Question 1

Refer to the accompanying figure to answer the questions that follow.
  
-Unemployed resources are evident at:

Accepted Answer

A) point A. 
B) point B. 
C) point C. 
D) point D. 
E) points B,C,and E. 
A) point A. 
B) point B. 
C) point C. 
D) point D. 
E) points B,C,and E.

Question 2

Explain how scarcity is the root cause of the trade-offs and opportunity cost illustrated in the production possibilities frontier (PPF).

Accepted Answer

The PPF shows the maximum attainable com

Question 3

The important act of holding all other variables constant while examining a particular variable is known as:

Accepted Answer

A) endogeneity. 
B) a normative statement. 
C) a positive statement. 
D) macroeconomics. 
E) ceteris paribus. 
A) endogeneity. 
B) a normative statement. 
C) a positive statement. 
D) macroeconomics. 
E) ceteris paribus.

Question 4

How can a person who is "better" or more efficient (in that they have an absolute advantage in the production of various goods on the PPF)at producing several things be made even better off by specialization and trade?

Accepted Answer

It sometimes seems counterintuitive that

Question 5

Think of the production possibilities frontier (PPF)model.When society is producing the largest possible output from its resources,it is operating:

Accepted Answer

A) inefficiently. 
B) efficiently. 
C) with no opportunity cost. 
D) inside (within)the PPF. 
E) beyond its opportunity cost. 
A) inefficiently. 
B) efficiently. 
C) with no opportunity cost. 
D) inside (within)the PPF. 
E) beyond its opportunity cost.

Question 6

To determine which of two producers has a comparative advantage,you would need to know their:

Accepted Answer

A) increasing relative costs. 
B) opportunity costs of production for both goods. 
C) normative beliefs. 
D) zero-sum games. 
E) level of investment. 
A) increasing relative costs. 
B) opportunity costs of production for both goods. 
C) normative beliefs. 
D) zero-sum games. 
E) level of investment.

Question 7

Suppose you find a production possibilities frontier (PPF)that is shaped like a straight line.What can you determine about the production of the two goods?

Accepted Answer

A) Production of the two goods is subject to decreasing relative cost. 
B) Production of the two goods is subject to increasing relative cost. 
C) Production of the two goods is subject to constant opportunity cost anywhere along the PPF. 
D) One producer must have an absolute advantage in production. 
E) More resources will not cause the PPF to shift. 
A) Production of the two goods is subject to decreasing relative cost. 
B) Production of the two goods is subject to increasing relative cost. 
C) Production of the two goods is subject to constant opportunity cost anywhere along the PPF. 
D) One producer must have an absolute advantage in production. 
E) More resources will not cause the PPF to shift.

Question 8

Which of the following is a normative statement?

Accepted Answer

A) The current exchange rate is 0.7 British pounds per U.S.dollar. 
B) In January,the average temperature in Fargo,North Dakota,is 56 degrees. 
C) Winters in Arkansas are too cold. 
D) On average,people save 15% when they switch to GEICO. 
E) University of Virginia graduates earn more than Duke University graduates. 
A) The current exchange rate is 0.7 British pounds per U.S.dollar. 
B) In January,the average temperature in Fargo,North Dakota,is 56 degrees. 
C) Winters in Arkansas are too cold. 
D) On average,people save 15% when they switch to GEICO. 
E) University of Virginia graduates earn more than Duke University graduates.

Question 9

Car companies build wind tunnels to test the aerodynamics and the handling capabilities of their car designs.The many variables that can be precisely controlled inside the wind tunnel are considered:

Accepted Answer

A) normative factors. 
B) positive factors. 
C) comparative factors. 
D) endogenous factors. 
E) exogenous factors. 
A) normative factors. 
B) positive factors. 
C) comparative factors. 
D) endogenous factors. 
E) exogenous factors.

Question 10

Refer to the following table to answer the questions that follow.
  
-Given an eight-hour workday,which statement best describes the absolute advantage evident in the table?

Accepted Answer

A) Jay-Z has an absolute advantage in making pizzas,and Alicia Keys has an absolute advantage in making cheesesteaks. 
B) Alicia Keys has an absolute advantage in making pizzas,and Jay-Z has an absolute advantage in making cheesesteaks. 
C) Jay-Z has an absolute advantage in the production of both foods. 
D) Alicia Keys has an absolute advantage in the production of both foods. 
E) Neither party has an absolute advantage. 
A) Jay-Z has an absolute advantage in making pizzas,and Alicia Keys has an absolute advantage in making cheesesteaks. 
B) Alicia Keys has an absolute advantage in making pizzas,and Jay-Z has an absolute advantage in making cheesesteaks. 
C) Jay-Z has an absolute advantage in the production of both foods. 
D) Alicia Keys has an absolute advantage in the production of both foods. 
E) Neither party has an absolute advantage.

