ECON 104 PSU EXAM 1, ECON 104
MIDTERM EXAM QUESTIONS WITH
VERIFIED ANSWERS
An is the cost associated with theJalternative that was sacrificed to do or acquire
something else. It is the cost associated with the foregone opportunity. -Jcorrect answer-Opportunity cost
The entails a comparison of marginal benefits and marginal costs in decision
making. - correct answer-Economic Perspective
A well tested and widely accepted theory is referred to as a law or principal. An economic generalization whi
ch is based on economic lawsJor principals implies what? - correctJanswer-
The greatest degree of confidence in outcome.
Full employment, price level stability, and economic growth are widely accepted
goals in theJU.S. -Jcorrect answer-Macroeconomic Goals
can best be described as the study of the large aggregates of the economy or theJecono
my as a whole. - correct answer-Macroeconomics
Should be the basis for determining wether or not a good, or service is pr
oduced. Even inherently desirable products, such asJeducation, and health care, should be produced when t
he marginal benefits of production no longer outweigh marginal costs. -Jcorrect answer-Marginal Analysis
isJone of deciding how to make the best of limited resources to satisfy virtuall
y unlimited wants. - correct answer-Economizing Problem
To reach full production a society must achieve both and efficiency . -
correct answer-Allocative and Productive
The curve illustrates the basic principal that if all the resources of an economy ar
e in use, more of one good can be produced only if less of another good is produced. - correct answer-
Production Possibilities Curve
,Unemployment and or productive inefficienciesJare both illustrated by a point inside the production
. - correct answer-Possibilities Curve.
AJproductionsJ shows that the maximum amounts of two goods that can be produce
d assuming the full and efficient use of available resources. - correct answer-Possibility Curve
The process of producingJand accumulating capital goods is called . -Jcorrect answer-
Investment.
Devastation from a war may shift a nations production possibility curve . - correctJanswer-Inward
The simpleJcircular flow model showsJthatJhouseholdsJare on the side of the resource market, a
nd on the side of the product market. - correct answer-Selling, Buying
The relationship between quantity supplied and price is . -Jcorrect answer-Direct.
The relationship between quantity demanded and price isJ . - correct answer-Inverse.
A change in price in K will cause a change in of K. - correct answer-
Quantity Demanded
AJchange in the price of KJwill not cause the demand for a product, KJto or .-
correct answer-Shift or Change.
An increase in the means that price has declined and consumers therefore want t
o purchase more of the product. - correct answer-Quantity Demanded
The of indicates that producersJwill offer more of a product at a higher then they will a
t a lower price. - correct answer-Law of Supply
, AJ shift of the supply curve mightJbe caused by some firms leaving an industry. - correct answer-
Leftward
If Z is an inferior good, a in income will shift the demand curve for Z to the right. -Jcorrect answer-
Decrease
Characteristics of the market system: - correctJanswer-
Private Property, Freedom of Enterprise, and Competition in product and resource markets.
ownership of major industries is not a characteristic of theJmarket system. - correct answer-
Government
To the amount of capital goods in a full employment, full production economy, society must decr
ease consumption. - correct answer-Increase
The of problem associated with barter refers toJthe fact that for exchange to occur eac
h seller mustJhave a product that some buyer wants. - correctJanswer-Coincidence of Wants
AJfirms is profitJover and above that which it needs to reasonably compensate for the ti
me and other resources the owner suppliesJtoJthe business. -Jcorrect answer-Economic Profit
From societiesJpoint of view the economic function of and isJto constantly relocate r
esourcesJfrom less desired to more desired uses. - correct answer-ProfitJand Losses
The market systems answer to the fundamental question "How will the goods and services be produced?" is
essentially ". ... ". - correct answer-"At least cost production".
WhatJtwo wavesJof immigration did America goJthrough? - correct answer--
Ellis Island/ New York Harbor (1818-1913)
- 1980 to Current Day
MIDTERM EXAM QUESTIONS WITH
VERIFIED ANSWERS
An is the cost associated with theJalternative that was sacrificed to do or acquire
something else. It is the cost associated with the foregone opportunity. -Jcorrect answer-Opportunity cost
The entails a comparison of marginal benefits and marginal costs in decision
making. - correct answer-Economic Perspective
A well tested and widely accepted theory is referred to as a law or principal. An economic generalization whi
ch is based on economic lawsJor principals implies what? - correctJanswer-
The greatest degree of confidence in outcome.
Full employment, price level stability, and economic growth are widely accepted
goals in theJU.S. -Jcorrect answer-Macroeconomic Goals
can best be described as the study of the large aggregates of the economy or theJecono
my as a whole. - correct answer-Macroeconomics
Should be the basis for determining wether or not a good, or service is pr
oduced. Even inherently desirable products, such asJeducation, and health care, should be produced when t
he marginal benefits of production no longer outweigh marginal costs. -Jcorrect answer-Marginal Analysis
isJone of deciding how to make the best of limited resources to satisfy virtuall
y unlimited wants. - correct answer-Economizing Problem
To reach full production a society must achieve both and efficiency . -
correct answer-Allocative and Productive
The curve illustrates the basic principal that if all the resources of an economy ar
e in use, more of one good can be produced only if less of another good is produced. - correct answer-
Production Possibilities Curve
,Unemployment and or productive inefficienciesJare both illustrated by a point inside the production
. - correct answer-Possibilities Curve.
AJproductionsJ shows that the maximum amounts of two goods that can be produce
d assuming the full and efficient use of available resources. - correct answer-Possibility Curve
The process of producingJand accumulating capital goods is called . -Jcorrect answer-
Investment.
Devastation from a war may shift a nations production possibility curve . - correctJanswer-Inward
The simpleJcircular flow model showsJthatJhouseholdsJare on the side of the resource market, a
nd on the side of the product market. - correct answer-Selling, Buying
The relationship between quantity supplied and price is . -Jcorrect answer-Direct.
The relationship between quantity demanded and price isJ . - correct answer-Inverse.
A change in price in K will cause a change in of K. - correct answer-
Quantity Demanded
AJchange in the price of KJwill not cause the demand for a product, KJto or .-
correct answer-Shift or Change.
An increase in the means that price has declined and consumers therefore want t
o purchase more of the product. - correct answer-Quantity Demanded
The of indicates that producersJwill offer more of a product at a higher then they will a
t a lower price. - correct answer-Law of Supply
, AJ shift of the supply curve mightJbe caused by some firms leaving an industry. - correct answer-
Leftward
If Z is an inferior good, a in income will shift the demand curve for Z to the right. -Jcorrect answer-
Decrease
Characteristics of the market system: - correctJanswer-
Private Property, Freedom of Enterprise, and Competition in product and resource markets.
ownership of major industries is not a characteristic of theJmarket system. - correct answer-
Government
To the amount of capital goods in a full employment, full production economy, society must decr
ease consumption. - correct answer-Increase
The of problem associated with barter refers toJthe fact that for exchange to occur eac
h seller mustJhave a product that some buyer wants. - correctJanswer-Coincidence of Wants
AJfirms is profitJover and above that which it needs to reasonably compensate for the ti
me and other resources the owner suppliesJtoJthe business. -Jcorrect answer-Economic Profit
From societiesJpoint of view the economic function of and isJto constantly relocate r
esourcesJfrom less desired to more desired uses. - correct answer-ProfitJand Losses
The market systems answer to the fundamental question "How will the goods and services be produced?" is
essentially ". ... ". - correct answer-"At least cost production".
WhatJtwo wavesJof immigration did America goJthrough? - correct answer--
Ellis Island/ New York Harbor (1818-1913)
- 1980 to Current Day
