Question 1

A market system solves the

Accepted Answer

A)  "what" and "how" decisions but not the "to whom." 
B)  "what" and "to whom" decisions but not the "how." 
C)  "how" and "to whom" decisions but not the "what." 
D)  "what," "how," and "to whom" decisions. 
A)  "what" and "how" decisions but not the "to whom." 
B)  "what" and "to whom" decisions but not the "how." 
C)  "how" and "to whom" decisions but not the "what." 
D)  "what," "how," and "to whom" decisions.

Question 2

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

Accepted Answer

A)  is preferable over B. 
B)  is an efficient use of resources. 
C)  represents a misallocation of resources. 
D)  is not obtainable. 
A)  is preferable over B. 
B)  is an efficient use of resources. 
C)  represents a misallocation of resources. 
D)  is not obtainable.

Question 3

Because of scarcity,every economic decision involves

Accepted Answer

A)  a trade-off. 
B)  a free good. 
C)  a trade-in. 
D)  an increasing cost. 
E)  a money payment. 
A)  a trade-off. 
B)  a free good. 
C)  a trade-in. 
D)  an increasing cost. 
E)  a money payment.

Question 4

In the Wealth of Nations,Adam Smith wrote about how countries could increase their consumption of goods and services through specialization and trade with other countries.

Accepted Answer

A) True 
 B)False

Question 5

Some authors claim that any point not on the frontier cannot be best.What is their reasoning to support this?

Accepted Answer

A)  A point inside the frontier implies that society is not facing up to the problem of scarcity. 
B)  A point inside the frontier limits growth,and growth is always a goal worth pursuing. 
C)  A point inside the frontier represents inflation,and inflation is a dangerous situation. 
D)  A point inside the frontier results in fewer goods,and more is always better. 
E)  A point inside the frontier is inefficient,and represents wasted resources. 
A)  A point inside the frontier implies that society is not facing up to the problem of scarcity. 
B)  A point inside the frontier limits growth,and growth is always a goal worth pursuing. 
C)  A point inside the frontier represents inflation,and inflation is a dangerous situation. 
D)  A point inside the frontier results in fewer goods,and more is always better. 
E)  A point inside the frontier is inefficient,and represents wasted resources.

Question 6

The division of labor benefits society only if

Accepted Answer

A)  a system of exchange exists. 
B)  society uses all of its resources efficiently. 
C)  society has no specialized resources. 
D)  labor resources are not scarce. 
A)  a system of exchange exists. 
B)  society uses all of its resources efficiently. 
C)  society has no specialized resources. 
D)  labor resources are not scarce.

Question 7

How are the slope of a production possibilities frontier and the opportunity cost of the goods related?

Accepted Answer

A)  The slope is a graphical representation of the cost of expanding production of both goods. 
B)  The slope is a graphical measure of the growth rate of the economy. 
C)  The slope is a graphical representation of the cost of decreasing unemployment. 
D)  The slope is a graphical representation of the rate of trade-off between the goods. 
E)  The slope is a graphical representation of the cost of economic growth in the economy. 
A)  The slope is a graphical representation of the cost of expanding production of both goods. 
B)  The slope is a graphical measure of the growth rate of the economy. 
C)  The slope is a graphical representation of the cost of decreasing unemployment. 
D)  The slope is a graphical representation of the rate of trade-off between the goods. 
E)  The slope is a graphical representation of the cost of economic growth in the economy.

Question 8

Specialization of labor makes sense only if there is some means of exchange.

Accepted Answer

A) True 
 B)False

Question 9

Free markets further all of society's goals.​

Accepted Answer

A) True 
 B)False

Question 10

Money costs and opportunity costs are concepts that are

Accepted Answer

A)  not related in any meaningful way. 
B)  used by tax accountants. 
C)  related through relative prices of goods and services. 
D)  used by economists to learn the most efficient level of output. 
A)  not related in any meaningful way. 
B)  used by tax accountants. 
C)  related through relative prices of goods and services. 
D)  used by economists to learn the most efficient level of output.

Question 11

A country can gain by importing a good from abroad even if that good can be produced more efficiently at home.Is this statement true?

Accepted Answer

This statement could be true.Such import

Question 12

Which of the following must cope with scarcity?

Accepted Answer

A)  individuals 
B)  companies 
C)  governments 
D)  families 
E)  All of the above are correct. 
A)  individuals 
B)  companies 
C)  governments 
D)  families 
E)  All of the above are correct.

Question 13

An optimal decision is one that chooses the most desirable from among all possibilities that are available.

Accepted Answer

A) True 
 B)False

Question 14

The market system provides a way

Accepted Answer

A)  to allow specialization and exchange to work in tandem. 
B)  to improve the well-being of mankind. 
C)  to harness self-interest. 
D)  to allocate goods and services. 
E)  All of the above are correct. 
A)  to allow specialization and exchange to work in tandem. 
B)  to improve the well-being of mankind. 
C)  to harness self-interest. 
D)  to allocate goods and services. 
E)  All of the above are correct.

Question 15

The divergence between money costs and opportunity costs will be greatest in which of the following situations?

