Microeconomic question help 10 pts!?
11. Any combination of goods lying outside of the budget line: a.implies that the consumer is not spending all his income. b.yields less utility than any point on the budget line. c.yields less utility than any point inside the budget line. d.is unattainable, given the consumer's income. 12. Which of the following is a labor resource? a.a computer programmer b.a computer c.silicon (sand) used to make computer chips d.a piece of software used by a firm 13. The production possibilities curve illustrates the basic principle that: a.the production of more of any one good will in time require smaller and smaller sacrifices of other goods. b.an economy will automatically obtain full employment of its resources. c.if all the resources of an economy are in use, more of one good can be produced only if less of another good is produced. d.an economy's capacity to produce increases in proportion to its population size. 16. The law of increasing opportunity costs states that: a.if society wants to produce more of a particular good, it must sacrifice larger and larger amounts of other goods to do so. b.the sum of the costs of producing a particular good cannot rise above the current market price of that good. c.if the sum of the costs of producing a particular good rises by a specified percent, the price of that good must rise by a greater relative amount. d.if the prices of all the resources used to produce goods increase, the cost of producing any particular good will increase at the same rate. 19. In the above diagram the equation for this line is: a.y = 4 - 11/3 x. b.y = 3 + 3/4x. c.y = 4 - 3/4x. d.y = 4 + 11/3 x. 20. Which of the following is a distinguishing feature of a market system? a.public ownership of all capital. b.central planning. c.wide-spread private ownership of capital. d.a circular flow of goods, resources, and money. 21. Examples of command economies are: a.the United States and Japan. b.Sweden and Norway. c.Mexico and Brazil. d.Cuba and North Korea. 22. The term laissez faire suggests that: a.land and other natural resources should be privately owned, but capital should be publicly owned. b.land and other natural resources should be publicly owned, but capital equipment should be privately owned. c.government should not interfere with the operation of the economy. d.government action is necessary if the economy is to achieve full employment and full production. 23. Which of the following is not a characteristic of the market system? a.private property b.freedom of enterprise c.government ownership of the major industries d.competition in product and resource markets 24. Specialization in production is important primarily because it: a.results in greater total output. b.allows society to avoid the coincidence-of-wants problem. c.allows society to trade by barter. d.allows society to have fewer capital goods. 25. Which of the following is not an economic cost? a.wages b.rents c.economic profits d.normal profits 26. Economic profits in an industry suggest the industry: a.can earn more profits by increasing product price. b.should be larger to better satisfy consumers' desire for the product. c.has excess production capacity. d.is the size that consumers want it to be. 27. The competitive market system: a.encourages innovation because government provides tax breaks and subsidies to those who develop new products or new productive techniques. b.discourages innovation because it is difficult to acquire additional capital in the form of new machinery and equipment. c.discourages innovation because firms want to get all the profits possible from existing machinery and equipment. d.encourages innovation because successful innovators are rewarded with economic profits. 28. In a market economy the distribution of output will be determined primarily by: a.consumer needs and preferences. b.the quantities and prices of the resources that households supply. c.government regulations that provide a minimum income for all. d.a social consensus as to what distribution of income is most equitable. 29. The invisible hand concept suggests that: a.changes in product demands are only randomly reflected in changes in the demands for resources. b.profit maximization is inconsistent with an efficient allocation of resources. c.government action is necessary to correct for market failures. d.when firms maximize their profits, society's output will also be maximized. 30. The market system: a.produces considerable inefficiency in the use of scarce resources. b.effectively harnesses the incentives of workers and entrepreneurs. c.is inconsistent with freedom of choice in the long run. d.has slowly lost ground to emerging command systems. 31. The failure of Soviet central planning was refle
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11 D 12. A 13. C 16. A, I think 19. Need to see the diagram. However, you can expect A and C to resemble demand curves and B and D to resemble supply curves 20. C 21. Probably D 22. C 23. C 24. A 25. should be C 26. A 27. D 28. A 29. D 30. B Hope this helps
