Question 1

The typical concave (i.e. ,bowed-out)shape of the production possibilities frontier reflects the law of increasing opportunity cost.

Accepted Answer

A) True 
 B)False  True

Question 2

One flaw of pure capitalism is that a person who owns no resources could starve.

Accepted Answer

A) True 
 B)False  True

Question 3

The production possibilities frontier represents the boundary between attainable and unattainable prices of commodities.

Accepted Answer

A) True 
 B)False  False

Question 4

A major distinguishing feature between capitalist and socialist (or command)economies is that:

Accepted Answer

A) the average citizen is always wealthier in capitalist economies than in socialist economies. 
B) decision making is typically decentralized in socialist economies and is centralized in capitalist economies. 
C) resources are privately owned in capitalist economies and private property rights are enforced by a dictator in command economies. 
D) resources are publicly owned in capitalist economies. 
E) decision making is typically decentralized under capitalism,while it is centralized in command economies. 
A) the average citizen is always wealthier in capitalist economies than in socialist economies. 
B) decision making is typically decentralized in socialist economies and is centralized in capitalist economies. 
C) resources are privately owned in capitalist economies and private property rights are enforced by a dictator in command economies. 
D) resources are publicly owned in capitalist economies. 
E) decision making is typically decentralized under capitalism,while it is centralized in command economies.

Question 5

The opportunity cost of going to college consists of more than just the tuition that will be paid.

Accepted Answer

A) True 
 B)False

Question 6

In one week,Mohammed can knit 5 sweaters or bake 240 cookies.In one week,Aisha can knit 15 sweaters or bake 480 cookies.Mohammed's opportunity cost of knitting one sweater is:

Accepted Answer

A) 480 cookies. 
B) 240 cookies. 
C) 48 sweaters. 
D) 1/48 of a cookie. 
E) 48 cookies. 
A) 480 cookies. 
B) 240 cookies. 
C) 48 sweaters. 
D) 1/48 of a cookie. 
E) 48 cookies.

Question 7

A point inside the production possibilities curve illustrates a situation in which resources are not fully employed.

Accepted Answer

A) True 
 B)False

Question 8

A point outside the production possibilities frontier:

Accepted Answer

A) represents unemployment of resources. 
B) represents full employment of resources. 
C) would not represent an efficient combination of goods. 
D) cannot be reached using the available technology. 
E) is less desirable than one that lies inside the frontier. 
A) represents unemployment of resources. 
B) represents full employment of resources. 
C) would not represent an efficient combination of goods. 
D) cannot be reached using the available technology. 
E) is less desirable than one that lies inside the frontier.

Question 9

Hans can do 4 loads of laundry per hour,and he can type 6 pages per hour.Maria can do 12 loads of laundry per hour,and she can type 8 pages per hour.Maria's opportunity cost of doing one load of laundry is:

Accepted Answer

A) 4 pages. 
B) 6 pages. 
C) 2/3 of a page. 
D) 3/2 of a page. 
E) impossible to compute without additional information. 
A) 4 pages. 
B) 6 pages. 
C) 2/3 of a page. 
D) 3/2 of a page. 
E) impossible to compute without additional information.

Question 10

The opportunity cost of going to college is the same for all students who are receiving full-tuition scholarships.

Accepted Answer

A) True 
 B)False

Question 11

If Helen can paint one room in the time it takes her to bake 40 cakes and Josh can paint one room in the time it takes him to bake 60 cakes,which of the following is true?

Accepted Answer

A) The opportunity cost of painting is higher for Helen. 
B) The opportunity cost of baking cakes is lower for Josh. 
C) The opportunity cost of painting one room is 1/40 of a cake for Helen. 
D) The opportunity cost of baking one cake is 60 rooms painted for Josh. 
E) The opportunity cost of cakes cannot be computed. 
A) The opportunity cost of painting is higher for Helen. 
B) The opportunity cost of baking cakes is lower for Josh. 
C) The opportunity cost of painting one room is 1/40 of a cake for Helen. 
D) The opportunity cost of baking one cake is 60 rooms painted for Josh. 
E) The opportunity cost of cakes cannot be computed.

Question 12

Don can produce 10 pens or 20 pencils in one hour while Bob can produce 5 pencils or 15 pens in one hour.Which of the following statements is correct?

