Question 1

A production possibilities curve always slopes downward to the right because resources

Accepted Answer

A)  are not scarce. 
B)  have no opportunity cost. 
C)  are freely available. 
D)  are limited. 
E)  are not related to outputs. 
A)  are not scarce. 
B)  have no opportunity cost. 
C)  are freely available. 
D)  are limited. 
E)  are not related to outputs.

Question 2

Opportunity cost can always be measured in money terms.

Accepted Answer

A) True 
 B)False

Question 3

If an economy is producing inefficiently,it is

Accepted Answer

A)  possible to increase production of all goods simultaneously. 
B)  possible to increase production of one good at the expense of another. 
C)  not possible to increase production of any good. 
D)  not possible to increase economic growth. 
E)  possible to increase production with no effort. 
A)  possible to increase production of all goods simultaneously. 
B)  possible to increase production of one good at the expense of another. 
C)  not possible to increase production of any good. 
D)  not possible to increase economic growth. 
E)  possible to increase production with no effort.

Question 4

Hutch Technology makes computer monitors,which sell for $100 each.What is the opportunity cost of ten monitors?

Accepted Answer

A)  $1,000. 
B)  the other goods that could be produced with the resources that produce the ten monitors 
C)  the profits that Hutch earns when it sells the ten monitors 
D)  the profits that Hutch loses if it does not produce the monitors 
E)  All of the above are correct. 
A)  $1,000. 
B)  the other goods that could be produced with the resources that produce the ten monitors 
C)  the profits that Hutch earns when it sells the ten monitors 
D)  the profits that Hutch loses if it does not produce the monitors 
E)  All of the above are correct.

Question 5

What is division of labor? How does it raise efficiency and productivity?

Accepted Answer

Division of labor means breaking up a ta

Question 6

Adam Smith noted that people are adept at which of the following?

Accepted Answer

A)  Confusing themselves if given the chance. 
B)  Proving the truth of "Murphy's Law." 
C)  Denying themselves for the sake of others. 
D)  Pursuing their own self-interest. 
E)  All of the above are correct. 
A)  Confusing themselves if given the chance. 
B)  Proving the truth of "Murphy's Law." 
C)  Denying themselves for the sake of others. 
D)  Pursuing their own self-interest. 
E)  All of the above are correct.

Question 7

List the three coordination decisions made by every economy.

Accepted Answer

A)  Where? When? How? 
B)  How? What? To whom? 
C)  Why? Where? What? 
D)  When? To Whom? Where? 
A)  Where? When? How? 
B)  How? What? To whom? 
C)  Why? Where? What? 
D)  When? To Whom? Where?

Question 8

Why would it be a mistake to treat opportunity costs and explicit monetary costs as identical?

Accepted Answer

A)  Because sometimes the market does not function well. 
B)  Because opportunity costs are different for different goods. 
C)  Because there are trade-offs involved in any decision. 
D)  Because of existence of efficient markets. 
A)  Because sometimes the market does not function well. 
B)  Because opportunity costs are different for different goods. 
C)  Because there are trade-offs involved in any decision. 
D)  Because of existence of efficient markets.

Question 9

If the PPF for guns and butter is bowed outward from the origin,this indicates constant opportunity cost between the two goods.

Accepted Answer

A) True 
 B)False

Question 10

What are the three coordination tasks which markets resolve?

Accepted Answer

They are (1)how to produce any

Question 11

The most important way in which inefficiency occurs is

Accepted Answer

A)  producing more military goods instead of civilian goods. 
B)  limiting economic growth by limiting capital spending. 
C)  unemployment of labor and other resources. 
D)  producing outside the production possibilities frontier. 
E)  All of the above are correct. 
A)  producing more military goods instead of civilian goods. 
B)  limiting economic growth by limiting capital spending. 
C)  unemployment of labor and other resources. 
D)  producing outside the production possibilities frontier. 
E)  All of the above are correct.

Question 12

If two persons trade,one must gain at the expense of the other.

Accepted Answer

A) True 
 B)False

Question 13

The division of labor usually refers to splitting

Accepted Answer

A)  the three coordination decisions among different sets of planners. 
B)  the parts of a complex task among different workers. 
C)  the production of consumption goods and capital goods among different workers. 
D)  political leaders into radical and conservative camps each year. 
A)  the three coordination decisions among different sets of planners. 
B)  the parts of a complex task among different workers. 
C)  the production of consumption goods and capital goods among different workers. 
D)  political leaders into radical and conservative camps each year.

