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1. (TCO 1) As a consequence of the condition of scarcity

2. (TCO 1) Henry wants to buy a book.  The economic perspective suggests that Henry will buy the book if

3. (TCO 1) The law of increasing opportunity costs indicates that

4. (TCO 1) Which expression is another way of saying “marginal benefit”?

5. (TCO 1) Which is not a factor of production?

6. (TCO 1) The economy of Germany would best be classified as:

7. (TCO 1) The simple circular-flow model shows that workers, entrepreneurs, and the owners of land and capital offer their services through

8. (TCO 1) By free enterprise, we mean that

9. (TCO 1) Consumer sovereignty and “dollar votes” guide the market system in dealing with which fundamental question?

10. (TCO 1) The major “success indicator” for business managers in command economies like the Soviet Union and China in the past was

11. (TCO 2) The quantity demanded of a product increases as its price declines because the

12. (TCO2) If there is a shortage of product X

13. (TCO 2) Black markets are associated with

14. (TCO 2) An increase in demand for oil along with a simultaneous increase in supply of oil will

15. (TCO 2) For most products, purchases tend to fall with decreases in buyers’ incomes.  Such products are known as

16. (TCO 2) If the price-elasticity coefficient for a good is .75, the demand for that good is described as

17. (TCO 2) Demand is said to be inelastic when

18. (TCO 2) The price elasticity of demand increases with the length of the period considered because

19. (TCO 2) If the demand for a product is elastic, then

20. (TCO 2) When universities announce a large tuition increase and follow it with an announcement that more financial aid will be available, they are assuming that students who pay full tuition

21. (TCO 3) Cash expenditures a firm makes to pay for resources are called

22. (TCO 3) If a firm’s revenues just cover all its opportunity costs, then

23. (TCO 3) In the short run

24. (TCO 3) The law of diminishing returns only applies in cases where

25. (TCO 3) Marginal cost can be defined as the

26. (TCO 3) A fast-food company spends millions of dollars to develop and promote a new hamburger on its menu only to find that consumers won’t buy it because they don’t like the taste.  From an economic perspective, the company should

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1. (TCO 3) Which market model assumes the least number of firms in an industry?

2. (TCO 3) Local electric or gas utility companies mostly operate in which market model?

3. (TCO 3) The production of agricultural products such as wheat or corn would best be described by which market model?

4. (TCO 3) Sam owns a firm that produces tomatoes in a purely competitive market.  The firm’s demand curve is

5. (TCO 3) A profit-maximizing firm in the short run will expand output

6. (TCO 3) If a purely competitive firm is producing at an output where marginal revenue exceeds marginal cost, the firm will increase its profit by

7. (TCO 3) The short-run supply curve for a competitive firm is the

8. (TCO 3) Which phrase would be most characteristic of pure monopoly?

9. (TCO 3) Barriers to entry

10. (TCO 3) One feature of pure monopoly is that the demand curve

11. (TCO 3) Which would definitely not be an example of price discrimination?

12. (TCO 3) In which industry is monopolistic competition most likely to be found?

13. (TCO 3) Assume that in a monopolistically competitive industry, firms are earning economic profit.  This situation will

14. (TCO 3) A unique feature of an oligopolistic industry is

15. (TCO 3) A low concentration ratio means that

16. (TCO 3) A major reason that firms form a cartel is to

17. (TCO 1) Which of the following is a land resource?

18. (TCO 1) Refer to the diagram below which is based on the Circular Flow Model in Chapter 2.  Arrows (1) and (2) represent

19. (TCO 2) Refer to the diagram.  A decrease in demand is depicted by a

20. (TCO 2) Refer to the information and assume the stadium capacity is 5,000.  The supply of seats for the game

21. (TCO 2) Which type of goods is most adversely affected by recessions?

22. (TCO 3) The following cost data are for a firm in the short run: What is the firm’s average variable cost at an output of 5 units?

23. (TCO 1) Refer to the diagram.  Points A, B, C, D, and E show

24. (TCO 3) Any activity designed to transfer income or wealth to a particular individual or firm at society’s expense is called

25. (TCO 3) a.) What is the relationship between economies of scale and a natural monopoly?  b.) Why is the level of output at which marginal revenue equals marginal cost the profit-maximizing output?

26. (TCO 2) What effect should each of the following have upon the demand for portable music players in a competitive market?  Explain your reasoning in each case.