1. Among competing issues, the most important concern of economics is with the: correct answers B. efficient use of limited productive resources to satisfy economic wants.
2. As a consequence of the condition of scarcity: correct answers D. individuals and communities have to make choices from a...
MBA 5200 Practice Exam 1 || Already Passed.
1. Among competing issues, the most important concern of economics is with the: correct
answers B. efficient use of limited productive resources to satisfy economic wants.
2. As a consequence of the condition of scarcity: correct answers D. individuals and communities
have to make choices from among alternatives.
3. According to the Gates, Winfrey, and Rodriguez illustration: correct answers C. Opportunity
costs vary greatly between individuals and matter in decision making.
4. Which expression is another way of saying "marginal cost"? correct answers B. additional cost
5. When an economist says that there is "too much of a good thing," the economist is suggesting
that: correct answers D. the marginal benefit of the thing is less than the marginal cost.
6. Economic models do not reflect the full complexity of reality and instead are based on: correct
answers B. purposeful simplifications.
7. Which question is an example of a microeconomic question? correct answers B. Will the
merger of two airlines likely result in higher airline ticket prices?
8. The branch of economics that focuses primarily on aggregates is: correct answers A.
macroeconomics.
9. Which would be considered a macroeconomic study? A study of the effect of: correct answers
B. changing government spending to increase employment.
10. If a consumer has an income of $200, the price of X is $5, and the price of Y is $10, the
maximum quantity of X the consumer is able to purchase is: correct answers D. 40.
11. The individual who brings together economic resources and assumes the risk in a capitalist
economy is called the: correct answers B. entrepreneur.
12. Which is not considered to be an economic resource? correct answers B. Money
13. On a production possibilities curve, the optimal or best combination of output for any
society: correct answers D. depends upon the preferences of society.
14. A point inside the production possibilities curve is: correct answers B. attainable, but the
economy is inefficient.
15. The production possibilities table below shows the hypothetical relationship between the
production of capital goods and consumer goods in an economy. Refer to the table above. What
is the opportunity cost of producing the first three units of capital goods? correct answers C. 15
units of consumer goods
, 16. Which statement is an economic rationale for the law of increasing opportunity cost? correct
answers B. Many economic resources are better at producing one product than another.
17. In a production possibilities table, the most-valued or optimal point for society is determined
by: correct answers C. the equality of marginal benefits and marginal costs.
18. All of the following would affect the position of a country's production possibilities curve,
except: correct answers B. the level of unemployment.
19. Which situation would most likely cause a nation's production possibilities curve to shift
inward? correct answers D. The destruction from bombing and warfare in a losing military
conflict
20. Refer to the above graph. Assume that before the Persian Gulf War, Iraq's production
possibilities were represented by AB. Which line on the above graph would represent the change
in Iraq's production possibilities after the war? correct answers D. AB to EF
21. Which statement best describes a command economy? correct answers D. The production
and allocation of goods and services is determined primarily through government.
22. A basic characteristic of a command system is that: correct answers B. government owns
most economic resources.
23. The economy of North Korea would best be classified as: correct answers B. a command
system.
24. Legal and social rules that affect the ownership of property are: correct answers A. property
rights.
25. Competition is more likely to exist when: correct answers A. there is free entry into and exit
out of industries.
26. Which is assumed to be most limited in scope under a market system? correct answers D.
Government.
27. Which statement best describes a capitalist economy? correct answers A. Society determines
production and the allocation of goods and services only through markets.
28. An economic system in which money is not used is a: correct answers D. barter economy.
29. Consider a barter situation where you have pens and you want pencils. To achieve your
objective there must be a(n): correct answers D. coincidence of wants.
30. Why might a company use barter rather than money to make a transaction? correct answers
B. Barter can enable two firms to trade when their cash flows are limited.
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