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Ch.1,2,3,4

Submissionto

Yoursubmissionhasbeensaved!

Student:ALI,ALMUHANNA(aaalmuhanna13)
Date:04/28/201513:45
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1. Thetermmarketpowerrefersto
Afirm'sabilitytoalterthemarketpriceorquantityofagoodorservice.
Afirm'sabilitytoeliminatefreeriders.
Thegovernment'sauthoritytotaxbusinesses.
Thegovernment'sabilitytochangemarketoutcomes.
Marketpoweristheabilitytoalterthemarketpriceofagoodorservice.

2. Ameritgoodis
Agoodorservicethatsocietybelieveseveryoneisentitledtoaminimal
quantityof.
Agoodsocietyholdstoahigherstandardintaxregulations.
Incomepaymentsforwhichnogoodsorservicesareexchanged.
Aproductthatservesasanincentivetoproducemoreoutput.
Ameritgoodisagoodorservicethatsocietydeemseveryoneisentitledtosomeminimal
quantityof,suchasfood.

3. Whoparticipatesinmarkets?
Businessfirms.
Businessfirmsandconsumers.
Consumersandgovernmentagencies.
Allofthechoicesarecorrect.
Consumers,businessfirms,governmentagencies,andforeignersparticipateinthe
marketplace.

4. Amarketissaidtobeinequilibriumwhen
Thebuyingintentionsofallconsumersarerealized.
Thequantitydemandedequalsthequantitysupplied.
Thesupplyintentionsofallsellersarerealized.
Demandisfullysatisfiedatallalternativeprices.
Equilibriumoccursattheintersectionofthesupplyanddemandcurves.

5. Wheneconomistsdescribeaproductionprocessascapitalintensive,theymeanthatthe
Capitalusedintheprocesstendstowearout(depreciate)veryrapidly.
Processusesahighratioofmachineryandothercapitaltolabor.

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Capitalusedintheprocessreflectsthemostadvancedtechnology.
Processneedsagreateremphasisonlaborinordertoincreaseproductivity.
IntheUnitedStatesmuchproductioniscapitalintensive.

6. Aproductionpossibilitiescurveindicatesthe
Maximumcombinationsofgoodsandservicesaneconomycanproducegiven
itsavailableresourcesandtechnology.
Averagecombinationsofgoodsandservicesaneconomycanproducegivenits
availableresourcesandtechnology.
Maximumcombinationsofgoodsandservicesaneconomycanproducegiven
unlimitedresources.
Combinationsofgoodsandservicesaneconomyisactuallyproducing.
Theproductionpossibilitiescurveshowsusthepossiblechoiceswecanmakeinregardsto
whattoproduce.

7. Whichofthefollowingisnotoneofthethreecoreeconomicissuesthatmustberesolved?
Howtoproducethegoodsandservicesweselect.
Whoshouldgetthegoodsandservicesweproduce.
Whattoproducewithunlimitedresources.
Whattoproducewithlimitedresources.
Resourcesarenotunlimited.

8. Inamarketeconomy,thepeoplewhoreceivethegoodsandservicesthatareproducedare
thosewho
Havethemostpoliticalpower.
Arewillingtopaythehighestprice.
Needthegoodsandservicesthemost.
Wantthegoodsandservicesthemost.
Thosewhoplacelowvalueonthegoodsandserviceswillnotpartwiththeirmoneyfor
them,andwilllikelybeoutbidbythosewhovaluethemmore.

9. ThebestdefinitionofGDPis
Ameasureofthepercapitaeconomicgrowthrateoftheeconomy.
Thesumofthephysicalamountsofgoodsandservicesintheeconomy.
Aphysicalmeasureofthecapitalstockoftheeconomy.
Adollarmeasureoffinaloutputproducedduringagiventimeperiod.
GDPisameasureofhowwellanationisdoingeconomically,especiallyintermsofits
production.

10. Ifthereisasurplusatagivenprice,then
Themarketisinequilibriumatthatprice.

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Thepriceiszero.
Thatpriceisgreaterthantheequilibriumprice.
Thatpriceislowerthantheequilibriumprice.
Atpricesaboveequilibrium,quantitysuppliedwillbegreaterthanquantitydemanded,soa
marketsurpluswillexist.

11. Between1950and2010,mostofthegrowthinfederalexpenditureswasaresultofincreases
in
Directexpenditures.
Incometransfers.
Privatesectorpurchasesofgoodsandservices.
Publicsectorpurchasesofgoodsandservices.
Mostofthegrowthinfederalspendinghascomefromincreasedincometransfers,not
purchasesofgoodsandservices.

