ECON MIDTERM

Question 1

Which of the following describes the effects of price floors on the US sugar industry

Answer 1

They helped sugar farmers while increasing the price of sugar for consumers

Question 2

A market structure in which only a few large sellers dominate the market and have the ability to affect prices is a

Answer 2

Oligopoly

Question 3

What do most economists believe is the most efficient way to allocate resources

Answer 3

Competitive markets

Question 4

Price x quantity=

Answer 4

Total revenue

Question 5

Which of these could a firm accomplish during a short-run production period

Answer 5

Hiring and firing of workers

Question 6

Which of these BEST describes the influence of high prices on the behavior of producers

Answer 6

They are an incentive for producers to produce more

Question 7

Which of these best describes the influence of high prices on the behavior of producers

Answer 7

Incentive for producers to produce more

Question 8

Which of these results from the repeal of an item’s subsidies

Answer 8

A leftward shift of that items supply curve

Question 9

What is the relationship between income and demand for normal goods

Answer 9

An increase in income increases demand

Question 10

How does the government operate in a free-enterprise economy

Answer 10

It establishes laws and rules to maintain competition

Question 11

How does the government operate in a free-enterprise economy

Answer 11

It establishes laws and rules to maintain competition

Question 12

Protection from layoffs, illness, injuries, or disabilities fails under the goal of

Answer 12

Economy security

Question 13

What is the name of the federal insurance program for senior citizens

Answer 13

Medicare

Question 14

Which of the following statements describes why a nation with a command economy might resist a shift to a free market

Answer 14

People who hold political power are threatened by fundamental change

Question 15

Which of the following is a disadvantage of a market economy

Answer 15

It contains a high degree of uncertainty

Question 16

Which statement describes a disadvantage of a command economy

Answer 16

Nothing stops the government from making things that people don’t desire

Question 17

When an economy produces a combination of goods that lies on the production possibilities frontier

Answer 17

Resources are being used fully and efficiently

Question 18

When opportunity cost is constant across all production levels, the production possibilities frontier is

Answer 18

A straight downward sloping line

Question 19

When opportunity cost is constant across all production levels, the productions possibilities frontier is

Answer 19

A straight downward-sloping line

Question 20

Production possibilities frontier are concave to the origin because

Answer 20

The law of increasing costs

Question 21

The primary focus of microeconomics is

Answer 21

Individual units within the overall economy

Question 22

Which of the following statements is positive

Answer 22

New technologies will expand the production possibilities frontier