ECON 212 - Test 1 || WITH 100% PASSED ANSWERS
Suppose that an economy is producing on its production possibilities curve but is not
producing quantities of each good where the marginal benefit equals the marginal cost for
each good. This economy . . . correct answers can improve its allocation by producing more
of one good and less of the other.
The economizing problem is one of deciding how to make the best use of . . . correct answers
limited resources to satisfy virtually unlimited wants.
In moving along a given budget line . . . correct answers each point on the line will be equally
satisfactory to consumers.
Which of the following will not produce an outward shift of the production possibilities
curve? correct answers reducing unemployment
The Latin term "ceteris paribus" means correct answers other things equal
Microeconomics is concerned with . . . correct answers a detailed examination of specific
economic units that make up the economic system.
Which of the following is not considered by economists to be an economic resource? correct
answers money
Consumers spend their incomes to get the maximum benefit or satisfaction from the goods
and services they purchase. What is this a reflection of . . . correct answers resource scarcity
and the necessity of choice.
The main function of the entrepreneur is to . . . correct answers innovate.
Which of the following is a positive statement? correct answers The temperature is 92
degrees today.
The market system . . . correct answers effectively harnesses the incentives of workers and
entrepreneurs.
Which of the following is not one of the five fundamental questions? correct answers What
prices will be charged for goods and services?
In a market system, employees and suppliers . . . correct answers are usually shielded from
risk, but at the cost of not sharing in the profits of the firm.
The coordination problem in the centrally planned economies refers to the idea that . . .
correct answers planners had to direct required inputs to each enterprise.
An increase in consumer desire for strawberries is most likely to . . . correct answers increase
the number of strawberry pickers needed by farmers.
Economic profits and losses . . . correct answers are essential to the reallocation of resources
from less desired to more desired goods.
, The two basic markets shown by the simple circular flow model are . . . correct answers
household and business
From society's point of view, the economic function of profits and losses is to . . . correct
answers reallocate resources from less-desired to more-desired.
Which of the following characteristics is lease unique to a market system? correct answers
the widespread use of money
Private property . . . correct answers encourages owners to maintain or improve their property
so as to preserve or enhance value.
Two major virtues of the market system are that it . . . correct answers allocates resources
efficiently and allows economic freedom.
The invisible hand refers to the . . . correct answers notion that, under competition, decisions
motivated by self-interest promote the social interest.
The economic function of profits and losses is to . . . correct answers signal that the resources
should be reallocated.
In a market economy, the distribution of output will be determined primarily by . . . correct
answers the quantities and prices of the resources that households supply.
Specialization in production is important primarily because it . . . correct answers results in
greater total output.
An economic system . . . correct answers is a particular set of institutional arrangements and a
coordinating mechanism used to respond to the economizing problem.
Economic systems differ according to which two main characteristics? correct answers the
technology used in production and the quantity of natural resources
Economic profits and losses . . . correct answers are essential to the reallocation of resources
from less desired to more desired goods.
In a market system, employees and suppliers . . . correct answers are usually shielded from
risk, but at the cost of not sharing in the profits of the firm.
Command systems are also known as . . . correct answers communism
In the resource market . . . correct answers households sell resources to businesses
private property . . . correct answers encourages owners to maintain or improve their property
so as to preserve or enhance value.
The use of money contributes to economic efficiency because . . . correct answers it promotes
specialization by overcoming the problems with barter.
Suppose that an economy is producing on its production possibilities curve but is not
producing quantities of each good where the marginal benefit equals the marginal cost for
each good. This economy . . . correct answers can improve its allocation by producing more
of one good and less of the other.
The economizing problem is one of deciding how to make the best use of . . . correct answers
limited resources to satisfy virtually unlimited wants.
In moving along a given budget line . . . correct answers each point on the line will be equally
satisfactory to consumers.
Which of the following will not produce an outward shift of the production possibilities
curve? correct answers reducing unemployment
The Latin term "ceteris paribus" means correct answers other things equal
Microeconomics is concerned with . . . correct answers a detailed examination of specific
economic units that make up the economic system.
Which of the following is not considered by economists to be an economic resource? correct
answers money
Consumers spend their incomes to get the maximum benefit or satisfaction from the goods
and services they purchase. What is this a reflection of . . . correct answers resource scarcity
and the necessity of choice.
The main function of the entrepreneur is to . . . correct answers innovate.
Which of the following is a positive statement? correct answers The temperature is 92
degrees today.
The market system . . . correct answers effectively harnesses the incentives of workers and
entrepreneurs.
Which of the following is not one of the five fundamental questions? correct answers What
prices will be charged for goods and services?
In a market system, employees and suppliers . . . correct answers are usually shielded from
risk, but at the cost of not sharing in the profits of the firm.
The coordination problem in the centrally planned economies refers to the idea that . . .
correct answers planners had to direct required inputs to each enterprise.
An increase in consumer desire for strawberries is most likely to . . . correct answers increase
the number of strawberry pickers needed by farmers.
Economic profits and losses . . . correct answers are essential to the reallocation of resources
from less desired to more desired goods.
, The two basic markets shown by the simple circular flow model are . . . correct answers
household and business
From society's point of view, the economic function of profits and losses is to . . . correct
answers reallocate resources from less-desired to more-desired.
Which of the following characteristics is lease unique to a market system? correct answers
the widespread use of money
Private property . . . correct answers encourages owners to maintain or improve their property
so as to preserve or enhance value.
Two major virtues of the market system are that it . . . correct answers allocates resources
efficiently and allows economic freedom.
The invisible hand refers to the . . . correct answers notion that, under competition, decisions
motivated by self-interest promote the social interest.
The economic function of profits and losses is to . . . correct answers signal that the resources
should be reallocated.
In a market economy, the distribution of output will be determined primarily by . . . correct
answers the quantities and prices of the resources that households supply.
Specialization in production is important primarily because it . . . correct answers results in
greater total output.
An economic system . . . correct answers is a particular set of institutional arrangements and a
coordinating mechanism used to respond to the economizing problem.
Economic systems differ according to which two main characteristics? correct answers the
technology used in production and the quantity of natural resources
Economic profits and losses . . . correct answers are essential to the reallocation of resources
from less desired to more desired goods.
In a market system, employees and suppliers . . . correct answers are usually shielded from
risk, but at the cost of not sharing in the profits of the firm.
Command systems are also known as . . . correct answers communism
In the resource market . . . correct answers households sell resources to businesses
private property . . . correct answers encourages owners to maintain or improve their property
so as to preserve or enhance value.
The use of money contributes to economic efficiency because . . . correct answers it promotes
specialization by overcoming the problems with barter.
