ECON 101 Midterm
Part 1 of 1 –
Question 1 of 20
Economics is the study of:
A.increasing the level of productive resources so there is maximum output in society.
B.increasing the level of productive resources so there is a minimum level of income.
C.how people, institutions, and society make choices under conditions of scarcity.
D.the efficient use of scarce resources paid for at the minimum level of cost to consumers and businesses.
Question 2 of 20
Which of the following is not a central focus of the “economic perspective”?
A.Scarcity and choice.
B.The scientific method.
Question 3 of 20
The satisfaction or pleasure one gets from consuming a good or service is:
Question 4 of 20
The private ownership of property resources and use of prices to direct and coordinate economic activity is characteristic of:
A.a command system.
B.a market system.
Question 5 of 20
Which statement best describes a capitalist economy?
A.The production of goods and services is determined primarily by markets, but the allocation of goods and services is determined primarily by government.
B.The production of goods and services is determined primarily by government, but the allocation of goods and services is determined primarily by markets.
C.The production and allocation of goods and services is determined primarily through markets.
D.The production and allocation of goods and services is determined primarily through government.
Question 6 of 20
Capitalism is an economic system that:
A.produces more capital goods than consumer goods.
B.produces more consumer goods than capital goods.
C.gives the government the right to tax individuals and corporations.
D.private individuals and corporations the right to own productive resources.
Question 7 of 20
In a market system, well-defined property rights are important because they:
A.reduce unnecessary investment.
C.create economic problems.
D.encourage economic activity.
Question 8 of 20
If two goods are complements:
B.an increase in the price of one will increase the demand for the other.
C.a decrease in the price of one will increase the demand for the other.
Question 9 of 20
When the price of a product is increased 10 percent, the quantity demanded decreases 15 percent. In this range of prices, demand for this product is:
Question 10 of 20
Demand can be said to be inelastic when:
A.an increase in price results in a reduction in total revenue.
B.a reduction in price results in an increase in total revenue.
C.a reduction in price results in a decrease in total revenue.
D.the elasticity coefficient exceeds one.
Question 11 of 20
Economic growth is shown by a shift of the production possibilities curve outward and to the right.
Question 12 of 20
The four factors of production are land, labor, capital, and government services.
Question 13 of 20
If demand increases and supply simultaneously decreases, equilibrium price will rise.
Question 14 of 20
Property rights have a positive effect in a market economy because they encourage owners to maintain their property.
Question 15 of 20
In the price range where demand is inelastic, a decrease in price will result in a decrease in total revenue.
Question 16 of 20
Price elasticity of supply decreases the longer the time period.
Question 17 of 20
Toothpaste and toothbrushes are substitute goods.
Question 18 of 20
A government-set price ceiling will lower equilibrium price and quantity in a market.
Question 19 of 20
Under what elasticity conditions would the following be true?
Question 20 of 20
The market for gasoline has changed in a couple significant ways over the last few years: new technologies have decreased the costs associated with producing gasoline, and automobiles are becoming more fuel efficient. Describe how these changes affect the supply of and demand for gasoline. What is the overall effect on equilibrium price?
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