12. Ceterisparibusmeans
Holdingconstantthedeterminantofdemandorsupplythatyouareinterested
inexamining.
Changingpricestoseehowdemandorsupplyshifts.
Allowingthefreemarkettodecide,notgovernment.
Holdingeverythingconstantexceptforthevariablesyouareinterestedin
examining.
Ceterisparibusistheassumptionofnothingelsechanging.

13. Theroleoftheentrepreneurinaneconomyisto
Bringthefactorsofproductiontogetherandassumetheriskofproduction.
Workwithgovernmentplannerstodeterminewhatgoodsareproduced.
Arrangebankfinancingfortheownersofnewbusinesses.
Ensurefullemploymentoflabor.
Theentrepreneurisanimportantfactorofproductionandactstomobilizetheuseofother
resources.

14. Theprincipalmechanismforredistributingincomesis
Marketpower.
Thetaxandtransfersystem.
Theproductionofpublicgoods.
Antitrustpolicy.
Thetaxandtransfersystemistheprincipalmechanismforredistributingincomes.

15. Opportunitycostis
Thetotaldollarcosttosocietyofproducingthegoods.

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Thebestalternativethatmustbegivenupinordertogetsomethingelse.
Measuredonlyindollarsandcents.
Thedifficultyassociatedwithusingonegoodinplaceofanother.
Opportunitycostinvolvesthesacrificetogetsomethingelse.Opportunitycostismeasured
inbothrelativeresourcedollarcostandrelativetimelostofproducingalternativeoutput.

16. Marketfailureimpliesthatthemarketmechanism
Causesgovernmentfailure.
Causesshortagesorsurplusesinthemarket.
Leadstheeconomytothewrongmixofoutput.
Leadstheeconomytoapointoutsidetheproductionpossibilitiescurve.
Marketfailureisanimperfectioninthemarketmechanismthatpreventsoptimaloutcomes.

17. Economicgrowth
IsanincreaseinoutputorrealGDP.
Causesacontractionintheproductionpossibilitiescurve.
Involvesreducedcapacityintheshortrun.
Noneofthechoicesarecorrect.
Economicgrowthallowsmoreproductionandconsumption.

18. Ineconomics,apublicgood
Isanygoodproducedbythegovernment.
Hassocialcostsofproductionlowerthanprivatecostsofproduction.
Cannotbedeniedtoconsumerswhohavenotpaid.
Isprovidedinanoptimalamountbythemarket.
Apublicgoodisagoodorservicewhoseconsumptionisnonexcludable.

19. Toaneconomist,thefourfactorsofproductionare
Labor,workers,profit,andservices.
Land,labor,capital,andentrepreneurship.
Entrepreneurship,machinery,workers,andprofit.
Noneofthechoicesarecorrect.
Thegeneraltermsforthefourfactorsofproductionareland,labor,capital,and
entrepreneurship.

20. Governmentinterventiontoaltermarketstructureorpreventabuseofmarketpoweristhe
basicpurposeof
Meritgoods.
Antitrustpolicy.
Governmenttaxes.

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Socialdemand.
Antitrustisgovernmentinterventiontoaltermarketstructureorpreventabuseofmarket
power.

21. Theequilibriumpriceinamarketisfoundwhere
Themarketdemandcurveintersectstheyaxis.
Themarketsupplycurveintersectstheyaxis.
Themarketsupplycurveintersectsthexaxis.
Themarketsupplycurveintersectsthemarketdemandcurve.
Theintersectionofthedemandandsupplycurvesestablishestheequilibriumpriceand
output.

22. PercapitaGDPis
GDPdividedbytotalpopulation.
Thesumofconsumergoods,investmentgoods,governmentservices,andnet
exports.
Adollarmeasureoftheeconomicgrowthrateofacountry.
Thevalueofthefactorsofproductionusedtoproduceoutputinacountry.
PercapitaGDPisanimportantmeasureofeconomicwellbeing.

23. Humancapitalisdefinedasthe
Amountofmachinery,factories,andbuildingsanindividualowns.
Dollarvalueofallthestocksandbondsanindividualowns.
Knowledgeandskillsworkerspossess.
Noneofthechoicesarecorrect.
Humancapitalisanimportantfactorofproductionthatallowsgreaterproductivity.

24. Antitrustactivityaddresses
Marketpower.
Publicgoods.
Macroinstability.
Inequity.
Antitrustisgovernmentinterventiontoaltermarketstructureorpreventabuseofmarket
power.

