Question 1

If society produces at a point inside the production possibilities frontier,it is characterized by full employment of resources.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following observations is true?

Accepted Answer

A)  Free markets will achieve all of society's goals. 
B)  The ability to buy goods is divided equally among consumers. 
C)  The market deals with efficiency in production through the profit motive. 
D)  The market system encourages firms to use inputs wastefully. 
A)  Free markets will achieve all of society's goals. 
B)  The ability to buy goods is divided equally among consumers. 
C)  The market deals with efficiency in production through the profit motive. 
D)  The market system encourages firms to use inputs wastefully.

Question 3

The notion of opportunity cost can be represented graphically by the

Accepted Answer

A)  area inside the production possibilities frontier. 
B)  slope of the production possibilities frontier. 
C)  vertical distance from the horizontal axis to the production possibilities frontier. 
D)  horizontal distance from the vertical axis to the production possibilities frontier. 
E)  sum of the horizontal and vertical distances to the production possibilities frontier. 
A)  area inside the production possibilities frontier. 
B)  slope of the production possibilities frontier. 
C)  vertical distance from the horizontal axis to the production possibilities frontier. 
D)  horizontal distance from the vertical axis to the production possibilities frontier. 
E)  sum of the horizontal and vertical distances to the production possibilities frontier.

Question 4

Figure 3-4  
-In Figure 3-4,for which of the following would this statement be true: "To get more apples we have to give up wheat." A movement from

Accepted Answer

A)  A to E 
B)  C to D 
C)  D to C 
D)  D to E 
E)  B to C 
A)  A to E 
B)  C to D 
C)  D to C 
D)  D to E 
E)  B to C

Question 5

​Adam Smith believed that markets coordinated the self-interests of consumers.

Accepted Answer

A) True 
 B)False

Question 6

The concept of opportunity cost is more applicable to society as a whole than it is for an individual household.

Accepted Answer

A) True 
 B)False

Question 7

What is the opportunity cost of economic growth?

Accepted Answer

A)  investment in the current time period 
B)  improved technology in the current time period 
C)  capital goods in the current time period 
D)  consumption in the current time period 
A)  investment in the current time period 
B)  improved technology in the current time period 
C)  capital goods in the current time period 
D)  consumption in the current time period

Question 8

In an attempt to boost enrollment,in January,1996,a private college in Iowa offered free tuition for graduating high school seniors from the county where it is located.For students who accepted the offer,how did this offer affect the opportunity cost of attending college?

Accepted Answer

A)  The opportunity cost did not change,since lost earnings were still a factor. 
B)  The opportunity cost became zero for the typical student. 
C)  The opportunity cost was very low,because the only cost was for books and supplies. 
D)  The opportunity cost did not change,since tuition was not a factor in computing opportunity cost. 
E)  The opportunity cost was lower than if tuition was charged,but there was still a cost. 
A)  The opportunity cost did not change,since lost earnings were still a factor. 
B)  The opportunity cost became zero for the typical student. 
C)  The opportunity cost was very low,because the only cost was for books and supplies. 
D)  The opportunity cost did not change,since tuition was not a factor in computing opportunity cost. 
E)  The opportunity cost was lower than if tuition was charged,but there was still a cost.

Question 9

In terms of the production possibilities diagram,the principle of increasing cost simply asserts that the frontier is

Accepted Answer

A)  downward sloping. 
B)  upward sloping. 
C)  bowed inward. 
D)  bowed outward. 
E)  undefined,because no market will exist in this case. 
A)  downward sloping. 
B)  upward sloping. 
C)  bowed inward. 
D)  bowed outward. 
E)  undefined,because no market will exist in this case.

Question 10

If an economy wants to experience economic growth,what decision must it make and carry out? Explain.

Accepted Answer

People in the economy must decide to con

Question 11

Karl Marx was critical of markets on the grounds that they are not efficient.

Accepted Answer

A) True 
 B)False

Question 12

If good "A" is represented on the horizontal axis and good "B" on the vertical axis,then the steeper the production possibilities frontier at a given level of production of good "A," the

Accepted Answer

A)  larger the opportunity cost of producing an extra unit of good "A." 
B)  larger the quantity of resources being devoted to the production of good "B." 
C)  smaller the quantity of resources being devoted to the production of good "A." 
D)  smaller the opportunity cost of producing an extra unit of good "A." 
E)  greater the returns to scale in the production of good "A." 
A)  larger the opportunity cost of producing an extra unit of good "A." 
B)  larger the quantity of resources being devoted to the production of good "B." 
C)  smaller the quantity of resources being devoted to the production of good "A." 
D)  smaller the opportunity cost of producing an extra unit of good "A." 
E)  greater the returns to scale in the production of good "A."

Question 13

What mechanism assures that producers use inputs efficiently?

Accepted Answer

A)  governmental regulations on use of resources 
B)  altruism 
C)  the desire for profit 
D)  an innate desire to be efficient 
E)  All of the above are correct. 
A)  governmental regulations on use of resources 
B)  altruism 
C)  the desire for profit 
D)  an innate desire to be efficient 
E)  All of the above are correct.

