Question 1

If an economy begins to use its resources less efficiently, it will move

Accepted Answer

A)  to a point closer to its ppf. 
B)  to a point farther away from its ppf. 
C)  from a point along its ppf to a point outside its ppf. 
D)  from one point to another point along its ppf. 
A)  to a point closer to its ppf. 
B)  to a point farther away from its ppf. 
C)  from a point along its ppf to a point outside its ppf. 
D)  from one point to another point along its ppf.

Question 2

The amount that ________ have accumulated out of past income through saving and inheritance is wealth.

Accepted Answer

A)  governments 
B)  households 
C)  markets 
D)  corporations 
A)  governments 
B)  households 
C)  markets 
D)  corporations

Question 3

Refer to the information provided in Table 2.1 below to answer the following question(s).
Table 2.1
 $$\begin{array} { | c | c | c | } 
\hline & \text { Krystal } & \text { Mark } \
\hline \text { Writing Poerss } & 8 & 12 \
\hline \text { Writing TV Cornnercials } & 2 & 4 \
\hline
\end{array}$$
-Refer to Table 2.1. Which of the following statements is true?

Accepted Answer

A)  Krystal has a comparative advantage in both writing TV commercials and writing poems. 
B)  Mark has a comparative advantage in both writing TV commercials and writing poems. 
C)  Krystal has a comparative advantage in writing TV commercials, and Mark has a comparative advantage in writing poems. 
D)  Mark has a comparative advantage in writing TV commercials, and Krystal has a comparative advantage in writing poems. 
A)  Krystal has a comparative advantage in both writing TV commercials and writing poems. 
B)  Mark has a comparative advantage in both writing TV commercials and writing poems. 
C)  Krystal has a comparative advantage in writing TV commercials, and Mark has a comparative advantage in writing poems. 
D)  Mark has a comparative advantage in writing TV commercials, and Krystal has a comparative advantage in writing poems.

Question 4

The "economic problem" is that given scarce resources, how do large societies go about answering the basic economic questions of what will be produced, how it will be produced, and who will get it.

Accepted Answer

A) True 
 B)False

Question 5

When two people trade,

Accepted Answer

A)  both of them expect to be made worse off by the exchange. 
B)  they are trying to help out each other. 
C)  they know one of them will get the better of the other. 
D)  they both expect to be made better off by the exchange. 
A)  both of them expect to be made worse off by the exchange. 
B)  they are trying to help out each other. 
C)  they know one of them will get the better of the other. 
D)  they both expect to be made better off by the exchange.

Question 6

Refer to the information provided in Table 2.2 below to answer the following question(s).
Table 2.2
 $$\begin{array} { | l | l | l | } 
\hline & \text { Molly } & \text { Pete } \
\hline \text { Avatar Desigrn } & 6 & 3 \
\hline \text { Tattoo Desigri } & 3 & 2 \
\hline
\end{array}$$
-Refer to Table 2.2. For Molly, the opportunity cost of designing four tattoos is ________ avatar designs.

Accepted Answer

A)  6 
B)  8 
C)  12 
D)  24 
A)  6 
B)  8 
C)  12 
D)  24

Question 7

Refer to the information provided in Figure 2.6 below to answer the question(s) that follow.   Figure 2.6
-Refer to Figure 2.6. Which of the following will not cause the production possibility frontier to shift from ppf1 to ppf2?

Accepted Answer

A)  the discovery of previously unknown oil fields 
B)  an improvement in technology 
C)  an increase in the stock of capital 
D)  a decrease in the unemployment rate 
A)  the discovery of previously unknown oil fields 
B)  an improvement in technology 
C)  an increase in the stock of capital 
D)  a decrease in the unemployment rate

Question 8

If an economy is producing on its production possibility frontier but is not producing what people want, the economy

Accepted Answer

A)  is experiencing technological advancement. 
B)  is producing at more than one point on the production possibility frontier. 
C)  is not achieving output efficiency. 
D)  is not being productively efficient. 
A)  is experiencing technological advancement. 
B)  is producing at more than one point on the production possibility frontier. 
C)  is not achieving output efficiency. 
D)  is not being productively efficient.

Question 9

An economy produces capital goods and consumer goods. This economy is operating at a point on its production possibility frontier associated with a large amount of capital goods and a small amount of consumer goods. This is most likely to be a

Accepted Answer

A)  "poor" country because such a nation has difficulty devoting many resources to the production of consumer goods. 
B)  "rich" country because such a nation can afford to sacrifice. 
C)  country with a free market. 
D)  country with a command economy. 
A)  "poor" country because such a nation has difficulty devoting many resources to the production of consumer goods. 
B)  "rich" country because such a nation can afford to sacrifice. 
C)  country with a free market. 
D)  country with a command economy.