25. Inamarketeconomy,producerswillproducethegoodsandservicesthat
Producerswanttopurchase.
Optimizeproducerutility.
Consumersneedthemost.
Consumersdemand.

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Pricesignalsinthemarketplacemovefactorsofproductionfromoneindustrytoanotherin
responsetoconsumerdemands.

26. Governmentfailuremayresultfrom
Outrightwasteofresourcesbythepublicsectorormisallocationofresources.
Operationalinefficiencybythepublicsectoronly.
Accuratevaluationsofbenefitsbutinaccuratevaluationsofcosts.
Misallocationofresourcesonly.
Governmentsfailuremayresultfromoutrightwaste(operationalinefficiency)orfroma
misallocationofresources.

27. Anexampleofapositiveexternalityis
Increasedfactoryuseofprivatesectorroboticsthatcamefromgovernment
research.
Increasedhealthproblemsfromairpollution.
Increasedbusinessprofitsatahardwarestorethatbenefitedfromatornado.
Noneofthechoicesarecorrect.
Anexternalityisanythingthataffectsathirdpartytoamarkettransaction.Eventhough
onemaybenefitfromit,anaturaldisasterisnotamarkettransaction.

28. Thetermopportunitycostreferstothe
Amountofresourcesusedtoproduceagoodbutnotaservice.
Valueofthebestalternativegivenupwhenagoodorserviceisproduced.
Financialcostsofallthefactorsofproductionusedtoproduceagoodor
service.
Valueofallthealternativesgivenupwhenagoodorserviceisproduced.
Opportunitycostreferstothemostdesiredgoodsorservicesforgone,notallthegoods
forgone,becausenotallchoiceswouldhavebeengivenupjustthebestalternative.

29. Businessfirmssupplygoodsandservicesto____andpurchasefactorsofproductionin____.
productmarketsfactormarkets
factormarketsnationalmarkets
nationalmarketsfactormarkets
factormarketsproductmarkets
Afactormarketiswherethefactorsofproduction(land,labor,orcapital)areboughtand
sold.Aproductmarketiswherefinishedgoodsandservicesareboughtandsold.Apairof
shoesisafinishedgood.

30. Externalities
Arethecostsorbenefitsofmarketactivitiesthat"spillover"ontothirdparties.
Occurbecauseofgovernmentfailure.
Occurbecauseofselfishconsumers.

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Occurbecausedemandishidden.
Externalitiesarecostsorbenefitsofamarketactivitybornebyathirdparty.

31. Whichcomponent(s)ofU.S.realGDPincreasedinsizerelativetototalU.S.realGDPfrom
1950to2000?
Onlyservices.
Agricultureandmanufacturing.
Onlymanufacturing.
Onlyagriculture.
Duetotechnologicaladvances,theagriculturalcomponentofU.S.realGDPhasshrunk
significantly,andwiththesignificantincreaseinpercapitaincomethedemandforservices
hasincreased.

32. Internationalparticipants
ParticipateonlyinAmericanfactormarkets.
TakenopartinAmericanmarkets.
ParticipateinbothAmericanfactormarketsandAmericanproductmarkets.
ParticipateonlyinAmericanproductmarkets.
InternationalparticipantstakepartintheU.S.marketbysupplyingimports,purchasing
exports,andbuyingandsellingfactorsofproduction.

33. Whichofthefollowingcountries(orregions)producesthemostoutputannually?
UnitedStates.
China.
Germany.
Japan.
TheUnitedStatesisthelargesteconomyintheworldbasedonGDP.

34. Thegoalofthebusinessfirmsinamarketeconomyistomaximize
Totalsales.
Totalwelfare.
Totalprofits.
Totalutility.
Businessesaremotivatedbyprofit.

35. Thetermexternalitiesrefersto
Blackmarketeconomicactivity.
Theimpactonmarketsofimportedgoods.
Theinequitabledistributionofincome.
Thecostsorbenefitsofamarketactivitybornebyathirdparty.

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Externalitiesarethingslikepollutionthathurtthirdparties.

36. Accordingtothelawofdemand,duringagivenperiodoftime,thequantityofagood
demanded
Doesnotchangewhenpricechanges.
Increasesasitspricerises,ceterisparibus.
Decreasesasitspricefalls,ceterisparibus.
Increasesasitspricefalls,ceterisparibus.
Quantitydemandedofanitemandpriceofthesameitemareinverselyrelated.

