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ECO213 Midterm Review TFC Exam
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ECO213 Midterm Review TFC Exam 2024-2025Each of the following questions must be answered by every economy except one. Which
is the exception?
a) What goods will be produced?
b) Why are these goods produced?
c) What resources should be used?
d) Who will actually consume the goods produced?
e) How should resources be combined to produce each product? - Answer b) Why are
these particular goods produced?
One disadvantage of a sole proprietorship as a form of business organization is that
a) sole proprietorships cannot lower the transaction costs associated with contracting
with resource owners
b) sole proprietorships are less efficient than corporations, because they are less
specialized in production
c) owners of sole proprietorships can lose all their personal assets if the business is
sued or fails
d) sole proprietorships are usually owned by persons who have very little control over
how to operate their businesses
e) it is usually hard for the owners of a sole proprietorship to negotiate separation
agreements with the other partners in the firm - Answer c) the owners of a sole
proprietorship may lose all their personal assets in the event that the business gets
sued or goes bankrupt
Points inside the production possibilities frontier represent ___
, a) the most desirable combinations of outputs
b) inefficiency or unemployment-or both
c) currently unattainable combinations of outputs
d) currently unattainable combinations of resources
e) full and efficient use of all resources
Answer b) inefficiency or unemployment-or both
Division of labor increases productivity because ___
a) each worker must learn each of the many tasks in the total production process
b) managers can force workers to produce goods that are valued more highly than the
costs of producing them.
c) jobs can be assigned to people according to their preferences and talents
d) division of labor permits the use of cheaper, simpler technology
e) workers who do the same task over and over become bored - Answer c) jobs can be
assigned to people according to their preferences and talents
In a command economy ___
a) no one coordinates the economy
b) public ownership of resources is combined with free markets to direct economic
activity
c) owners can sell their resources to the highest bidder
d) in theory, individual choices are reflected in collective decisions, and decisions are
made by central planners
e) a dictator makes every economic decision - Answer d) in theory, individual choices
are reflected in collective decisions, and decisions are made by central planners
Over the last several decades, international trade has been
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