1. The three fundamental economic questions of what, how, and for whom:

a-exist because of scarcity.

b-are much more serious in a socialist system.

c-are not serious in a capitalistic system.

d-are not relevant in the industrialized world of today.

2.When the market price is established where demand and supply curves intersect:

a-consumer buying tends to exceed the quantity producers supply.

b-the quantity consumers demand generally fall short of the quantity producers supply.

c-the quantity demanded and the quantity supplied are equal.

d-all of the above will result.

3. The costs incurred by a firm in its use of variable factors of production are:

a-total costs.

b-marginal costs.

c-variable costs.

d-fixed costs.

4. An example of capital is:

a-cash.

b-a factory building.

c-money in a checking account.

d-the existing state of technology.

5. In a perfectly competitive labor market, each firm can hire:

a- only a fixed amount of labor at the going wage.

b-all the labor it wants, but only by outbidding its competitors.

c- larger quantities of labor at rising wages per worker.

d-larger quantities of labor at going market wages per worker.

6. The fact that a Giffen good might exist:

a-negates the law of demand.

b-does not negate the law of demand.

c-meas that the law of demand is fine in theory but not valid in the real world.

d-negates the law of increasing cost.

7. When supply and demand are in equilibrium, the price of a good is:

a-greater than the marginal utility of the good.

b-equal to the marginal utility of the good.

c-less than the marginal utility of the good.

d-not necessarily any of the above.