37. Thetermexternalitiesrefersto
Onlypositivebenefitsofamarketactivitybornebyathirdparty.
Onlynegativecostsofamarketactivitybornebyathirdparty.
Thenegativecostsandpositivebenefitsofamarketactivitybornebyathird
party.
Noneofthechoicesarecorrect.
Anexternalityisanythingthataffectsathirdpartytoamarkettransaction.

38. Thegoaloftheconsumerinamarketeconomyistousehisorherlimitedincometobuy
Thegoodsandservicesthatmaximizeprofitsforbusinesses.
Thosegoodsandserviceswiththelowestprices.
Thegreatestnumberofgoodsandservicespossible.
Thesetofgoodsandservicesthatmaximizestheconsumer'stotalutility.
Consumersaremotivatedbytheirdesiretomaximizeutility.

39. Thedoctrineoflaissezfaireisbasedonthebeliefthat
Governmentfailuredoesnotexist.
Governmentdirectivesarelikelytodoabetterjobofallocatingresourcesthan
markets.
Marketsarelikelytodoabetterjobofallocatingresourcesthangovernment
directives.
Marketsresultinanunfairdistributionofincome.
Millionsofindividualsmakingchoiceseverydaytendtodoabetterjobthanacentral
authority.

40. AdamSmith'sinvisiblehandisnowcalled
Themarketmechanism.
Opportunitycost.
Laissezfaire.
Economicgrowth.
AdamSmith'sinvisiblehandisnowcalledthemarketmechanism.

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41. HighU.S.incomeshaveledtothetransformationoftheUnitedStatesintoprimarily
Anagriculturaleconomy.
Aclosedeconomywithlittleforeigntrade.
Amanufacturingeconomy.
Aserviceeconomy.
Oncehouseholdshaveenoughfoodtheybegintodemandmoreconsumptionitemswithan
increasingpercentagebeingservices.

42. Intermsoftheproductionpossibilitiescurve,inefficiencyisrepresentedby
Allpointsoutsidethecurve.
Allpointsinsidethecurve.
Allpointsonthecurve.
Arightwardshiftofthecurve.
Atpointsinsidetheproductionpossibilitiescurve,wecangetmoreofonegoodwithout
sacrificinganyothergoods.

43. ThecurrentU.S.economyisbasedprimarilyontheproductionof
Goodsforfederalgovernmentuse.
Services.
Manufacturinggoods.
Agriculturalgoods.
ProductionintheU.S.economyismostlydirectedtowardservices.

44. Abuyerissaidtohaveademandforagoodonlywhen
Thebuyerisbothwillingandabletopurchasethegoodatalternativeprices.
Thebuyerwantstoownthegood.
Anadequatesupplyofthegoodisavailableforpurchase.
Thepriceofthegoodislowenough.
Demandistheabilityandwillingnesstobuyspecificquantitiesofagoodatalternative
pricesinagiventimeperiod,ceterisparibus.

45. Achangeinthepriceofagood
Resultsinachangeinquantitysupplied.
Isadeterminantofsupply.
Resultsinachangeinsupply.
Causesashiftinthesupplycurve.
Becausethesupplycurveshowsthequantitysuppliedatdifferentpricelevels,whenthe
pricechanges,wecantrackchangesinquantitysuppliedalongthesupplycurve.

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46. Whicheconomistarguedthatfreemarketsunleashedthe"animalspirits"ofentrepreneurs,
propellinginnovation,technology,andgrowth?
KennethOlsen.
IrvingFisher.
JohnMaynardKeynes.
LordKelvin.
Competitionleadscompaniestoalwaystrytodosomethingbetterandmoreefficientlyin
ordertomaximizeprofits.

47. Ineconomics,scarcitymeansthat
Ashortageofaparticulargoodwillcausethepricetofall.
Themarketmechanismhasfailed.
Aproductionpossibilitiescurvecannotaccuratelyrepresentthetradeoff
betweentwogoods.
Society'sdesiresexceedthewantsatisfyingcapabilityoftheresources
availabletosatisfythosedesires.
Wecannotproduceeverythingwithfixedresources.

48. Anaturalmonopolyis
Anindustrythatisdominatedbyasinglefirm.
Anindustryinwhichonefirmcanachieveeconomiesofscaleovertheentire
rangeofmarketsupply.
Anunregulatedmonopoly.
Amonopolythatalwaysbenefitssocietyevenwhenitisunregulated.
Anaturalmonopolyisanindustryinwhichonefirmcanachieveeconomiesofscaleover
theentirerangeofmarketsupply.