Question 10

Refer to the information provided in Figure 2.1 below for the economy of Macroland to answer the question(s) that follow.   Figure 2.1
-Refer to Figure 2.1. If Macroland's economy is at Point A, it could produce more consumer goods

Accepted Answer

A)  without sacrificing any capital goods. 
B)  only by sacrificing some capital goods. 
C)  only with technological improvements. 
D)  only with additional resources. 
A)  without sacrificing any capital goods. 
B)  only by sacrificing some capital goods. 
C)  only with technological improvements. 
D)  only with additional resources.

Question 11

Refer to the information provided in Table 2.1 below to answer the following question(s).
Table 2.1
 $$\begin{array} { | c | c | c | } 
\hline & \text { Krystal } & \text { Mark } \
\hline \text { Writing Poerss } & 8 & 12 \
\hline \text { Writing TV Cornnercials } & 2 & 4 \
\hline
\end{array}$$
-Refer to Table 2.1. For Krystal, the opportunity cost of writing four TV commercials is ________ poems.

Accepted Answer

A)  2 
B)  8 
C)  16 
D)  32 
A)  2 
B)  8 
C)  16 
D)  32

Question 12

Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.   Figure 2.4
-According to Figure 2.4, as the economy moves from Point B to Point D, the opportunity cost of motorcycles, measured in terms of hybrid cars,

Accepted Answer

A)  remains constant. 
B)  decreases. 
C)  increases 
D)  initially increases, then decreases. 
A)  remains constant. 
B)  decreases. 
C)  increases 
D)  initially increases, then decreases.

Question 13

Refer to the information provided in Figure 2.3 below to answer the question(s) that follow.   Figure 2.3
-Refer to Figure 2.3. Assume that this society's production possibility frontier is represented by Panel C. The opportunity cost of sailboats in terms of surfboards is

Accepted Answer

A)  constant. 
B)  increasing. 
C)  decreasing. 
D)  infinite. 
A)  constant. 
B)  increasing. 
C)  decreasing. 
D)  infinite.

Question 14

A decrease in the stock of capital will cause the

Accepted Answer

A)  production possibility frontier to shift outward. 
B)  production possibility frontier to shift inward. 
C)  economy to move down the production possibility frontier. 
D)  economy to move closer to its production possibility frontier. 
A)  production possibility frontier to shift outward. 
B)  production possibility frontier to shift inward. 
C)  economy to move down the production possibility frontier. 
D)  economy to move closer to its production possibility frontier.

Question 15

Comparative advantage refers to the ability to produce at a lower financial cost than a competitor.

Accepted Answer

A) True 
 B)False

Question 16

Refer to the information provided in Figure 2.2 below for the economy of Microland to answer the question(s) that follow.   Figure 2.2
-Refer to Figure 2.2. If Microland's economy is at Point B, it could produce more consumer goods

Accepted Answer

A)  without sacrificing any capital goods. 
B)  by sacrificing some capital goods. 
C)  only with technological improvements. 
D)  only with additional resources. 
A)  without sacrificing any capital goods. 
B)  by sacrificing some capital goods. 
C)  only with technological improvements. 
D)  only with additional resources.

Question 17

In a laissez-faire economy, ________ what gets produced, how it is produced, and who gets it.

Accepted Answer

A)  the behavior of buyers and sellers determines 
B)  the central government authority determines 
C)  firms but not consumers determine 
D)  consumers but not firms determine 
A)  the behavior of buyers and sellers determines 
B)  the central government authority determines 
C)  firms but not consumers determine 
D)  consumers but not firms determine

Question 18

A laissez-faire economy is one in which individual people and firms pursue their own self-interest without any central direction or regulation.

Accepted Answer

A) True 
 B)False

Question 19

Refer to the information provided in Table 2.1 below to answer the following question(s).
Table 2.1
 $$\begin{array} { | c | c | c | } 
\hline & \text { Krystal } & \text { Mark } \
\hline \text { Writing Poerss } & 8 & 12 \
\hline \text { Writing TV Cornnercials } & 2 & 4 \
\hline
\end{array}$$
-Refer to Table 2.1. For Mark, the opportunity cost of writing one TV commercial is

Accepted Answer

A)  1/3 of a poem. 
B)  2 poems. 
C)  3 poems. 
D)  8 poems. 
A)  1/3 of a poem. 
B)  2 poems. 
C)  3 poems. 
D)  8 poems.

