Economics Midterm

The study of how individuals, institutions, and society make choices under the conditions of scarcity is

• allocation.

• deregulation.

• economics.

• specialization.

Mr. Stevens owns a building in downtown Bentonville. He has considered opening a sporting goods store in the building but has also been approached by someone who would like to rent the space to open a gym. If Mr. Stevens decides to open his sporting goods store, what is the opportunity cost of this decision?

• the opportunity to rent it to another tenant

• the property tax he would pay on the building

• the opportunity he has to run his own business

• the profits he would make from his sporting goods store

Refer to the table provided and answer the following question: Based on the table, what is the marginal cost when the number of workers increases from 2 to 3?

• 8

• 9

• 10

• 11

A company is trying to decide how many workers to hire. They want to maximize profits. What is the maximum number of workers the company can hire to maximize profits while not having marginal costs exceed marginal revenue?

• 8

• 9

• 10

• 11

Which statement is a PRIMARY characteristic of a capitalist system?

• graduated income tax

• private ownership of property

• equal distribution of resources

• governmental regulation of business

When the amount of output produced by a given amount of inputs increases, the MOST LIKELY result is

• overall productivity rises.

• economic interdependence rises.

• consumer spending on productive resources increases.

• business spending on productive resources increases.

What does the acronym FAFSA mean?

• Free Application for Free Student Aid

• Federal Application for Free Student Aid

• Free Application for Federal Student Aid

• Federal Application for Federal Student Aid

FICA taxes are taken from a person's _______.

• wages.

• inheritance.

• wages, but not tips if you work in a service industry.

• income for salary-based, employees and not hourly-based employees.

Which quote BEST represents why a personal budget is important?

• "Let justice be done though the heavens may fall." - John Adams

• "What we obtain too cheap, we esteem too lightly" - Thomas Paine

• "Beware of little expenses. A small leak will sink a great ship." - Benjamin Franklin

• "Is life so dear or peace so sweet as to be purchased at the price of chains?" - Patrick Henry

• checking account

• savings account

• loans to customers

All of these are functions of

• banks

• businesses

• corporations

• government