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Intermediate Microeconomcis A Midterm Practice Questions & Answers

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ntermediate Microeconomcis A Midterm Practice Questions Chapter 1 1. The problem of scarcity a. arises only in poor countries. b. exists because the price of goods is too high. c. exists because ... of limited resources. d. will eventually be solved by better planning. ANSWER: c POINTS: 1 2. If society is producing a combination of goods on its production possibilities frontier a. it must be employing all available resources. b. it must be growing. c. it is using all the available natural resources but may not be using all available labor resources. d. Both a and b. ANSWER: a POINTS: 1 3. The slope of the production possibility frontier shows a. how inputs must be changed to keep them fully employed. b. the technically efficient combinations of the two goods. c. how demanders are willing to trade one good for another. d. the opportunity cost of one good in terms of the other. ANSWER: d POINTS: 1 4. Positive economic analysis a. involves the study of firms with positive profits. b. involves how resources are actually used in an economy. c. involves judgments on how resources should be used in an economy. d. is usually thought to be a waste of time. ANSWER: b POINTS: 1 5. A major problem that may occur with models that predict the values of economic variables in the future is that a. researchers are pessimistic about the future. b. the model may fail to acknowledge that economic actors will change their behavior in response to changing situations. c. the model may make predictions that conflict with widely held opinions. d. no one cares about these predictions. ANSWER: b POINTS: 1 6. For the equation the point , a. yields a value of . b. lies below the contour line that includes the point , . c. lies on the same contour line as the point , . d. Both a and b. ANSWER: d POINTS: 1 7. If the production possibilities frontier can be expressed as then the point ; is a. outside the production possibilities frontier b. on the production possibilities frontier c. inside the production possibilities frontier d. in the wrong quadrant to be on the graph ANSWER: a POINTS: 1 8. Suppose and . The equilibrium quantity is a. 2 b. 3 c. 4 d. 5 ANSWER: c POINTS: 1 9. The Ricardian notion that of diminishing returns implies that a. as more input is used more output will be made. b. as more input is used less output will be made. c. as more input is used the increase in output will increase. d. as more input is used the increase in output will decrease. ANSWER: d POINTS: 1 [Show More]

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