Question 20

The principle that the cost of something is equal to what is sacrificed to get it is known as the

Accepted Answer

A)  marginal principle. 
B)  principle of opportunity cost. 
C)  principle of diminishing returns. 
D)  reality principle. 
A)  marginal principle. 
B)  principle of opportunity cost. 
C)  principle of diminishing returns. 
D)  reality principle.

Exam 2: The Economic Problem: Scarcity and Choice

If an economy begins to use its resources less efficiently, it will move

The amount that ________ have accumulated out of past income through saving and inheritance is wealth.

Refer to the information provided in Table 2.1 below to answer the following question(s). Table 2.1 Krystal Mark Writing Poerss 8 12 Writing TV Cornnercials 2 4 -Refer to Table 2.1. Which of the following statements is true?

The "economic problem" is that given scarce resources, how do large societies go about answering the basic economic questions of what will be produced, how it will be produced, and who will get it.

When two people trade,

Refer to the information provided in Table 2.2 below to answer the following question(s). Table 2.2 Molly Pete Avatar Desigrn 6 3 Tattoo Desigri 3 2 -Refer to Table 2.2. For Molly, the opportunity cost of designing four tattoos is ________ avatar designs.

Refer to the information provided in Figure 2.6 below to answer the question(s) that follow. Figure 2.6 -Refer to Figure 2.6. Which of the following will not cause the production possibility frontier to shift from ppf1 to ppf2?

If an economy is producing on its production possibility frontier but is not producing what people want, the economy

An economy produces capital goods and consumer goods. This economy is operating at a point on its production possibility frontier associated with a large amount of capital goods and a small amount of consumer goods. This is most likely to be a

Refer to the information provided in Figure 2.1 below for the economy of Macroland to answer the question(s) that follow. Figure 2.1 -Refer to Figure 2.1. If Macroland's economy is at Point A, it could produce more consumer goods

Refer to the information provided in Table 2.1 below to answer the following question(s). Table 2.1 Krystal Mark Writing Poerss 8 12 Writing TV Cornnercials 2 4 -Refer to Table 2.1. For Krystal, the opportunity cost of writing four TV commercials is ________ poems.

Refer to the information provided in Figure 2.4 below to answer the question(s) that follow. Figure 2.4 -According to Figure 2.4, as the economy moves from Point B to Point D, the opportunity cost of motorcycles, measured in terms of hybrid cars,

Refer to the information provided in Figure 2.3 below to answer the question(s) that follow. Figure 2.3 -Refer to Figure 2.3. Assume that this society's production possibility frontier is represented by Panel C. The opportunity cost of sailboats in terms of surfboards is

A decrease in the stock of capital will cause the

Comparative advantage refers to the ability to produce at a lower financial cost than a competitor.

Refer to the information provided in Figure 2.2 below for the economy of Microland to answer the question(s) that follow. Figure 2.2 -Refer to Figure 2.2. If Microland's economy is at Point B, it could produce more consumer goods

In a laissez-faire economy, ________ what gets produced, how it is produced, and who gets it.

A laissez-faire economy is one in which individual people and firms pursue their own self-interest without any central direction or regulation.

Refer to the information provided in Table 2.1 below to answer the following question(s). Table 2.1 Krystal Mark Writing Poerss 8 12 Writing TV Cornnercials 2 4 -Refer to Table 2.1. For Mark, the opportunity cost of writing one TV commercial is

The principle that the cost of something is equal to what is sacrificed to get it is known as the

The Scope and Method of Economics

Demand, Supply, and Market Equilibrium

Demand and Supply Applications

Elasticity

Household Behavior and Consumer Choice

The Production Process: the Behavior of Profit-Maximizing Firms

Short-Run Costs and Output Decisions

Long-Run Costs and Output Decisions

Input Demand: the Labor and Land Markets

Input Demand: the Capital Market and the Investment Decision

General Equilibrium and the Efficiency of Perfect Competition

Monopoly and Antitrust Policy

Oligopoly

Monopolistic Competition

Externalities, Public Goods, and Common Resources

Uncertainty and Asymmetric Information

Income Distribution and Poverty

Public Finance: the Economics of Taxation

International Trade, Comparative Advantage, and Protectionism

Economic Growth in Developing Economies

Critical Thinking About Research

Filters

Refer to the information provided in Figure 2.6 below to answer the question(s) that follow. Figure 2.6 -Refer to Figure 2.6. Which of the following will not cause the production possibility frontier to shift from ppf¹ to ppf²?