shrunk by 7% in 2020 due to the COVID crisis.: b.
The price of beef increased by 15% last month due to a cyber attack on a major beef processing firm.
9. In market economies, most decisions are made by ___, while in command
economies, most economic decisions are made by ___.
a. Private citizens and firms; the government
b. Households; local leaders
c. Families, private businesses
d. The government; households and firms: a. Private citizens and firms; the government
10. A good economic theory ....
a. A set of mathematical equations representing economic behavior.
b. Must contain a complete representation of real economic events to be
useful.
c. is a detailed representation of reality used to explain past economic events.
d. captures the essence of the economic concepts and facilitates their under-
standing.: d. captures the essence of the economic concepts and facilitates their understanding.
11. Irfan has the budget constraint described in the graph below. If Irfan pur-
chases 1 hour of tutoring per month and decides to increase his purchases to
, ECO 211 MIDTERM EXAM
Study online at https://quizlet.com/_c66bs6
2 hours per month, what is the opportunity cost of the 2nd tutoring hour?
a.
1 hour of tutoring
b.
2 restaurant meals
c.
6 restaurant meals
d.
4 restaurant meals: b.
2 restaurant meals
12. Alex has a budget of $100 a month for movie tickets and restaurant meals.
A movie ticket will cost $10 and a restaurant meal costs $20. Which of the
following combinations is part of Alex's budget constraint?
a. 2 movie tickets and 1 restaurant meal
b. 2 movie tickets and 4 restaurant meals
c. 2 movie tickets and 5 restaurant meals
d. 4 movie tickets and 4 restaurant meals: b. 2 movie tickets and 4 restaurant meals
13. An economy will achieve productive efficiency when it ___ and will achieve
allocative efficiency when it ___.
a.
is maximizing production and could not increase production of both goods at
the same time; is producing an equal amount of both goods.
b.
is producing beyond the production possibility frontier; is producing inside the
production possibility frontier.
c.
is producing the combination of goods and services that most benefit the
people in the economy; is maximizing production and could not increase pro-
duction of both goods at the same time.
d.
is maximizing production and could not increase production of both goods at
the same time; is producing the combination of goods and services that most