Question 11

Economists use the scientific method and the tools of economics to study:

Accepted Answer

A) only the decisions of individuals. 
B) only the decisions of business firms. 
C) only economic growth and gross domestic product (GDP). 
D) only the production possibilities curve. 
E) anything around them; the world is the economist's laboratory. 
A) only the decisions of individuals. 
B) only the decisions of business firms. 
C) only economic growth and gross domestic product (GDP). 
D) only the production possibilities curve. 
E) anything around them; the world is the economist's laboratory.

Question 12

The accompanying figures depict the production possibilities frontiers (PPFs)for two people who can allocate the same amount of time between making pizzas and making stromboli.If Jim and Pam were to specialize and trade,at what exchange rate would they find some quantity of trade to be mutually beneficial?

Accepted Answer

A) 3 pizzas for 1 stromboli 
B) 1 pizza for 1 stromboli 
C) 10 pizzas for 2 stromboli 
D) 1 pizza for 1/2 stromboli 
E) 1 pizza for 1/4 stromboli 
A) 3 pizzas for 1 stromboli 
B) 1 pizza for 1 stromboli 
C) 10 pizzas for 2 stromboli 
D) 1 pizza for 1/2 stromboli 
E) 1 pizza for 1/4 stromboli

Question 13

Refer to the accompanying figure to answer the questions that follow.
  
-Given your current resources,you would need even more hours in each day in order to attain:

Accepted Answer

A) point A. 
B) point B. 
C) point C. 
D) point D. 
E) point E. 
A) point A. 
B) point B. 
C) point C. 
D) point D. 
E) point E.

Question 14

A model without any simplifying assumptions:

Accepted Answer

A) is highly complex and likely unworkable. 
B) excludes important predictive variables. 
C) is very helpful for solving tough,real-world problems. 
D) does not look like the real-world problem it is meant to address. 
E) provides simplified solutions to complex problems. 
A) is highly complex and likely unworkable. 
B) excludes important predictive variables. 
C) is very helpful for solving tough,real-world problems. 
D) does not look like the real-world problem it is meant to address. 
E) provides simplified solutions to complex problems.

Question 15

Over the last 20 years,countries such as India and China have:

Accepted Answer

A) consumed heavily with little regard for the future. 
B) invested heavily and enjoyed significant economic growth. 
C) eliminated the problem of scarcity. 
D) produced outside their production possibilities frontier (PPF). 
E) produced wholly for current consumption. 
A) consumed heavily with little regard for the future. 
B) invested heavily and enjoyed significant economic growth. 
C) eliminated the problem of scarcity. 
D) produced outside their production possibilities frontier (PPF). 
E) produced wholly for current consumption.

Question 16

Suppose that Sheldon and Leonard can either run errands or wash dishes.Their maximum output per hour is listed in the following table.Given the same quantity of resources,at what terms of trade (relative price ratio)could they specialize and trade so that both consume outside their own production possibilities frontier (PPF)?

Accepted Answer

A) 1 errand run per 75 dishes washed 
B) 1 errand run per 30 dishes washed 
C) 1 errand run per 12 dishes washed 
D) 1 errand run per 10 dishes washed 
E) 1 errand run per 6 dishes washed 
A) 1 errand run per 75 dishes washed 
B) 1 errand run per 30 dishes washed 
C) 1 errand run per 12 dishes washed 
D) 1 errand run per 10 dishes washed 
E) 1 errand run per 6 dishes washed

Question 17

The ability of one producer to produce a good at a lower opportunity cost than another producer is called:

Accepted Answer

A) a normative statement. 
B) a zero-sum game. 
C) absolute advantage. 
D) comparative advantage. 
E) the law of increasing relative cost. 
A) a normative statement. 
B) a zero-sum game. 
C) absolute advantage. 
D) comparative advantage. 
E) the law of increasing relative cost.

Question 18

The production possibilities frontier (PPF)shows:

Accepted Answer

A) the trade-off between the efficient production of two different goods. 
B) the difference between micro analysis and macro analysis. 
C) the difference between normative and positive analysis. 
D) how a firm should price a new product. 
E) how price and quantity are related for a single good. 
A) the trade-off between the efficient production of two different goods. 
B) the difference between micro analysis and macro analysis. 
C) the difference between normative and positive analysis. 
D) how a firm should price a new product. 
E) how price and quantity are related for a single good.

Question 19

The movie Saving Private Ryan is about a military mission to find and recover a particular soldier-Private Ryan.The movie is predominantly about how much was given up in an effort to save this one particular soldier.The main economic theme of the movie is:

Accepted Answer

A) absolute advantage. 
B) opportunity cost. 
C) normative analysis. 
D) comparative advantage. 
E) positive advantage. 
A) absolute advantage. 
B) opportunity cost. 
C) normative analysis. 
D) comparative advantage. 
E) positive advantage.

Question 20

The figures below depict the production possibilities frontiers (PPFs)for two people who can allocate the same amount of time between making pizzas and making stromboli.Refer to these figures to answer the questions that follow.
  
-What is Jim's opportunity cost of making 1 stromboli?