49. Thefundamentalproblemofeconomicsis
Howtocreateemploymentforeveryone.
Thescarcityofresourcesrelativetohumanwants.
Thelawofincreasingopportunitycosts.
Howtogetgovernmenttooperateefficiently.
Wantswillalwaysexceedresources.

50. Afactormarketisanyplaceorprocesswhere
Finishedgoodsareboughtandsold.
Land,labor,orcapitalisboughtandsold.
Finishedservicesareboughtandsold.
Noneofthechoicesarecorrect.
Afactormarketiswherethefactorsofproduction(land,labor,orcapital)areboughtand
sold.

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51. Capital,aseconomistsusetheterm,refersto
Thecostsofoperatingabusiness.
Finalgoodsthatareusedtoproduceothergoodsandservices.
Sharesofstockissuedbybusinesses.
Themoneyneededtostartanewbusiness.
Physicalcapitalisusedtoproduceothergoodsandservices,includingothercapitalgoods.
Hammersproducehouses.Forkliftsmoveforkliftpartsaroundaforkliftfactory.Moneyis
financialcapital,whichisathroughput.Itisusedtoacquireahammerorphysicalcapital.

52. Themostdesirablecombinationofoutputattainablewithexistingresources,technology,and
socialvaluesisknownasthe
Optimalmixofoutput.
Efficientmixofoutput.
Optimalmixofproduction.
Efficientchoiceofproduction.
Theoptimalmixofoutputmaximizescollectivesocialutilityandthereforeisthemost
desirable.

53. Amonopolyexistswhen
Asmallnumberoffirmsaretheonlyproducersofagood.
Consumersarebeingexploited.
Onefirmproducestheentiremarketofagoodorservice.
Thegovernmentintervenesonbehalfofconsumers.
Therewilltypicallybegovernmentinterventiontolimitthepowersofamonopoly.

54. Accordingtothelawofdemand,ademandcurve
Exceedstheeconomy'sabilitytoproduce.
Isahorizontalorflatline.
Hasanegativeslope.
Hasapositiveslope.
Becausepriceandquantitydemandedareinverselyrelated,thedemandcurveis
downwardsloping(hasanegativeslope).

55. Whichcomponent(s)ofU.S.realGDPdecreasedinsizerelativetototalU.S.realGDPfrom
1950to2000?
Onlyagriculture.
Onlyservices.
Onlymanufacturing.
Agricultureandmanufacturing.
Althoughagriculture,alongwithmanufacturing,mining,andconstruction,areimportant

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partsofoureconomy,theirrelativesizeinU.S.realGDPhasshrunksignificantlysince
WorldWarII.

56. Apointonanation'sproductionpossibilitiescurverepresents
Combinationsofproductionthatareunattainable,givencurrenttechnology
andresources.
Thefullemploymentofresourcestoachieveaparticularcombinationofgoods
andservices.
Levelsofproductionthatwillcausebothunemploymentandinflation.
Anundesirablecombinationofgoodsandservices.
Beingonthecurveisefficientbecausewearegettingthemostwecanoutofourresources.

57. Thebasicfactorsofproductioninclude
Land,labor,money,andinputs.
Land,labor,capital,andentrepreneurship.
Laborandmoney.
Land,labor,money,andcapital.
Thebasicfourfactorsarerequiredfortheproductionofgoodsandservices.Factorsof
productionarewhatareneededonacampingtrip.Moneyisnotneededonacampingtrip.

58. Resourcesaredirectedfromoneindustrytoanotherby
Changesinmarketprices.
Marketfailure.
Governmentfailure.
Noneofthechoicesarecorrect.
Pricesignalsinthemarketplacemovefactorsofproductionfromoneindustrytoanotherin
responsetoconsumerdemands.

59. Aprivategood
Resultsinmarketfailurewhenprovidedinmarketscharacterizedbylaissez
faire.
Experiencesfreeriders.
Isconsumedbyonepersonandexcludesconsumptionbyothers.
Isprovidedmostefficientlybythegovernment.
Aprivategoodisagoodorservicewhoseconsumptionbyonepersonexcludes
consumptionbyothers.Inotherwords,it's"rival"inconsumption.

60. Economicscanbedefinedasthestudyof
Forwhomresourcesareallocatedtoincreaseefficiency.
Howsocietyspendstheincomeofindividuals.
Howscarceresourcesareallocatedonamacroleveltobestmeetsociety's
goalsoronamicroleveltobestmeetanindividual'sorfirm'sgoals.

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Noneofthechoicesarecorrect.
Economicsstudieshowwegetthemostwecanoutofwhatwehave.
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