Question 1

Specialization and trade allow individuals to:

Accepted Answer

A) consume outside their own production possibilities frontier (PPF). 
B) shift their PPF outward. 
C) produce more goods with less technology. 
D) eliminate scarcity. 
E) produce fewer goods with less technology. 
A) consume outside their own production possibilities frontier (PPF). 
B) shift their PPF outward. 
C) produce more goods with less technology. 
D) eliminate scarcity. 
E) produce fewer goods with less technology.

Question 2

Opportunity cost is evident on the production possibilities frontier (PPF)graph:

Accepted Answer

A) as you move from one point on the frontier to another point on the frontier. 
B) as you move from the origin to any inefficient point. 
C) as you move from one unattainable point to an efficient point on the frontier. 
D) as you move from an inefficient point to the origin. 
E) at any one single point on the graph. 
A) as you move from one point on the frontier to another point on the frontier. 
B) as you move from the origin to any inefficient point. 
C) as you move from one unattainable point to an efficient point on the frontier. 
D) as you move from an inefficient point to the origin. 
E) at any one single point on the graph.

Question 3

On a production possibilities frontier (PPF)that shows the trade-off between consumer goods and capital goods given a fixed amount of labor,unemployment is illustrated by:

Accepted Answer

A) movement from a point within the frontier to a point on the frontier. 
B) a point outside the frontier. 
C) a point within the frontier. 
D) movement from a point on the frontier to another point on the frontier. 
E) a point on the frontier. 
A) movement from a point within the frontier to a point on the frontier. 
B) a point outside the frontier. 
C) a point within the frontier. 
D) movement from a point on the frontier to another point on the frontier. 
E) a point on the frontier.

Question 4

Refer to the following figures to answer the questions that follow.
  
-Which allocation point in the short-run production possibilities frontier (PPF)will lead to NO GROWTH in the long-run PPF?

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 5

Is there an opportunity cost to increased investment in capital goods today?

Accepted Answer

A) Yes,increased production of capital goods means fewer consumer goods today. 
B) Yes,increased production of capital goods today means less economic growth in the future. 
C) No,increased production of capital goods today does not mean fewer consumer goods today. 
D) No,increased production of capital goods today guarantees more consumption today. 
E) No,if society is producing at an efficient point on the production possibilities frontier (PPF),then there is no opportunity cost to investment in capital goods. 
A) Yes,increased production of capital goods means fewer consumer goods today. 
B) Yes,increased production of capital goods today means less economic growth in the future. 
C) No,increased production of capital goods today does not mean fewer consumer goods today. 
D) No,increased production of capital goods today guarantees more consumption today. 
E) No,if society is producing at an efficient point on the production possibilities frontier (PPF),then there is no opportunity cost to investment in capital goods.

Question 6

A positive statement:

Accepted Answer

A) is a claim that can be tested. 
B) is a statement about what ought to be. 
C) is a declaration of opinion. 
D) is a claim that cannot be tested. 
E) cannot be evaluated using the scientific method. 
A) is a claim that can be tested. 
B) is a statement about what ought to be. 
C) is a declaration of opinion. 
D) is a claim that cannot be tested. 
E) cannot be evaluated using the scientific method.

Question 7

Refer to the graph below.This society could reach point F when there is a(n):

Accepted Answer

A) increase in the monetary price of apple pie. 
B) credible new study that shows blueberries reduce the risk of heart attack. 
C) increase in technology that makes pie bakers more efficient. 
D) new regulation that makes pie baking more costly. 
E) increase in the monetary price of blueberry pie. 
A) increase in the monetary price of apple pie. 
B) credible new study that shows blueberries reduce the risk of heart attack. 
C) increase in technology that makes pie bakers more efficient. 
D) new regulation that makes pie baking more costly. 
E) increase in the monetary price of blueberry pie.

Question 8

In the movie A Knight's Tale,three peasants win a jousting tournament and must decide whether they should enjoy most of their winnings now or use most of it for training to improve their future jousting performance.Use appropriate production possibilities frontiers (PPFs)and words to describe the investment trade-off they face.

