ECON 312 Midterm Exam
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a command system.<br />
7. Question : (TCO 1) Markets in which firms sell their output of goods and services are called<br />
Student Answer: resource markets.<br />
product markets.<br />
command markets.<br />
mixed markets.<br />
8. Question : (TCO 1) Consumers express self-interest when they<br />
Student Answer: seek the lowest price for a product.<br />
reduce business losses.<br />
collect economic profits.<br />
search for jobs with the highest wages.<br />
9. Question : (TCO 1) Which is not one of the five fundamental questions that an economy must deal<br />
with?<br />
Student Answer: How will the goods and services be produced?<br />
Why should the goods and services be produced?<br />
Who is to receive the goods and services produced in the economy?<br />
In what ways will progress be promoted?<br />
10. Question : (TCO 1) The major “success indicator” for business managers in command economies like<br />
the Soviet Union and China in the past was<br />
Student Answer: the quantity of output.<br />
product quality.<br />
the amount of profits.<br />
worker morale.<br />
11. Question : (TCO 2) An increase in demand means that<br />
Student Answer: given supply, the price of the product will decline.<br />
the demand curve has shifted to the right.<br />
price has declined and consumers therefore want to purchase more of the product.<br />
the demand curve has shifted to the left.<br />
12. Question : (TCO 2) A surplus of a product will arise when price is<br />
Student Answer: above equilibrium with the result that quantity demanded exceeds quantity supplied.<br />
above equilibrium with the result that quantity supplied exceeds quantity demanded.<br />
below equilibrium with the result that quantity demanded exceeds quantity supplied.<br />
below equilibrium with the result that quantity supplied exceeds quantity demanded.<br />
13. Question : (TCO 2) If an effective price ceiling is placed on hamburgers then<br />
Student Answer: the quantity demanded will exceed the quantity supplied.<br />
a black market for hamburger may evolve.<br />
consumers may want government to ration hamburger.<br />
all of these are likely outcomes.<br />
14. Question : (TCO 2) Which would cause an increase in quantity supplied of Product A?<br />
Student Answer: An improvement in technology affecting the production of A
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