Devry ECO312 Midterm Exam Latest 2015
Question
Question 1. Question : (TCO 1) As a consequence of the condition of scarcity
there is never enough of anything.
production has to be centrally planned.
things which are plentiful have relatively high prices.
individuals and communities have to make choices from among alternatives.
Chapter 1
Points Received:
Comments:
Question 2. Question : (TCO 1) The idea in economics that "there is no free lunch" means that
businesses would go bankrupt if they offered free lunches.
the thought of a free lunch is often better than the reality of consuming it.
there are opportunity costs involved when scarce resources are used up for "free" lunches.
businesses use free lunches to attract customers but this advertising practice is inefficient.
Chapter 1
Points Received:
Comments:
Question 3. Question : (TCO 1) Which situation would most likely cause a nation's production
possibilities curve to shift inward?
The construction of more capital goods
An increase in discrimination based on race
An increase in the number of skilled immigrant workers
The destruction from bombing and warfare in a losing military conflict
Chapter 1
Points Received:
Comments:
Question 4. Question : (TCO 1) Which expression is another way of saying "marginal cost"?
Scarce resources
Additional cost
Opportunity cost

Unrecognized cost
Chapter 1
Points Received:
Comments:
Question 5. Question : (TCO 1) Which would not be considered as a capital resource of a
business by an economist?
A van used by a mother to transport the family around
An office computer used by an accountant
A crane used by a building contractor
A razor used by a barber
Chapter 1
Points Received:
Comments:
Question 6. Question : (TCO 1) The economy of Germany would best be classified as:
a command system.
socialism.
pure capitalism.
a market system.
Chapter 2.
Points Received:
Comments:
Question 7. Question : (TCO 1) Markets in which firms sell their output of goods and services
are called
resource markets.
product markets.
command markets.
mixed markets.
Chapter 2
Points Received:
Comments:
Question 8. Question : (TCO 1) Consumers express self-interest when they

seek the lowest price for a product.
reduce business losses.
collect economic profits.
search for jobs with the highest wages.
Chapter 2
Points Received:
Comments:
Question 9. Question : (TCO 1) Which is one of the five fundamental questions that need to be
dealt with in any economic system?
What makes the rate of unemployment low?
Who will be the richest group in the economy?
What goods and services will be produced?
How high should the prices of goods and services be?
Chapter 2
Points Received:
Comments:
Question 10. Question : (TCO 1) A major problem with state ownership of resources is that it
does not
allow for the full use of central economic planning.
let state enterprises buy resources used to make products.
let state enterprises sell products produced with those resources.
give incentives for individuals to make the best use of those resources.
Chapter 2
Points Received:
Comments:
Question 11. Question : (TCO 2) An increase in product price will cause:
quantity demanded to decrease.
quantity supplied to decrease.
quantity demanded to increase.
the supply curve to shift to the left.
Chapter 3.

Points Received:
Comments:
Question 12. Question : (TCO 2) At the point where the demand and supply curves intersect
the buying and selling decisions of consumers and producers are inconsistent with one another.
the market is in disequilibrium.
there is neither a surplus nor a shortage of the product.
quantity demanded exceeds quantity supplied.
Chapter 3
Points Received:
Comments:
Question 13. Question : (TCO 2) Which of the following is a consequence of rent controls
established to keep housing affordable for the poor?
Less rental housing is available as prospective landlords find it unprofitable to rent at restricted
prices.
The quality of rental housing declines as landlords lack the funds and incentive to maintain
properties.
Apartment buildings are torn down in favor of office buildings, shopping malls, and other
buildings where rents are not controlled.
All of the above are consequences of rent controls.
Chapter 3
Points Received:
Comments:
Question 14. Question : (TCO 2) A headline reads "Lumber Prices Up Sharply." In a competitive
market, this situation would lead to a(n)
increase in the price and quantity of new homes.
decrease in the price and quantity of new homes.
increase in the price of new homes and decrease in quantity.
decrease in the price of new homes and increase in quantity.
Chapter 3
Points Received:
Comments:

Question 15. Question : (TCO 2) If Product Y is an inferior good, a decrease in consumer
incomes will
make buyers want to buy less of Product Y.
not affect the sales of Product Y.
shift the demand curve for Product Y to the left.
shift the demand curve for Product Y to the right.
Chapter 3
Points Received:
Comments:
Question 16. Question : (TCO 2) If the price-elasticity coefficient for a good is .75, the demand
for that good is described as
normal.
elastic.
inferior.
inelastic.
Chapter 4
Points Received:
Comments:
Question 17. Question : (TCO 2) Demand is said to be inelastic when
an increase in price results in a reduction in total revenue.
a reduction in price results in an increase in total revenue.
a reduction in price results in a decrease in total revenue.
the elasticity coefficient exceeds one.
Chapter 4
Points Received:
Comments:
Question 18. Question : (TCO 2) You are the sales manager for a software company and have
been informed that the price elasticity of demand for your most popular software is less than 1.
To increase total revenues, you should:
increase the price of the software.
decrease the price of the software.

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