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ECO213 Midterm Review TFC Exam with complete solutions 2024_2025
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ECO213 Midterm Review TFC Exam with complete solutions 2024_2025
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ECO213 Midterm Review TFC Exam withcomplete solutions 2024/2025
Every economy must answer each of the following questions except one. Which
is the exception?
a) Which goods will be produced?
b) Why are these particular goods produced?
c) Which 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) owners of sole proprietorships generally have very little control over how they
operate their businesses
e) owners of sole proprietorships generally find it difficult to negotiate separation
agreements with the other partners in the firm - ANSWER-c) owners of sole
proprietorships can lose all their personal assets if the business is sued or fails
, 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 numerous 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) tasks can be assigned according to individual tastes and abilities
d) specialization of labor allows for the introduction of cheaper, less
sophisticated production techniques
e) workers who repeatedly perform the same tasks become bored - ANSWER-c)
tasks can be assigned according to individual tastes and abilities
In a command economy ___
a) no individual or group 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
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