Question 14

Voluntary exchange

Accepted Answer

A)  is usually beneficial to one party,but not the other. 
B)  is always beneficial to both parties. 
C)  is occasionally beneficial to both parties. 
D)  occurs only between nations,not between individuals. 
A)  is usually beneficial to one party,but not the other. 
B)  is always beneficial to both parties. 
C)  is occasionally beneficial to both parties. 
D)  occurs only between nations,not between individuals.

Question 15

A society must make three sorts of decision: what goods to produce,how to produce them,and how to distribute them.

Accepted Answer

A) True 
 B)False

Question 16

The problem of scarcity

Accepted Answer

A)  has been "cooked up" by disenchanted anticapitalists. 
B)  exists because resources are limited relative to wants. 
C)  is solved by promoting economic growth. 
D)  is caused by artificially high prices. 
A)  has been "cooked up" by disenchanted anticapitalists. 
B)  exists because resources are limited relative to wants. 
C)  is solved by promoting economic growth. 
D)  is caused by artificially high prices.

Question 17

Since it is a centrally planned economy,China does not face opportunity costs when economic decisions are made.

Accepted Answer

A) True 
 B)False

Question 18

Which principle states that as the production of one good expands,the opportunity cost of producing another unit of this good generally increases?

Accepted Answer

A)  Principle of total cost 
B)  Principle of increasing cost 
C)  Principle of opportunity cost 
D)  Principle of increasing marginal utility 
A)  Principle of total cost 
B)  Principle of increasing cost 
C)  Principle of opportunity cost 
D)  Principle of increasing marginal utility

Question 19

The opportunity cost of a college education includes wages lost while enrolled in school.

Accepted Answer

A) True 
 B)False

Question 20

The opportunity cost of any decision is the forgone value of the next best alternative that is not chosen.

Accepted Answer

A) True 
 B)False

If society produces at a point inside the production possibilities frontier,it is characterized by full employment of resources.

Which of the following observations is true?

The notion of opportunity cost can be represented graphically by the

Figure 3-4 -In Figure 3-4,for which of the following would this statement be true: "To get more apples we have to give up wheat." A movement from

Adam Smith believed that markets coordinated the self-interests of consumers.

The concept of opportunity cost is more applicable to society as a whole than it is for an individual household.

What is the opportunity cost of economic growth?

In an attempt to boost enrollment,in January,1996,a private college in Iowa offered free tuition for graduating high school seniors from the county where it is located.For students who accepted the offer,how did this offer affect the opportunity cost of attending college?

In terms of the production possibilities diagram,the principle of increasing cost simply asserts that the frontier is

If an economy wants to experience economic growth,what decision must it make and carry out? Explain.

Karl Marx was critical of markets on the grounds that they are not efficient.

If good "A" is represented on the horizontal axis and good "B" on the vertical axis,then the steeper the production possibilities frontier at a given level of production of good "A," the

What mechanism assures that producers use inputs efficiently?

Voluntary exchange

A society must make three sorts of decision: what goods to produce,how to produce them,and how to distribute them.

The problem of scarcity

Since it is a centrally planned economy,China does not face opportunity costs when economic decisions are made.

Which principle states that as the production of one good expands,the opportunity cost of producing another unit of this good generally increases?

The opportunity cost of a college education includes wages lost while enrolled in school.

The opportunity cost of any decision is the forgone value of the next best alternative that is not chosen.

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

If society produces at a point inside the production possibilities frontier,it is characterized by full employment of resources.

Which of the following observations is true?

The notion of opportunity cost can be represented graphically by the

Figure 3-4 -In Figure 3-4,for which of the following would this statement be true: "To get more apples we have to give up wheat." A movement from

​Adam Smith believed that markets coordinated the self-interests of consumers.

The concept of opportunity cost is more applicable to society as a whole than it is for an individual household.

What is the opportunity cost of economic growth?

In an attempt to boost enrollment,in January,1996,a private college in Iowa offered free tuition for graduating high school seniors from the county where it is located.For students who accepted the offer,how did this offer affect the opportunity cost of attending college?

In terms of the production possibilities diagram,the principle of increasing cost simply asserts that the frontier is

If an economy wants to experience economic growth,what decision must it make and carry out? Explain.

Karl Marx was critical of markets on the grounds that they are not efficient.

If good "A" is represented on the horizontal axis and good "B" on the vertical axis,then the steeper the production possibilities frontier at a given level of production of good "A," the

What mechanism assures that producers use inputs efficiently?

Voluntary exchange

A society must make three sorts of decision: what goods to produce,how to produce them,and how to distribute them.

The problem of scarcity

Since it is a centrally planned economy,China does not face opportunity costs when economic decisions are made.

Which principle states that as the production of one good expands,the opportunity cost of producing another unit of this good generally increases?

The opportunity cost of a college education includes wages lost while enrolled in school.

The opportunity cost of any decision is the forgone value of the next best alternative that is not chosen.

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

Adam Smith believed that markets coordinated the self-interests of consumers.