Question 1

Specialization in production

Accepted Answer

A)  raises productivity. 
B)  requires money. 
C)  stimulates exchange. 
D)  All of the above are correct. 
A)  raises productivity. 
B)  requires money. 
C)  stimulates exchange. 
D)  All of the above are correct.

Question 2

The negative slope of a production possibilities frontier is a graphic representation of opportunity cost.

Accepted Answer

A) True 
 B)False

Question 3

All of the points inside a production possibilities frontier are ____; all of the points outside the production possibilities frontier are ____.

Accepted Answer

A)  efficient,inefficient 
B)  optimal,irrational 
C)  attainable,unattainable 
D)  rational,zero-cost 
E)  unattainable,efficient 
A)  efficient,inefficient 
B)  optimal,irrational 
C)  attainable,unattainable 
D)  rational,zero-cost 
E)  unattainable,efficient

Question 4

A market system (market economy)depends on the market to

Accepted Answer

A)  find the most efficient way of using resources. 
B)  determine how large the budget deficit should be. 
C)  decide how much government regulation there should be. 
D)  provide minimum incomes for everyone. 
E)  All of the above are correct. 
A)  find the most efficient way of using resources. 
B)  determine how large the budget deficit should be. 
C)  decide how much government regulation there should be. 
D)  provide minimum incomes for everyone. 
E)  All of the above are correct.

Question 5

If a market system is functioning well,we can conclude that goods with

Accepted Answer

A)  high opportunity costs tend to have high money costs. 
B)  low opportunity costs tend to have high money costs. 
C)  high opportunity costs tend to have low money costs. 
D)  low opportunity costs tend to have zero money costs. 
E)  high opportunity costs tend to have zero money costs. 
A)  high opportunity costs tend to have high money costs. 
B)  low opportunity costs tend to have high money costs. 
C)  high opportunity costs tend to have low money costs. 
D)  low opportunity costs tend to have zero money costs. 
E)  high opportunity costs tend to have zero money costs.

Question 6

An optimal decision is one that chooses

Accepted Answer

A)  the most desirable alternative among the possibilities permitted by the resources available. 
B)  the lowest cost method of meeting goals,without regard to quality or any other feature. 
C)  among various possible goals and offends no one,so that all are equally happy. 
D)  among equally important goals,and thereby avoids the "indispensable necessity" syndrome. 
E)  among possible goals in such a way that spends as little money as possible. 
A)  the most desirable alternative among the possibilities permitted by the resources available. 
B)  the lowest cost method of meeting goals,without regard to quality or any other feature. 
C)  among various possible goals and offends no one,so that all are equally happy. 
D)  among equally important goals,and thereby avoids the "indispensable necessity" syndrome. 
E)  among possible goals in such a way that spends as little money as possible.

Question 7

A rational decision is one that

Accepted Answer

A)  satisfies all desires. 
B)  avoids the intentional allocation of resources. 
C)  assigns available resources in the manner most preferred by decision makers. 
D)  assigns available resources to the uses with the lowest opportunity costs. 
A)  satisfies all desires. 
B)  avoids the intentional allocation of resources. 
C)  assigns available resources in the manner most preferred by decision makers. 
D)  assigns available resources to the uses with the lowest opportunity costs.

Question 8

Carefully define the following terms and explain their importance to the study of economics.
a.
resources
b.
rational decision
c.
scarcity
d.
opportunity cost

Accepted Answer

a. Resources are the instruments provide

Question 9

Economics examines the options open to households and business firms,but ignores the options of governments and entire societies.

Accepted Answer

A) True 
 B)False

Question 10

Opportunity cost can best be defined as the

Accepted Answer

A)  money cost of a good or service. 
B)  money cost plus interest on money borrowed to buy a good or service. 
C)  cost of the resources used to produce a good or service. 
D)  value of the best alternative forgone when the alternative at hand is chosen. 
A)  money cost of a good or service. 
B)  money cost plus interest on money borrowed to buy a good or service. 
C)  cost of the resources used to produce a good or service. 
D)  value of the best alternative forgone when the alternative at hand is chosen.

Question 11

Increasing opportunity cost tends to occur if

Accepted Answer

A)  management is disorganized. 
B)  markets do not equate money and opportunity cost. 
C)  production is inefficient. 
D)  resources are scarce. 
E)  resources are specialized. 
A)  management is disorganized. 
B)  markets do not equate money and opportunity cost. 
C)  production is inefficient. 
D)  resources are scarce. 
E)  resources are specialized.

Question 12

Figure 3-2  
-In Figure 3-2,the production possibilities frontier has a bowed-out shape because of the law of

Accepted Answer

A)  decreasing costs. 
B)  increasing costs. 
C)  demand. 
D)  comparative advantage. 
A)  decreasing costs. 
B)  increasing costs. 
C)  demand. 
D)  comparative advantage.

Question 13

Draw a production possibilities frontier for an economy,with the axes labeled "military goods" and "peace goods." Indicate the region that is attainable and the region that is not.Explain the shape of the curve-what assumptions did you make in drawing it?

