1. The three fundamental economic questions of what, how, and for whom:
a-exist because of scarcity.
b-are much more serious in a socialist system.
c-are not serious in a capitalistic system.
d-are not relevant in the industrialized world of today.
2.When the market price is established where demand and supply curves intersect:
a-consumer buying tends to exceed the quantity producers supply.
b-the quantity consumers demand generally fall short of the quantity producers supply.
c-the quantity demanded and the quantity supplied are equal.
d-all of the above will result.
3. The costs incurred by a firm in its use of variable factors of production are:
a-total costs.
b-marginal costs.
c-variable costs.
d-fixed costs.
4. An example of capital is:
a-cash.
b-a factory building.
c-money in a checking account.
d-the existing state of technology.
5. In a perfectly competitive labor market, each firm can hire:
a- only a fixed amount of labor at the going wage.
b-all the labor it wants, but only by outbidding its competitors.
c- larger quantities of labor at rising wages per worker.
d-larger quantities of labor at going market wages per worker.
6. The fact that a Giffen good might exist:
a-negates the law of demand.
b-does not negate the law of demand.
c-meas that the law of demand is fine in theory but not valid in the real world.
d-negates the law of increasing cost.
7. When supply and demand are in equilibrium, the price of a good is:
a-greater than the marginal utility of the good.
b-equal to the marginal utility of the good.
c-less than the marginal utility of the good.
d-not necessarily any of the above.