Econ 201 First midterm
Microeconomics 201
First Midterm Chapter 1 Introduction: What Is Economics? 1.1 What Is
Economics?
1)
Which of the following is n o t a factor of production?
A) money
B) human capital
C) physical capital
D) labor
Answer: A
2)
An arrangement that allows buyers and sellers to exchange things is called:
A) a contract.
B) money.
C) efficient.
D) a market. Answer: D
3)
Economics is best defined as the study of:
A) financial decision‑making.
B) how consumers make purchasing decisions.
C) choices made by people faced with scarcity.
D) inflation, unemployment, and economic growth.
Answer: C
4)
Which of the following is an example of a normative question?
A) How will an increase in the price of gasoline affect taxi drivers?
B) Should the government provide free prescription drugs to senior citizens?
C) What fraction of an income‑tax cut will be spent on consumer goods?
D) How will an increase in the minimum wage affect teenaged workers?
Answer: B Page 1
5)
An economic model is
A) a small but completely working economy.
B) a simplified representation of an economic environment.
C) any graph.
D) all of the above.
Answer: B
6)
When economists assume that people are rational and respond to incentives, they mean:
E) people act with kindness.
F) people are altruistic.
G) people act in their own self‑interest.
H) none of the above
Answer: C
7)
Ceteris paribus is the Latin expression meaning:
A) let buyer beware.
B) think at the margin.
C) for every action there is an equal and opposite reaction.
D) other variables are held fixed.
Answer: D 8)
The slope of a straight line is
A) the variable on the vertical axis divided by the variable on the horizontal axis.
B) the variable on the horizontal axis divided by the variable on the vertical axis.
C) the run over the rise.
D) rise over the run.
Answer: D
9)
If a variable is 100 and then decreases to 60, then using the
First Midterm Chapter 1 Introduction: What Is Economics? 1.1 What Is
Economics?
1)
Which of the following is n o t a factor of production?
A) money
B) human capital
C) physical capital
D) labor
Answer: A
2)
An arrangement that allows buyers and sellers to exchange things is called:
A) a contract.
B) money.
C) efficient.
D) a market. Answer: D
3)
Economics is best defined as the study of:
A) financial decision‑making.
B) how consumers make purchasing decisions.
C) choices made by people faced with scarcity.
D) inflation, unemployment, and economic growth.
Answer: C
4)
Which of the following is an example of a normative question?
A) How will an increase in the price of gasoline affect taxi drivers?
B) Should the government provide free prescription drugs to senior citizens?
C) What fraction of an income‑tax cut will be spent on consumer goods?
D) How will an increase in the minimum wage affect teenaged workers?
Answer: B Page 1
5)
An economic model is
A) a small but completely working economy.
B) a simplified representation of an economic environment.
C) any graph.
D) all of the above.
Answer: B
6)
When economists assume that people are rational and respond to incentives, they mean:
E) people act with kindness.
F) people are altruistic.
G) people act in their own self‑interest.
H) none of the above
Answer: C
7)
Ceteris paribus is the Latin expression meaning:
A) let buyer beware.
B) think at the margin.
C) for every action there is an equal and opposite reaction.
D) other variables are held fixed.
Answer: D 8)
The slope of a straight line is
A) the variable on the vertical axis divided by the variable on the horizontal axis.
B) the variable on the horizontal axis divided by the variable on the vertical axis.
C) the run over the rise.
D) rise over the run.
Answer: D
9)
If a variable is 100 and then decreases to 60, then using the