Question 14

According to the law of comparative advantage,a doctor who is also a talented auto mechanic should

Accepted Answer

A)  get a part-time job at a gas station. 
B)  do her own auto repairs and those of her neighbors. 
C)  hire a professional mechanic to repair her car. 
D)  only repair the cars of other doctors. 
A)  get a part-time job at a gas station. 
B)  do her own auto repairs and those of her neighbors. 
C)  hire a professional mechanic to repair her car. 
D)  only repair the cars of other doctors.

Question 15

What determines the position and shape of a society's production possibilities frontier?

Accepted Answer

A)  the physical resources of that society 
B)  the skills of the workforce 
C)  the level of technology of the society 
D)  the amount of factories in the society 
E)  All of the above are correct. 
A)  the physical resources of that society 
B)  the skills of the workforce 
C)  the level of technology of the society 
D)  the amount of factories in the society 
E)  All of the above are correct.

Question 16

The political party that is in power determines the position and shape of the production possibilities frontier that constrains the choices of the economy.

Accepted Answer

A) True 
 B)False

Question 17

Generally,the opportunity cost and the money cost of a good

Accepted Answer

A)  are identical only if the good sells in a free market. 
B)  are different. 
C)  matter only to the purchaser of the good. 
D)  are not reflected in its price. 
A)  are identical only if the good sells in a free market. 
B)  are different. 
C)  matter only to the purchaser of the good. 
D)  are not reflected in its price.

Question 18

Opportunity cost cannot be measured in money terms,only in conceptual terms.

Accepted Answer

A) True 
 B)False

Question 19

Some college students have claimed that because their incomes will be higher as a result of attending college,there is no opportunity cost of attending college.Do you agree? Explain.

Accepted Answer

No.Although the rate of return on colleg

Question 20

Economists define efficiency as

Accepted Answer

A)  output maximization. 
B)  the absence of waste. 
C)  input maximization. 
D)  the presence of surplus. 
A)  output maximization. 
B)  the absence of waste. 
C)  input maximization. 
D)  the presence of surplus.

A production possibilities curve always slopes downward to the right because resources

Opportunity cost can always be measured in money terms.

If an economy is producing inefficiently,it is

Hutch Technology makes computer monitors,which sell for $100 each.What is the opportunity cost of ten monitors?

What is division of labor? How does it raise efficiency and productivity?

Adam Smith noted that people are adept at which of the following?

List the three coordination decisions made by every economy.

Why would it be a mistake to treat opportunity costs and explicit monetary costs as identical?

If the PPF for guns and butter is bowed outward from the origin,this indicates constant opportunity cost between the two goods.

What are the three coordination tasks which markets resolve?

The most important way in which inefficiency occurs is

If two persons trade,one must gain at the expense of the other.

The division of labor usually refers to splitting

According to the law of comparative advantage,a doctor who is also a talented auto mechanic should

What determines the position and shape of a society's production possibilities frontier?

The political party that is in power determines the position and shape of the production possibilities frontier that constrains the choices of the economy.

Generally,the opportunity cost and the money cost of a good

Opportunity cost cannot be measured in money terms,only in conceptual terms.

Some college students have claimed that because their incomes will be higher as a result of attending college,there is no opportunity cost of attending college.Do you agree? Explain.

Economists define efficiency as

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

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Exam 3: The Fundamental Economic Problem Scarcity and Choice

A production possibilities curve always slopes downward to the right because resources

Opportunity cost can always be measured in money terms.

If an economy is producing inefficiently,it is

Hutch Technology makes computer monitors,which sell for $100 each.What is the opportunity cost of ten monitors?

What is division of labor? How does it raise efficiency and productivity?

Adam Smith noted that people are adept at which of the following?

List the three coordination decisions made by every economy.

Why would it be a mistake to treat opportunity costs and explicit monetary costs as identical?

If the PPF for guns and butter is bowed outward from the origin,this indicates constant opportunity cost between the two goods.

What are the three coordination tasks which markets resolve?

The most important way in which inefficiency occurs is

If two persons trade,one must gain at the expense of the other.

The division of labor usually refers to splitting

According to the law of comparative advantage,a doctor who is also a talented auto mechanic should

What determines the position and shape of a society's production possibilities frontier?

The political party that is in power determines the position and shape of the production possibilities frontier that constrains the choices of the economy.

Generally,the opportunity cost and the money cost of a good

Opportunity cost cannot be measured in money terms,only in conceptual terms.

Some college students have claimed that because their incomes will be higher as a result of attending college,there is no opportunity cost of attending college.Do you agree? Explain.

Economists define efficiency as

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