Accepted Answer

A) Bob has an absolute advantage over Don in the production of pencils. 
B) Bob has an absolute advantage over Don in the production of pens. 
C) Bob has a comparative advantage over Don in the production of pencils. 
D) Don has a comparative advantage over Bob in the production of pens. 
E) Don does not have a comparative advantage in the production of either good. 
A) Bob has an absolute advantage over Don in the production of pencils. 
B) Bob has an absolute advantage over Don in the production of pens. 
C) Bob has a comparative advantage over Don in the production of pencils. 
D) Don has a comparative advantage over Bob in the production of pens. 
E) Don does not have a comparative advantage in the production of either good.

Question 13

​  
-The figure below shows the production possibilities frontier for education and food production.Which of the following would cause the production possibilities frontier to shift from AA to BA?

Accepted Answer

A) A drought that affected food production but had no effect on education. 
B) A technological improvement in education that had no effect on food production. 
C) A technological improvement in food production that had no effect on education. 
D) A disease that affected students' ability to learn (and therefore education)but not food production. 
E) An increase in the size of the labor force that affected both food production and education. 
A) A drought that affected food production but had no effect on education. 
B) A technological improvement in education that had no effect on food production. 
C) A technological improvement in food production that had no effect on education. 
D) A disease that affected students' ability to learn (and therefore education)but not food production. 
E) An increase in the size of the labor force that affected both food production and education.

Question 14

Of the various types of economic systems,pure market capitalism involves the greatest government interference and control over the economy.

Accepted Answer

A) True 
 B)False

Question 15

A rational decision maker engages in an activity if that activity is more attractive than the best alternative.

Accepted Answer

A) True 
 B)False

Question 16

The reason that the production possibilities frontier is usually a bow-shaped curve instead of a straight line is that:

Accepted Answer

A) a curve makes it easier to illustrate the concepts of scarcity and prices than a straight line. 
B) early economists began drawing them in this way and the convention has continued throughout the years. 
C) output eventually reaches a maximum and then declines. 
D) resources are not perfectly adaptable to the production of all goods. 
E) the frontier will shift outward over time. 
A) a curve makes it easier to illustrate the concepts of scarcity and prices than a straight line. 
B) early economists began drawing them in this way and the convention has continued throughout the years. 
C) output eventually reaches a maximum and then declines. 
D) resources are not perfectly adaptable to the production of all goods. 
E) the frontier will shift outward over time.

Question 17

Adam Smith's term "the invisible hand" refers to:

Accepted Answer

A) the hidden role of government in setting regulations that govern trading in markets. 
B) the most capable entrepreneurs in the economy. 
C) market forces. 
D) the unseen work of the financial markets that facilitates trade. 
E) the role of technological change and random events in the economy. 
A) the hidden role of government in setting regulations that govern trading in markets. 
B) the most capable entrepreneurs in the economy. 
C) market forces. 
D) the unseen work of the financial markets that facilitates trade. 
E) the role of technological change and random events in the economy.

Question 18

If Sam can chop up more carrots per minute than Joe can,then:

Accepted Answer

A) Joe has an absolute advantage in carrot chopping. 
B) Joe must have a comparative advantage in carrot chopping. 
C) Sam has an absolute advantage in carrot chopping. 
D) Sam must have a comparative advantage in carrot chopping. 
E) we can conclude nothing about absolute advantage. 
A) Joe has an absolute advantage in carrot chopping. 
B) Joe must have a comparative advantage in carrot chopping. 
C) Sam has an absolute advantage in carrot chopping. 
D) Sam must have a comparative advantage in carrot chopping. 
E) we can conclude nothing about absolute advantage.

Question 19

The specialization of labor:

Accepted Answer

A) increases productivity without creating any problems. 
B) reduces productivity and is usually eliminated by business firms. 
C) can create problems of boredom and repetitive motion injuries. 
D) prevents the introduction of more sophisticated and efficient production techniques. 
E) ignores individual preferences and natural abilities. 
A) increases productivity without creating any problems. 
B) reduces productivity and is usually eliminated by business firms. 
C) can create problems of boredom and repetitive motion injuries. 
D) prevents the introduction of more sophisticated and efficient production techniques. 
E) ignores individual preferences and natural abilities.

Question 20

In one week,Mohammed can knit 5 sweaters or bake 240 cookies.In one week,Aisha can knit 15 sweaters or bake 480 cookies.Mohammed and Aisha would produce the maximum quantities of both cookies and sweaters if:

Accepted Answer

A) Mohammed knitted and baked and Aisha did nothing. 
B) Aisha knitted and baked and Mohammed did nothing. 
C) Mohammed knitted and Aisha baked. 
D) Aisha knitted and Mohammed baked. 
E) Mohammed knitted and baked and Aisha just knitted. 
A) Mohammed knitted and baked and Aisha did nothing. 
B) Aisha knitted and baked and Mohammed did nothing. 
C) Mohammed knitted and Aisha baked. 
D) Aisha knitted and Mohammed baked. 
E) Mohammed knitted and baked and Aisha just knitted.