Accepted Answer

The curve should look like the figures i

Question 14

Free markets​ can:

Accepted Answer

A)  ​prouduce goods and services with maximum efficiency 
B)  ​solve unemployment 
C)  ​protect the environment 
D)  ​all of these 
A)  ​prouduce goods and services with maximum efficiency 
B)  ​solve unemployment 
C)  ​protect the environment 
D)  ​all of these

Question 15

The opportunity cost of increased production of some good can be measured with

Accepted Answer

A)  the slope of a ray to the production possibilities curve. 
B)  the area under the curve of a production possibilities curve. 
C)  the area of the rectangle bounded by the axes and the point on the production possibilities curve. 
D)  the slope of the production possibilities curve. 
E)  All of the above are correct. 
A)  the slope of a ray to the production possibilities curve. 
B)  the area under the curve of a production possibilities curve. 
C)  the area of the rectangle bounded by the axes and the point on the production possibilities curve. 
D)  the slope of the production possibilities curve. 
E)  All of the above are correct.

Question 16

How are money cost and opportunity cost related to each other?

Accepted Answer

A)  If markets function well,they are closely related. 
B)  They are always identical in any economic system. 
C)  Opportunity cost always exceeds money cost. 
D)  Money cost is less than or equal to opportunity cost. 
E)  In a market economy,they are always equal to each other. 
A)  If markets function well,they are closely related. 
B)  They are always identical in any economic system. 
C)  Opportunity cost always exceeds money cost. 
D)  Money cost is less than or equal to opportunity cost. 
E)  In a market economy,they are always equal to each other.

Question 17

The scarcity of physical resources such as fuel means:

Accepted Answer

A)  we should keep our homes cooler in the winter 
B)  we should keep our homes warmer in the summer 
C)  we should live close to our jobs to conserve fuel 
D)  all of these are true. 
A)  we should keep our homes cooler in the winter 
B)  we should keep our homes warmer in the summer 
C)  we should live close to our jobs to conserve fuel 
D)  all of these are true.

Question 18

Ex-London School of Economics student Mick Jagger sang,"You can't always get what you want,but if you try sometime,you just might find you can get what you need." Another statement of the basic economic principle expressed in this lyric is that

Accepted Answer

A)  rational decisions are not always possible. 
B)  you can allocate your resources to what gives you the highest value. 
C)  you can create the supply to meet your own demand. 
D)  you can maximize social welfare by making optimal decisions. 
A)  rational decisions are not always possible. 
B)  you can allocate your resources to what gives you the highest value. 
C)  you can create the supply to meet your own demand. 
D)  you can maximize social welfare by making optimal decisions.

Question 19

Given its size,the United States does not have to worry about limitations on resources.

Accepted Answer

A) True 
 B)False

Question 20

A large government faces a production possibilities frontier much like a business firm does.

Accepted Answer

A) True 
 B)False

Specialization in production

The negative slope of a production possibilities frontier is a graphic representation of opportunity cost.

All of the points inside a production possibilities frontier are ; all of the points outside the production possibilities frontier are .

A market system (market economy)depends on the market to

If a market system is functioning well,we can conclude that goods with

An optimal decision is one that chooses

A rational decision is one that

Carefully define the following terms and explain their importance to the study of economics. a. resources b. rational decision c. scarcity d. opportunity cost

Economics examines the options open to households and business firms,but ignores the options of governments and entire societies.

Opportunity cost can best be defined as the

Increasing opportunity cost tends to occur if

Figure 3-2 -In Figure 3-2,the production possibilities frontier has a bowed-out shape because of the law of

Draw a production possibilities frontier for an economy,with the axes labeled "military goods" and "peace goods." Indicate the region that is attainable and the region that is not.Explain the shape of the curve-what assumptions did you make in drawing it?

Free markets can:

The opportunity cost of increased production of some good can be measured with

How are money cost and opportunity cost related to each other?

The scarcity of physical resources such as fuel means:

Ex-London School of Economics student Mick Jagger sang,"You can't always get what you want,but if you try sometime,you just might find you can get what you need." Another statement of the basic economic principle expressed in this lyric is that

Given its size,the United States does not have to worry about limitations on resources.

A large government faces a production possibilities frontier much like a business firm does.

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

Specialization in production

The negative slope of a production possibilities frontier is a graphic representation of opportunity cost.

All of the points inside a production possibilities frontier are ____; all of the points outside the production possibilities frontier are ____.

A market system (market economy)depends on the market to

If a market system is functioning well,we can conclude that goods with

An optimal decision is one that chooses

A rational decision is one that

Carefully define the following terms and explain their importance to the study of economics. a. resources b. rational decision c. scarcity d. opportunity cost

Economics examines the options open to households and business firms,but ignores the options of governments and entire societies.

Opportunity cost can best be defined as the

Increasing opportunity cost tends to occur if

Figure 3-2 -In Figure 3-2,the production possibilities frontier has a bowed-out shape because of the law of

Draw a production possibilities frontier for an economy,with the axes labeled "military goods" and "peace goods." Indicate the region that is attainable and the region that is not.Explain the shape of the curve-what assumptions did you make in drawing it?

Free markets​ can:

The opportunity cost of increased production of some good can be measured with

How are money cost and opportunity cost related to each other?

The scarcity of physical resources such as fuel means:

Ex-London School of Economics student Mick Jagger sang,"You can't always get what you want,but if you try sometime,you just might find you can get what you need." Another statement of the basic economic principle expressed in this lyric is that

Given its size,the United States does not have to worry about limitations on resources.

A large government faces a production possibilities frontier much like a business firm does.

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

All of the points inside a production possibilities frontier are ; all of the points outside the production possibilities frontier are .

Free markets can: