ECO 450 Week 5 Mid Term Exam
This midterm exam consist of 35 multiple choice questions and covers the material in Chapters 1 through 7. There are five questions from each Chapter.Question 1:If the economy is operating at full employment and using resources efficiently, then an increase in spending for homeland security this year will:Question 2Following the circular flow of a mixed economy, firms receive a flow of dollars from and send goods and services to:Question 3In 2008, which country listed below has the highest percentage of government spending relative to GDP?Question 4Federal government expenditures in the United States account for about:Question 5A mixed economy is one in which:Question 6The extra benefit on one more unit of a good or service is its:Question 7Normative economics is:Question 8Diamonds are sold by a monopoly firm that maximizes profits. Then it follows that:Question 9Positive economics:Question 10If the efficient output of a good is produced each week, then theQuestion 11The current competitive market price of fish is $3 per pound. A chemical producer emits effluent into a lake used by a commercial fishing firm. Each ton of chemical output causes a 20-pound reduction in the annual catch of the fishing firm. Assuming that transactions costs are zero and the chemical firm has the legal right to dump effluent into the lake,Question 12Assuming a product can be manufactured competitively without any externalities at an efficient quantity of 500 units and an efficient price of $150.00 per unit, what efficient quantity-price net subsidy combination would be consistent with a corrective subsidy for a positive externality?Question 13If a positive externality prevails in the market for smoke detectors, then when the market is in equilibrium,Question 14The competitive market equilibrium price of sanitation services in a small town with no government-supplied...