Accepted Answer

A) 1/2 pizza 
B) 2/3 pizza 
C) 2 pizzas 
D) 2 stromboli 
E) 25 pizzas 
A) 1/2 pizza 
B) 2/3 pizza 
C) 2 pizzas 
D) 2 stromboli 
E) 25 pizzas

Refer to the accompanying figure to answer the questions that follow. -Unemployed resources are evident at:

Explain how scarcity is the root cause of the trade-offs and opportunity cost illustrated in the production possibilities frontier (PPF).

The important act of holding all other variables constant while examining a particular variable is known as:

How can a person who is "better" or more efficient (in that they have an absolute advantage in the production of various goods on the PPF)at producing several things be made even better off by specialization and trade?

Think of the production possibilities frontier (PPF)model.When society is producing the largest possible output from its resources,it is operating:

To determine which of two producers has a comparative advantage,you would need to know their:

Suppose you find a production possibilities frontier (PPF)that is shaped like a straight line.What can you determine about the production of the two goods?

Which of the following is a normative statement?

Car companies build wind tunnels to test the aerodynamics and the handling capabilities of their car designs.The many variables that can be precisely controlled inside the wind tunnel are considered:

Refer to the following table to answer the questions that follow. -Given an eight-hour workday,which statement best describes the absolute advantage evident in the table?

Economists use the scientific method and the tools of economics to study:

Refer to the accompanying figure to answer the questions that follow. -Given your current resources,you would need even more hours in each day in order to attain:

A model without any simplifying assumptions:

Over the last 20 years,countries such as India and China have:

The ability of one producer to produce a good at a lower opportunity cost than another producer is called:

The production possibilities frontier (PPF)shows:

The movie Saving Private Ryan is about a military mission to find and recover a particular soldier-Private Ryan.The movie is predominantly about how much was given up in an effort to save this one particular soldier.The main economic theme of the movie is:

The figures below depict the production possibilities frontiers (PPFs)for two people who can allocate the same amount of time between making pizzas and making stromboli.Refer to these figures to answer the questions that follow. -What is Jim's opportunity cost of making 1 stromboli?

The Five Foundations of Economics

The Market at Work: Supply and Demand

Elasticity

Price Controls

The Efficiency of Markets and the Costs of Taxation

Market Inefficiencies: Externalities and Public Goods

Business Costs and Production

Firms in a Competitive Market

Understanding Monopoly

Price Discrimination

Monopolistic Competition and Advertising

Oligopoly and Strategic Behavior

The Demand and Supply of Resources

Income,inequality,and Poverty

Consumer Choice

Behavioral Economics and Risk Taking

Health Insurance and Health Care

Filters

Exam 2: Model Building and Gains From Trade

Refer to the accompanying figure to answer the questions that follow. -Unemployed resources are evident at:

Explain how scarcity is the root cause of the trade-offs and opportunity cost illustrated in the production possibilities frontier (PPF).

The important act of holding all other variables constant while examining a particular variable is known as:

How can a person who is "better" or more efficient (in that they have an absolute advantage in the production of various goods on the PPF)at producing several things be made even better off by specialization and trade?

Think of the production possibilities frontier (PPF)model.When society is producing the largest possible output from its resources,it is operating:

To determine which of two producers has a comparative advantage,you would need to know their:

Suppose you find a production possibilities frontier (PPF)that is shaped like a straight line.What can you determine about the production of the two goods?

Which of the following is a normative statement?

Car companies build wind tunnels to test the aerodynamics and the handling capabilities of their car designs.The many variables that can be precisely controlled inside the wind tunnel are considered:

Refer to the following table to answer the questions that follow. -Given an eight-hour workday,which statement best describes the absolute advantage evident in the table?

Economists use the scientific method and the tools of economics to study:

Refer to the accompanying figure to answer the questions that follow. -Given your current resources,you would need even more hours in each day in order to attain:

A model without any simplifying assumptions:

Over the last 20 years,countries such as India and China have:

The ability of one producer to produce a good at a lower opportunity cost than another producer is called:

The production possibilities frontier (PPF)shows:

The movie Saving Private Ryan is about a military mission to find and recover a particular soldier-Private Ryan.The movie is predominantly about how much was given up in an effort to save this one particular soldier.The main economic theme of the movie is:

The figures below depict the production possibilities frontiers (PPFs)for two people who can allocate the same amount of time between making pizzas and making stromboli.Refer to these figures to answer the questions that follow. -What is Jim's opportunity cost of making 1 stromboli?

The Five Foundations of Economics

The Market at Work: Supply and Demand

Elasticity

Price Controls

The Efficiency of Markets and the Costs of Taxation

Market Inefficiencies: Externalities and Public Goods

Business Costs and Production

Firms in a Competitive Market

Understanding Monopoly

Price Discrimination

Monopolistic Competition and Advertising

Oligopoly and Strategic Behavior

The Demand and Supply of Resources

Income,inequality,and Poverty

Consumer Choice

Behavioral Economics and Risk Taking

Health Insurance and Health Care

Filters