GMS 402 Midterm Exam Study Set With
Complete Solutions
A theory is (a) an assumption, (b) an "if then "proposition, (c) a hypothesis, or (d) a
validated hypothesis. - ANSWER (d) a validated hypothesis.
A hypothesis is tested by (a) the realism of its assumption(s), (b) the lack of realism of its
assumption(s), (c) its ability to predict accurately an outcome that follows logically from
the assumption (s), or (d) none of the above. - ANSWER (c) its ability to predict
accurately an outcome that follows logically from the assumption (s)
The meaning of the word "economic" is most closely associated with the word (a) free,
(b) scarce, (c) unlimited, or (d) unrestricted. - ANSWER (b) scarce
In a free enterprise economy, the problems of what, how, and for whom are solved by (a)
a planning committee, (b) the elected representative of the people, (c) the price
mechanism or (d) none of the above. - ANSWER (c) the price mechanism
A market (a) necessarily refers to a meeting place between buyers and sellers, (b)does
not necessarily refer to a meeting place between buyers and sellers, (c) extends over the
entire nation, (d) extends over a city. - ANSWER (b)does not necessarily refer to a
meeting place between buyers and sellers
A function refers to (a) the demand for a commodity, (b) the supply of a commodity, (c)
the demand and supply of a commodity, service, or resource, or (d) the relationship
, between one dependent variable and one or more independent variables. - ANSWER (d)
the relationship between one dependent variable and one or more independent
variables.
The market equilibrium for a commodity is determined by (a) the market demand for the
commodity, (b) the market supply of the commodity, (c) the balancing of the forces of
demand and supply for the commodity, or (d) any of the above. - ANSWER (c) the
balancing of the forces of demand and supply for the commodity
Which of the following is incorrect? a)Microeconomics is concerned primarily with the
problem of what, how, and for whom to produce. b) Microeconomics is concerned
primarily with the economics behavior of individual decision making units when at
equilibrium. c) Microeconomics is concerned primarily with the time path and process by
which one equilibrium position evolves into another. d) Microeconomics is concerned
primarily with comparative statics rather than dynamics. - ANSWER Microeconomics is
concerned primarily with the time path and process by which one equilibrium position
evolves into another.
A fall in the price of a commodity, holding everything else constant, results in and is
referred to as (a) an increase in demand, (b) a decrease in demand, (c) an increase in the
quantity demanded, or (d) a decrease in the quantity demanded. - ANSWER (c) an
increase in the quantity demanded,
When an individual's income rises (while everything else remains constant), that person's
demand for a normal good (a) rises, (b) falls, (c) remains the same, (d) any of the above. -
ANSWER (d) any of the above.
Complete Solutions
A theory is (a) an assumption, (b) an "if then "proposition, (c) a hypothesis, or (d) a
validated hypothesis. - ANSWER (d) a validated hypothesis.
A hypothesis is tested by (a) the realism of its assumption(s), (b) the lack of realism of its
assumption(s), (c) its ability to predict accurately an outcome that follows logically from
the assumption (s), or (d) none of the above. - ANSWER (c) its ability to predict
accurately an outcome that follows logically from the assumption (s)
The meaning of the word "economic" is most closely associated with the word (a) free,
(b) scarce, (c) unlimited, or (d) unrestricted. - ANSWER (b) scarce
In a free enterprise economy, the problems of what, how, and for whom are solved by (a)
a planning committee, (b) the elected representative of the people, (c) the price
mechanism or (d) none of the above. - ANSWER (c) the price mechanism
A market (a) necessarily refers to a meeting place between buyers and sellers, (b)does
not necessarily refer to a meeting place between buyers and sellers, (c) extends over the
entire nation, (d) extends over a city. - ANSWER (b)does not necessarily refer to a
meeting place between buyers and sellers
A function refers to (a) the demand for a commodity, (b) the supply of a commodity, (c)
the demand and supply of a commodity, service, or resource, or (d) the relationship
, between one dependent variable and one or more independent variables. - ANSWER (d)
the relationship between one dependent variable and one or more independent
variables.
The market equilibrium for a commodity is determined by (a) the market demand for the
commodity, (b) the market supply of the commodity, (c) the balancing of the forces of
demand and supply for the commodity, or (d) any of the above. - ANSWER (c) the
balancing of the forces of demand and supply for the commodity
Which of the following is incorrect? a)Microeconomics is concerned primarily with the
problem of what, how, and for whom to produce. b) Microeconomics is concerned
primarily with the economics behavior of individual decision making units when at
equilibrium. c) Microeconomics is concerned primarily with the time path and process by
which one equilibrium position evolves into another. d) Microeconomics is concerned
primarily with comparative statics rather than dynamics. - ANSWER Microeconomics is
concerned primarily with the time path and process by which one equilibrium position
evolves into another.
A fall in the price of a commodity, holding everything else constant, results in and is
referred to as (a) an increase in demand, (b) a decrease in demand, (c) an increase in the
quantity demanded, or (d) a decrease in the quantity demanded. - ANSWER (c) an
increase in the quantity demanded,
When an individual's income rises (while everything else remains constant), that person's
demand for a normal good (a) rises, (b) falls, (c) remains the same, (d) any of the above. -
ANSWER (d) any of the above.