Accepted Answer

@#IMG-DLM& This is a classic example of the trade-

Question 9

The scientific method and the tools of economics are useful in examining:

Accepted Answer

A) only how individuals make decisions. 
B) only how business firms make decisions. 
C) only how government policies affect macroeconomic outcomes. 
D) only the trade-offs evident in production possibilities frontier (PPF). 
E) anything; economists will use their tools to study anything in the world around them. 
A) only how individuals make decisions. 
B) only how business firms make decisions. 
C) only how government policies affect macroeconomic outcomes. 
D) only the trade-offs evident in production possibilities frontier (PPF). 
E) anything; economists will use their tools to study anything in the world around them.

Question 10

The _________ illustrates the various combinations of output that a society can produce if all of its resources are being used efficiently.

Accepted Answer

A) concept of absolute advantage 
B) law of positive statements 
C) law of demand 
D) production possibilities frontier (PPF) 
E) principle of comparative advantage 
A) concept of absolute advantage 
B) law of positive statements 
C) law of demand 
D) production possibilities frontier (PPF) 
E) principle of comparative advantage

Question 11

If Elaine can produce more output from a set amount of resources than Jerry can,you know that:

Accepted Answer

A) Elaine has a comparative advantage. 
B) Jerry has a comparative advantage. 
C) Elaine has an absolute advantage. 
D) Jerry has an absolute advantage. 
E) Elaine has a normative advantage. 
A) Elaine has a comparative advantage. 
B) Jerry has a comparative advantage. 
C) Elaine has an absolute advantage. 
D) Jerry has an absolute advantage. 
E) Elaine has a normative advantage.

Question 12

The process of using current resources to create or buy new capital is called:

Accepted Answer

A) absolute advantage. 
B) comparative advantage. 
C) investment. 
D) the law of increasing relative cost. 
E) economic growth. 
A) absolute advantage. 
B) comparative advantage. 
C) investment. 
D) the law of increasing relative cost. 
E) economic growth.

Question 13

Refer to the following figure to answer the questions that follow.
  
-What is the most preferred consumption point for a pie-appreciating society?

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

Goods that are produced now so that they can be used to produce other goods in the future are called:

Accepted Answer

A) capital goods. 
B) consumer goods. 
C) investment goods. 
D) normal goods. 
E) opportunity goods. 
A) capital goods. 
B) consumer goods. 
C) investment goods. 
D) normal goods. 
E) opportunity goods.

Question 15

Refer to the following figure for the questions that follow.
  
-The opportunity cost of increasing the production of apple pies from 12 to 14 pies is:

Accepted Answer

A) 2 blueberry pies. 
B) 14 apple pies. 
C) 7 blueberry pies. 
D) 4 blueberry pies. 
E) 2 apple pies. 
A) 2 blueberry pies. 
B) 14 apple pies. 
C) 7 blueberry pies. 
D) 4 blueberry pies. 
E) 2 apple pies.

Question 16

Consumer goods:

Accepted Answer

A) are produced today to be used to produce more goods in the future. 
B) are produced today to be consumed at some point in the future. 
C) are invested today in order to consume more today. 
D) are produced today to be consumed today. 
E) generate economic growth. 
A) are produced today to be used to produce more goods in the future. 
B) are produced today to be consumed at some point in the future. 
C) are invested today in order to consume more today. 
D) are produced today to be consumed today. 
E) generate economic growth.

Question 17

Refer to the following figure to answer the questions that follow.
  
-Which of the following represents an inefficient point?

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 18

Which of the following is a positive statement?

Accepted Answer

A) Winters in Arkansas are too cold. 
B) Everyone should work in a bank to understand the true value of money. 
C) Harvard University is the top education institution in the country. 
D) On average,people save 15% when they switch to GEICO. 
E) Everyone ought to have a life insurance policy. 
A) Winters in Arkansas are too cold. 
B) Everyone should work in a bank to understand the true value of money. 
C) Harvard University is the top education institution in the country. 
D) On average,people save 15% when they switch to GEICO. 
E) Everyone ought to have a life insurance policy.