Accepted Answer

A)  A university purchases 100 computers. 
B)  A university employs people from town in the commissary (people prefer this job to working in the paper factory). 
C)  A university employs otherwise unemployed teenagers to paint crosswalks and curbs. 
D)  A university replaces the roof of the fine arts building. 
A)  A university purchases 100 computers. 
B)  A university employs people from town in the commissary (people prefer this job to working in the paper factory). 
C)  A university employs otherwise unemployed teenagers to paint crosswalks and curbs. 
D)  A university replaces the roof of the fine arts building.

Question 16

The concept of "an invisible hand" led Adam Smith to believe that

Accepted Answer

A)  if each person looks out for himself or herself,then chaos will inevitably ensue. 
B)  pursuit of self-interest promotes economic well-being for society as a whole. 
C)  governmental rule actually results in greater good than is apparent at the time. 
D)  traditional religion is an appropriate guide for human behavior. 
E)  All of the above are correct. 
A)  if each person looks out for himself or herself,then chaos will inevitably ensue. 
B)  pursuit of self-interest promotes economic well-being for society as a whole. 
C)  governmental rule actually results in greater good than is apparent at the time. 
D)  traditional religion is an appropriate guide for human behavior. 
E)  All of the above are correct.

Question 17

High opportunity costs go hand in hand with high money costs in a properly functioning economy.

Accepted Answer

A) True 
 B)False

Question 18

The statement "Resources employed in producing X are better suited to making Y" is another way of saying

Accepted Answer

A)  the production possibilities frontier is "bowed out." 
B)  the production possibilities frontier is a straight line. 
C)  the production possibilities frontier is "bowed in." 
D)  resources are unproductive. 
E)  resources have no opportunity cost. 
A)  the production possibilities frontier is "bowed out." 
B)  the production possibilities frontier is a straight line. 
C)  the production possibilities frontier is "bowed in." 
D)  resources are unproductive. 
E)  resources have no opportunity cost.

Question 19

Both conservatives and liberals tend to approve of markets because

Accepted Answer

A)  markets are effective in solving many of society's problems. 
B)  markets work well in all cases,and can be relied upon to solve problems. 
C)  their goals are similar enough that they can rely on the same means. 
D)  production is the most important goal,and market systems are very productive. 
E)  of all of the above. 
A)  markets are effective in solving many of society's problems. 
B)  markets work well in all cases,and can be relied upon to solve problems. 
C)  their goals are similar enough that they can rely on the same means. 
D)  production is the most important goal,and market systems are very productive. 
E)  of all of the above.

Question 20

From the data given in Table 3-2,the opportunity cost of increased cotton in moving from A to B is

Accepted Answer

A)  16 units of corn. 
B)  31 units of corn. 
C)  15 units of corn. 
D)  4 units of corn. 
E)  1 unit of corn. 
A)  16 units of corn. 
B)  31 units of corn. 
C)  15 units of corn. 
D)  4 units of corn. 
E)  1 unit of corn.

A market system solves the

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

Because of scarcity,every economic decision involves

In the Wealth of Nations,Adam Smith wrote about how countries could increase their consumption of goods and services through specialization and trade with other countries.

Some authors claim that any point not on the frontier cannot be best.What is their reasoning to support this?

The division of labor benefits society only if

How are the slope of a production possibilities frontier and the opportunity cost of the goods related?

Specialization of labor makes sense only if there is some means of exchange.

Free markets further all of society's goals.

Money costs and opportunity costs are concepts that are

A country can gain by importing a good from abroad even if that good can be produced more efficiently at home.Is this statement true?

Which of the following must cope with scarcity?

An optimal decision is one that chooses the most desirable from among all possibilities that are available.

The market system provides a way

The divergence between money costs and opportunity costs will be greatest in which of the following situations?

The concept of "an invisible hand" led Adam Smith to believe that

High opportunity costs go hand in hand with high money costs in a properly functioning economy.

The statement "Resources employed in producing X are better suited to making Y" is another way of saying

Both conservatives and liberals tend to approve of markets because

From the data given in Table 3-2,the opportunity cost of increased cotton in moving from A to B is

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

A market system solves the

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

Because of scarcity,every economic decision involves

In the Wealth of Nations,Adam Smith wrote about how countries could increase their consumption of goods and services through specialization and trade with other countries.

Some authors claim that any point not on the frontier cannot be best.What is their reasoning to support this?

The division of labor benefits society only if

How are the slope of a production possibilities frontier and the opportunity cost of the goods related?

Specialization of labor makes sense only if there is some means of exchange.

Free markets further all of society's goals.​

Money costs and opportunity costs are concepts that are

A country can gain by importing a good from abroad even if that good can be produced more efficiently at home.Is this statement true?

Which of the following must cope with scarcity?

An optimal decision is one that chooses the most desirable from among all possibilities that are available.

The market system provides a way

The divergence between money costs and opportunity costs will be greatest in which of the following situations?

The concept of "an invisible hand" led Adam Smith to believe that

High opportunity costs go hand in hand with high money costs in a properly functioning economy.

The statement "Resources employed in producing X are better suited to making Y" is another way of saying

Both conservatives and liberals tend to approve of markets because

From the data given in Table 3-2,the opportunity cost of increased cotton in moving from A to B is

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

Free markets further all of society's goals.