Question 1

Rational production decisions require an understanding of

Accepted Answer

A)  trade-offs. 
B)  opportunity costs. 
C)  scarcity of resources. 
D)  All of the above are correct. 
A)  trade-offs. 
B)  opportunity costs. 
C)  scarcity of resources. 
D)  All of the above are correct.

Question 2

The tendency of opportunity cost to increase as production increases

Accepted Answer

A)  is an example of theory that has not been proven by facts. 
B)  is a general principle,but not a universal fact. 
C)  is a universal fact,with no known exceptions. 
D)  rarely holds in reality,but is a useful theory. 
E)  cannot be tested with standard economic tools. 
A)  is an example of theory that has not been proven by facts. 
B)  is a general principle,but not a universal fact. 
C)  is a universal fact,with no known exceptions. 
D)  rarely holds in reality,but is a useful theory. 
E)  cannot be tested with standard economic tools.

Question 3

In a market economy,government decides the answers to the three economic decisions.

Accepted Answer

A) True 
 B)False

Question 4

Market economies are not constrained by scarcity; only planned economies have that problem.

Accepted Answer

A) True 
 B)False

Question 5

In terms of efficiency,any point on a production possibilities frontier is as good another.

Accepted Answer

A) True 
 B)False

Question 6

Specialization and division of labor are made easier by the existence of money.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is considered by economists to be the most fundamentally scarce?

Accepted Answer

A)  money 
B)  ideas 
C)  needs 
D)  food 
E)  physical resources 
A)  money 
B)  ideas 
C)  needs 
D)  food 
E)  physical resources

Question 8

​How do economists define efficiency? Elaborate.

Accepted Answer

Economists define efficiency as the abse

Question 9

Opportunity cost always arises when a trade-off decision is made.

Accepted Answer

A) True 
 B)False

Question 10

If Japan and the United States engage in trade,and Japan gains as a result of the trade,does that mean the United States has lost in some manner?

Accepted Answer

If economic agents engage in voluntary t

Question 11

A student has a chance to see Katy Perry in concert.The student also has a major economics exam in the morning.If the student goes to the concert,

Accepted Answer

A)  she will get a lower grade on the economics exam. 
B)  the opportunity cost of the concert is time spent studying. 
C)  this decision implies a trade-off. 
D)  All of the above are correct. 
A)  she will get a lower grade on the economics exam. 
B)  the opportunity cost of the concert is time spent studying. 
C)  this decision implies a trade-off. 
D)  All of the above are correct.

Question 12

The fundamental goal of economics is to

Accepted Answer

A)  allow everyone to have five yachts and two automobiles. 
B)  redistribute income and eliminate poverty. 
C)  reduce unemployment so that lower welfare payments are necessary. 
D)  learn to cope with the scarcity of virtually all resources. 
A)  allow everyone to have five yachts and two automobiles. 
B)  redistribute income and eliminate poverty. 
C)  reduce unemployment so that lower welfare payments are necessary. 
D)  learn to cope with the scarcity of virtually all resources.

Question 13

In a market economy,the decision regarding allocation of resources is made by

Accepted Answer

A)  automatic forces of supply and demand. 
B)  authorities in Washington,D.C. 
C)  planners in state capitals. 
D)  committees from a variety of economic interest groups. 
E)  All of the above are correct. 
A)  automatic forces of supply and demand. 
B)  authorities in Washington,D.C. 
C)  planners in state capitals. 
D)  committees from a variety of economic interest groups. 
E)  All of the above are correct.

Question 14

The concavity or bowed-out shape of the production possibilities frontier is the result of

Accepted Answer

A)  the law of downward-sloping demand. 
B)  the law of upward-sloping demand. 
C)  the principle of increasing cost. 
D)  complementarity in consumption. 
A)  the law of downward-sloping demand. 
B)  the law of upward-sloping demand. 
C)  the principle of increasing cost. 
D)  complementarity in consumption.

Question 15

Employment discrimination is a source of

Accepted Answer

A)  economic inefficiency. 
B)  increased economic growth. 
C)  innovation. 
D)  shifting production possibilities. 
E)  All of the above are correct. 
A)  economic inefficiency. 
B)  increased economic growth. 
C)  innovation. 
D)  shifting production possibilities. 
E)  All of the above are correct.

Question 16

Which of the following is not an example of a type of factor of production?

Accepted Answer

A)  land 
B)  labor 
C)  government 
D)  capital 
A)  land 
B)  labor 
C)  government 
D)  capital

Question 17

Figure 3-2  
-In Figure 3-2,a point such as D

Accepted Answer

A)  can be obtained through new technology. 
B)  can never be obtained. 
C)  can only be obtained by a capitalist society. 
D)  represents a misallocation of resources. 
A)  can be obtained through new technology. 
B)  can never be obtained. 
C)  can only be obtained by a capitalist society. 
D)  represents a misallocation of resources.

Question 18

Efficiency is defined as minimizing waste.

Accepted Answer

A) True 
 B)False

Question 19

You have invested $1,000 in a stock whose price is increasing at 10 percent a year.Your stock broker,who is never wrong,recommends a stock rising at 20 percent a year.Assuming the broker earns 4 percent of the stock's value on any purchase or sale of the stock,should you take her recommendation?

