ECO312 Devry Midterm Exam Latest 2015

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DevryECO312MidtermExamLatest 2015QuestionQuestion 1. Question : (TCO 1) As a consequence of the condition of scarcitythere is never enough of anything.production has to be centrally planned.things which are plentiful have relatively highprices.individuals and communities have to make choices from among alternatives.Chapter 1Points Received:Comments:Question 2. Question : (TCO 1) The idea in economics that "there is no free lunch" means thatbusinesses 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 1Points Received:Comments:Question 3. Question : (TCO 1) Which situation would most likely cause a nation's productionpossibilities curve to shift inward?The construction of more capital goodsAn increase in discrimination based on raceAn increase in the number of skilled immigrant workersThe destruction from bombing and warfare in a losing military conflictChapter 1Points Received:Comments:Question 4. Question : (TCO 1) Which expression is another way of saying "marginal cost"?Scarce resourcesAdditional costOpportunity cost

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Unrecognized costChapter 1Points Received:Comments:Question 5. Question : (TCO 1) Which would not be considered as a capital resource of abusiness by an economist?A van used by amother to transport the family aroundAn office computer used by an accountantA crane used by a building contractorA razor used by a barberChapter 1Points 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 servicesare calledresource markets.product markets.command markets.mixed markets.Chapter 2Points Received:Comments:Question 8. Question : (TCO 1) Consumers express self-interest when they

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seek the lowest price for a product.reduce business losses.collect economic profits.search for jobs with thehighest wages.Chapter 2Points Received:Comments:Question 9. Question : (TCO 1) Which is one of the five fundamental questions that need to bedealt 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 2Points Received:Comments:Question 10. Question : (TCO 1) A major problem with state ownership of resources is that itdoes notallow 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 2Points 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.

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PointsReceived:Comments:Question 12. Question : (TCO 2) At the point where the demand and supply curves intersectthe 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 3Points Received:Comments:Question 13. Question : (TCO 2) Which of the following is a consequence of rent controlsestablished to keep housing affordable for the poor?Less rental housing is available as prospective landlords find it unprofitable to rent at restrictedprices.The quality of rental housing declines as landlords lack the funds and incentive to maintainproperties.Apartment buildings are torn down in favor of office buildings, shopping malls, and otherbuildings where rents are not controlled.All of the above are consequences of rent controls.Chapter 3Points Received:Comments:Question 14. Question : (TCO 2) A headline reads "Lumber Prices Up Sharply." In a competitivemarket, 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 ofnew homes and increase in quantity.Chapter 3Points Received:Comments:

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Question 15. Question : (TCO 2) If Product Y is an inferior good, a decrease in consumerincomes willmake 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 3Points Received:Comments:Question 16. Question : (TCO 2) If the price-elasticity coefficient for a good is .75, the demandfor that good is described asnormal.elastic.inferior.inelastic.Chapter 4Points Received:Comments:Question 17. Question : (TCO 2) Demand is said to be inelastic whenan 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 4Points Received:Comments:Question 18. Question : (TCO 2) You are the sales manager for a software company and havebeen 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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