Economics Mock Pre-Comp

Which of the following statements the most accurate regarding economic systems?

• Free markets fail to utilize society’s scare resources when externalities or public goods are being produced and consumed in a given market.

 If the government enacts a price ceiling at a price of $200 for T Swift tickets, which of the following will occur?

• A market shortsge of 100 units

Grace produces cakes at Grace’s Cake Poppe Shop. Which of the following costs would be classified as a fixed cost of production in the short-run?

• Monthly rental cost of using the building to produce and sell cakes

Utility is measured in dollars. If the consumer wants to maximize utility and the cost for each donut is $1.50, how many donuts should he/she choose to consume?

• 3 donuts