Accepted Answer

You will earn $200 a year if you take th

Question 20

In early 1996,the upper Midwest suffered record cold,with wind chills of fifty degrees below zero or worse.Yet,grocery stores stocked fresh citrus fruit (obviously not grown locally).Why did grocers stock the fruit?

Accepted Answer

A)  the desire for profit 
B)  concern for their neighbors 
C)  the need to dispose of excess production 
D)  government orders to distribute fruit 
E)  All of the above are correct. 
A)  the desire for profit 
B)  concern for their neighbors 
C)  the need to dispose of excess production 
D)  government orders to distribute fruit 
E)  All of the above are correct.

Rational production decisions require an understanding of

The tendency of opportunity cost to increase as production increases

In a market economy,government decides the answers to the three economic decisions.

Market economies are not constrained by scarcity; only planned economies have that problem.

In terms of efficiency,any point on a production possibilities frontier is as good another.

Specialization and division of labor are made easier by the existence of money.

Which of the following is considered by economists to be the most fundamentally scarce?

How do economists define efficiency? Elaborate.

Opportunity cost always arises when a trade-off decision is made.

If Japan and the United States engage in trade,and Japan gains as a result of the trade,does that mean the United States has lost in some manner?

A student has a chance to see Katy Perry in concert.The student also has a major economics exam in the morning.If the student goes to the concert,

The fundamental goal of economics is to

In a market economy,the decision regarding allocation of resources is made by

The concavity or bowed-out shape of the production possibilities frontier is the result of

Employment discrimination is a source of

Which of the following is not an example of a type of factor of production?

Figure 3-2 -In Figure 3-2,a point such as D

Efficiency is defined as minimizing waste.

You have invested $1,000 in a stock whose price is increasing at 10 percent a year.Your stock broker,who is never wrong,recommends a stock rising at 20 percent a year.Assuming the broker earns 4 percent of the stock's value on any purchase or sale of the stock,should you take her recommendation?

In early 1996,the upper Midwest suffered record cold,with wind chills of fifty degrees below zero or worse.Yet,grocery stores stocked fresh citrus fruit (obviously not grown locally).Why did grocers stock the fruit?

What Is Economics

The Economy Myth and Reality

Supply and Demand An Initial Look

An Introduction To Macroeconomics

The Goals Of Macroeconomic Policy

Economic Growth Theory And Policy

Aggregate Demand and The Powerful Consumer

Demand Side Equilibrium Unemployment Or Inflation

Bringing In The Supply Side Unemployment and Inflation

Managing Aggregate Demand Fiscal Policy

Money and The Banking System

Monetary Policy Conventional and Unconventional

The Financial Crisis and The Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits In The Short and Long Run

The Trade Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System Order Or Disorder

Exchange Rates and The Macroeconomy

Filters

Exam 3: The Fundamental Economic Problem Scarcity and Choice

Rational production decisions require an understanding of

The tendency of opportunity cost to increase as production increases

In a market economy,government decides the answers to the three economic decisions.

Market economies are not constrained by scarcity; only planned economies have that problem.

In terms of efficiency,any point on a production possibilities frontier is as good another.

Specialization and division of labor are made easier by the existence of money.

Which of the following is considered by economists to be the most fundamentally scarce?

​How do economists define efficiency? Elaborate.

Opportunity cost always arises when a trade-off decision is made.

If Japan and the United States engage in trade,and Japan gains as a result of the trade,does that mean the United States has lost in some manner?

A student has a chance to see Katy Perry in concert.The student also has a major economics exam in the morning.If the student goes to the concert,

The fundamental goal of economics is to

In a market economy,the decision regarding allocation of resources is made by

The concavity or bowed-out shape of the production possibilities frontier is the result of

Employment discrimination is a source of

Which of the following is not an example of a type of factor of production?

Figure 3-2 -In Figure 3-2,a point such as D

Efficiency is defined as minimizing waste.

You have invested $1,000 in a stock whose price is increasing at 10 percent a year.Your stock broker,who is never wrong,recommends a stock rising at 20 percent a year.Assuming the broker earns 4 percent of the stock's value on any purchase or sale of the stock,should you take her recommendation?

In early 1996,the upper Midwest suffered record cold,with wind chills of fifty degrees below zero or worse.Yet,grocery stores stocked fresh citrus fruit (obviously not grown locally).Why did grocers stock the fruit?

What Is Economics

The Economy Myth and Reality

Supply and Demand An Initial Look

An Introduction To Macroeconomics

The Goals Of Macroeconomic Policy

Economic Growth Theory And Policy

Aggregate Demand and The Powerful Consumer

Demand Side Equilibrium Unemployment Or Inflation

Bringing In The Supply Side Unemployment and Inflation

Managing Aggregate Demand Fiscal Policy

Money and The Banking System

Monetary Policy Conventional and Unconventional

The Financial Crisis and The Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits In The Short and Long Run

The Trade Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System Order Or Disorder

Exchange Rates and The Macroeconomy

Filters

How do economists define efficiency? Elaborate.