Economics Final Exam – Greenville Technical College Study Guide, Notes & Practice Questions
(2026 Updated)
The invisible hand principle indicates that competitive markets can help promote the efficient
use of resources
A)only if buyers and sellers really care, personally, about economic efficiency.
B) even when each market participant cares only about their own self-interest rather than about
the overall efficiency of resource use.
C) even if business firms fail to produce goods efficiently.
D) if and only if, businesses recognize their social obligations to keep costs low and use
resources wisely. - correct answer ✔✔even when each market participant cares only about their
own self-interest rather than about the overall efficiency of resource use
Which of the following is most clearly consistent with the basic postulate of economics
regarding the reaction of people to changes in incentives?
A) farmers produce fewer bushels of wheat in response to an increase in the price of wheat.
B) People will buy mterm-2ore milk at a price of $2 per gallon than at $1 per gallon.
C) People will buy less gas if the price of gas increases by $0.20 per gallon.
D) People will consume more beef if the price increases from $1 to $2 per pound. - correct
answer ✔✔People will buy less gas if the price of gas increases by $0.20 per gallon.
The basic difference between macroeconomics and microeconomics is that:
A) macroeconomics is concerned with the forest (aggregate markets), while microeconomics is
concerned with individual trees (individuals within the market).
B) macroeconomics is concerned with policy decisions, while microeconomics applies only to
theory.
, C) microeconomics is concerned with the forest (aggregate markets), while microeconomics is
concerned with individual trees (individuals within the market).
D) opportunity cost is applicable to macroeconomics, and the fallacy of composition to
microeconomics. - correct answer ✔✔macroeconomics is concerned with the forest (aggregate
markets), while microeconomics is concerned with individual trees (individuals within the
market)
Rational choice requires that opportunity cost be;
A) Ignored in making a decision.
B)considered for individual choices, but not for societal choices.
C) computed, but not actually used in making a decision.
D) considered as part of making a decision.
E) used as a the sole decision criterion. - correct answer ✔✔considered as part of making a
decision.
If cable TV and satellite TV service are substitutes,
A) a decrease in the price of cable will decrease the demand for satellite TV.
B) an increase in the price of cable will decrease the demand for satellite TV.
C)an increase in the price of cable will generally have no effect on the demand for satellite TV.
D) an increase in the price of cable will shift the demand curve for satellite TV to the left. -
correct answer ✔✔a decrease in the price of cable will decrease the demand for satellite TV.
When the market for a consumer good is in equilibrium
A) consumer surplus will equal producer surplus.
(2026 Updated)
The invisible hand principle indicates that competitive markets can help promote the efficient
use of resources
A)only if buyers and sellers really care, personally, about economic efficiency.
B) even when each market participant cares only about their own self-interest rather than about
the overall efficiency of resource use.
C) even if business firms fail to produce goods efficiently.
D) if and only if, businesses recognize their social obligations to keep costs low and use
resources wisely. - correct answer ✔✔even when each market participant cares only about their
own self-interest rather than about the overall efficiency of resource use
Which of the following is most clearly consistent with the basic postulate of economics
regarding the reaction of people to changes in incentives?
A) farmers produce fewer bushels of wheat in response to an increase in the price of wheat.
B) People will buy mterm-2ore milk at a price of $2 per gallon than at $1 per gallon.
C) People will buy less gas if the price of gas increases by $0.20 per gallon.
D) People will consume more beef if the price increases from $1 to $2 per pound. - correct
answer ✔✔People will buy less gas if the price of gas increases by $0.20 per gallon.
The basic difference between macroeconomics and microeconomics is that:
A) macroeconomics is concerned with the forest (aggregate markets), while microeconomics is
concerned with individual trees (individuals within the market).
B) macroeconomics is concerned with policy decisions, while microeconomics applies only to
theory.
, C) microeconomics is concerned with the forest (aggregate markets), while microeconomics is
concerned with individual trees (individuals within the market).
D) opportunity cost is applicable to macroeconomics, and the fallacy of composition to
microeconomics. - correct answer ✔✔macroeconomics is concerned with the forest (aggregate
markets), while microeconomics is concerned with individual trees (individuals within the
market)
Rational choice requires that opportunity cost be;
A) Ignored in making a decision.
B)considered for individual choices, but not for societal choices.
C) computed, but not actually used in making a decision.
D) considered as part of making a decision.
E) used as a the sole decision criterion. - correct answer ✔✔considered as part of making a
decision.
If cable TV and satellite TV service are substitutes,
A) a decrease in the price of cable will decrease the demand for satellite TV.
B) an increase in the price of cable will decrease the demand for satellite TV.
C)an increase in the price of cable will generally have no effect on the demand for satellite TV.
D) an increase in the price of cable will shift the demand curve for satellite TV to the left. -
correct answer ✔✔a decrease in the price of cable will decrease the demand for satellite TV.
When the market for a consumer good is in equilibrium
A) consumer surplus will equal producer surplus.