Question 19

Suppose you are studying a production possibilities frontier (PPF)that has a bowed-out shape relative to the origin.What causes this shape?

Accepted Answer

A) economic growth 
B) the law of increasing relative cost 
C) absolute advantage 
D) normative economics 
E) more resources 
A) economic growth 
B) the law of increasing relative cost 
C) absolute advantage 
D) normative economics 
E) more resources

Question 20

Which statement best describes the absolute advantage as shown in the graphs?

Accepted Answer

A) Pam has an absolute advantage in the production of both. 
B) Jim has an absolute advantage in the production of both. 
C) Jim has an absolute advantage in the production of pizzas,and Pam has an absolute advantage in the production of stromboli. 
D) Pam has an absolute advantage in the production of pizzas,and Jim has an absolute advantage in the production of stromboli. 
E) They both have an absolute advantage in the production of stromboli. 
A) Pam has an absolute advantage in the production of both. 
B) Jim has an absolute advantage in the production of both. 
C) Jim has an absolute advantage in the production of pizzas,and Pam has an absolute advantage in the production of stromboli. 
D) Pam has an absolute advantage in the production of pizzas,and Jim has an absolute advantage in the production of stromboli. 
E) They both have an absolute advantage in the production of stromboli.

Specialization and trade allow individuals to:

Opportunity cost is evident on the production possibilities frontier (PPF)graph:

On a production possibilities frontier (PPF)that shows the trade-off between consumer goods and capital goods given a fixed amount of labor,unemployment is illustrated by:

Refer to the following figures to answer the questions that follow. -Which allocation point in the short-run production possibilities frontier (PPF)will lead to NO GROWTH in the long-run PPF?

Is there an opportunity cost to increased investment in capital goods today?

A positive statement:

Refer to the graph below.This society could reach point F when there is a(n):

The scientific method and the tools of economics are useful in examining:

The _________ illustrates the various combinations of output that a society can produce if all of its resources are being used efficiently.

If Elaine can produce more output from a set amount of resources than Jerry can,you know that:

The process of using current resources to create or buy new capital is called:

Refer to the following figure to answer the questions that follow. -What is the most preferred consumption point for a pie-appreciating society?

Goods that are produced now so that they can be used to produce other goods in the future are called:

Refer to the following figure for the questions that follow. -The opportunity cost of increasing the production of apple pies from 12 to 14 pies is:

Consumer goods:

Refer to the following figure to answer the questions that follow. -Which of the following represents an inefficient point?

Which of the following is a positive statement?

Suppose you are studying a production possibilities frontier (PPF)that has a bowed-out shape relative to the origin.What causes this shape?

Which statement best describes the absolute advantage as shown in the graphs?

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

Specialization and trade allow individuals to:

Opportunity cost is evident on the production possibilities frontier (PPF)graph:

On a production possibilities frontier (PPF)that shows the trade-off between consumer goods and capital goods given a fixed amount of labor,unemployment is illustrated by:

Refer to the following figures to answer the questions that follow. -Which allocation point in the short-run production possibilities frontier (PPF)will lead to NO GROWTH in the long-run PPF?

Is there an opportunity cost to increased investment in capital goods today?

A positive statement:

Refer to the graph below.This society could reach point F when there is a(n):

The scientific method and the tools of economics are useful in examining:

The _________ illustrates the various combinations of output that a society can produce if all of its resources are being used efficiently.

If Elaine can produce more output from a set amount of resources than Jerry can,you know that:

The process of using current resources to create or buy new capital is called:

Refer to the following figure to answer the questions that follow. -What is the most preferred consumption point for a pie-appreciating society?

Goods that are produced now so that they can be used to produce other goods in the future are called:

Refer to the following figure for the questions that follow. -The opportunity cost of increasing the production of apple pies from 12 to 14 pies is:

Consumer goods:

Refer to the following figure to answer the questions that follow. -Which of the following represents an inefficient point?

Which of the following is a positive statement?

Suppose you are studying a production possibilities frontier (PPF)that has a bowed-out shape relative to the origin.What causes this shape?

Which statement best describes the absolute advantage as shown in the graphs?

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