ECO 211 MIDTERM EXAM UPDATED ACTUAL
QUESTIONS WITH CORRECT ANSWERS
Question 1.
According to the circular flow diagram, households...
ANSWER
Are sellers in the labor market and buyers in the goods and services market.
Question 2.
The circular flow diagram describes...
ANSWER
How firms and households carry out economic activities through the market for input or
factors of production and the market for goods and services.
Question 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.
ANSWER
B- High levels of trade and exchange between countries.
Question 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.
ANSWER
c. A nurse takes patients' vital signs while the doctor focuses on diagnosis so that more
patients can receive care
,Question 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
ANSWER
a. The value of the total production in a country
Question 6.
Someone criticizes the government for increasing interest rates but approving the increase in
government spending. They are criticizing the government's ____policy and praising the government
___ policy.
a. Microeconomic, Macroeconomic
b. Fiscal, Monetary
c. Macroeconomic, Microeconomic
d. Monetary, Fiscal
ANSWER
d. Monetary, Fiscal
Question 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.
ANSWER
d. There are not enough resources to produce all the goods and services people want to
purchase.
, Question 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.
ANSWER
b. The price of beef increased by 15% last month due to a cyber attack on a major beef
processing firm.
Question 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
ANSWER
a. Private citizens and firms; the government
Question 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 understanding.
ANSWER
d. captures the essence of the economic concepts and facilitates their understanding.
QUESTIONS WITH CORRECT ANSWERS
Question 1.
According to the circular flow diagram, households...
ANSWER
Are sellers in the labor market and buyers in the goods and services market.
Question 2.
The circular flow diagram describes...
ANSWER
How firms and households carry out economic activities through the market for input or
factors of production and the market for goods and services.
Question 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.
ANSWER
B- High levels of trade and exchange between countries.
Question 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.
ANSWER
c. A nurse takes patients' vital signs while the doctor focuses on diagnosis so that more
patients can receive care
,Question 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
ANSWER
a. The value of the total production in a country
Question 6.
Someone criticizes the government for increasing interest rates but approving the increase in
government spending. They are criticizing the government's ____policy and praising the government
___ policy.
a. Microeconomic, Macroeconomic
b. Fiscal, Monetary
c. Macroeconomic, Microeconomic
d. Monetary, Fiscal
ANSWER
d. Monetary, Fiscal
Question 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.
ANSWER
d. There are not enough resources to produce all the goods and services people want to
purchase.
, Question 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.
ANSWER
b. The price of beef increased by 15% last month due to a cyber attack on a major beef
processing firm.
Question 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
ANSWER
a. Private citizens and firms; the government
Question 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 understanding.
ANSWER
d. captures the essence of the economic concepts and facilitates their understanding.