The typical concave (i.e. ,bowed-out)shape of the production possibilities frontier reflects the law of increasing opportunity cost.

One flaw of pure capitalism is that a person who owns no resources could starve.

The production possibilities frontier represents the boundary between attainable and unattainable prices of commodities.

A major distinguishing feature between capitalist and socialist (or command)economies is that:

The opportunity cost of going to college consists of more than just the tuition that will be paid.

In one week,Mohammed can knit 5 sweaters or bake 240 cookies.In one week,Aisha can knit 15 sweaters or bake 480 cookies.Mohammed's opportunity cost of knitting one sweater is:

A point inside the production possibilities curve illustrates a situation in which resources are not fully employed.

A point outside the production possibilities frontier:

Hans can do 4 loads of laundry per hour,and he can type 6 pages per hour.Maria can do 12 loads of laundry per hour,and she can type 8 pages per hour.Maria's opportunity cost of doing one load of laundry is:

The opportunity cost of going to college is the same for all students who are receiving full-tuition scholarships.

If Helen can paint one room in the time it takes her to bake 40 cakes and Josh can paint one room in the time it takes him to bake 60 cakes,which of the following is true?

Don can produce 10 pens or 20 pencils in one hour while Bob can produce 5 pencils or 15 pens in one hour.Which of the following statements is correct?

-The figure below shows the production possibilities frontier for education and food production.Which of the following would cause the production possibilities frontier to shift from AA to BA?

Of the various types of economic systems,pure market capitalism involves the greatest government interference and control over the economy.

A rational decision maker engages in an activity if that activity is more attractive than the best alternative.

The reason that the production possibilities frontier is usually a bow-shaped curve instead of a straight line is that:

Adam Smith's term "the invisible hand" refers to:

If Sam can chop up more carrots per minute than Joe can,then:

The specialization of labor:

In one week,Mohammed can knit 5 sweaters or bake 240 cookies.In one week,Aisha can knit 15 sweaters or bake 480 cookies.Mohammed and Aisha would produce the maximum quantities of both cookies and sweaters if:

The Art and Science of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the U S Economy

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters

Exam 2: Some Tools of Economic Analysis

The typical concave (i.e. ,bowed-out)shape of the production possibilities frontier reflects the law of increasing opportunity cost.

One flaw of pure capitalism is that a person who owns no resources could starve.

The production possibilities frontier represents the boundary between attainable and unattainable prices of commodities.

A major distinguishing feature between capitalist and socialist (or command)economies is that:

The opportunity cost of going to college consists of more than just the tuition that will be paid.

In one week,Mohammed can knit 5 sweaters or bake 240 cookies.In one week,Aisha can knit 15 sweaters or bake 480 cookies.Mohammed's opportunity cost of knitting one sweater is:

A point inside the production possibilities curve illustrates a situation in which resources are not fully employed.

A point outside the production possibilities frontier:

Hans can do 4 loads of laundry per hour,and he can type 6 pages per hour.Maria can do 12 loads of laundry per hour,and she can type 8 pages per hour.Maria's opportunity cost of doing one load of laundry is:

The opportunity cost of going to college is the same for all students who are receiving full-tuition scholarships.

If Helen can paint one room in the time it takes her to bake 40 cakes and Josh can paint one room in the time it takes him to bake 60 cakes,which of the following is true?

Don can produce 10 pens or 20 pencils in one hour while Bob can produce 5 pencils or 15 pens in one hour.Which of the following statements is correct?

​ -The figure below shows the production possibilities frontier for education and food production.Which of the following would cause the production possibilities frontier to shift from AA to BA?

Of the various types of economic systems,pure market capitalism involves the greatest government interference and control over the economy.

A rational decision maker engages in an activity if that activity is more attractive than the best alternative.

The reason that the production possibilities frontier is usually a bow-shaped curve instead of a straight line is that:

Adam Smith's term "the invisible hand" refers to:

If Sam can chop up more carrots per minute than Joe can,then:

The specialization of labor:

In one week,Mohammed can knit 5 sweaters or bake 240 cookies.In one week,Aisha can knit 15 sweaters or bake 480 cookies.Mohammed and Aisha would produce the maximum quantities of both cookies and sweaters if:

The Art and Science of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the U S Economy

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters

-The figure below shows the production possibilities frontier for education and food production.Which of the following would cause the production possibilities frontier to shift from AA to BA?