Question 1

Which of the following is not a characteristic of pure capitalism?

Accepted Answer

A) Private property rights 
B) Competitive markets 
C) Laissez-faire policies 
D) Central planning 
E) A reliance on prices to direct resources to their best uses 
A) Private property rights 
B) Competitive markets 
C) Laissez-faire policies 
D) Central planning 
E) A reliance on prices to direct resources to their best uses

Question 2

The economic question of "what to produce" is often referred to as the distribution question.

Accepted Answer

A) True 
 B)False

Question 3

Suppose you have a choice of working full-time during the summer or going full-time to summer school.Summer tuition and books are $2,200.If you worked,you could make $7,000.Your rent is $1,000 for the summer,regardless of your choice.If these are the only relevant costs to consider,the opportunity cost of going to summer school is:​

Accepted Answer

A) $2,200. 
B) $7,000. 
C) $8,000. 
D) $9,200. 
E) $10,200. 
A) $2,200. 
B) $7,000. 
C) $8,000. 
D) $9,200. 
E) $10,200.

Question 4

The term opportunity cost suggests that:

Accepted Answer

A) in any exchange situation where one person gains,someone else must lose. 
B) not all individuals make the most of life's opportunities. 
C) executives do not always recognize opportunities for profit as quickly as they should. 
D) the only factor that is important in decision making is cost. 
E) because goods are scarce,in order to get some good you must give up some other good in return. 
A) in any exchange situation where one person gains,someone else must lose. 
B) not all individuals make the most of life's opportunities. 
C) executives do not always recognize opportunities for profit as quickly as they should. 
D) the only factor that is important in decision making is cost. 
E) because goods are scarce,in order to get some good you must give up some other good in return.

Question 5

Adam Smith believed that people's pursuit of their own self-interests:

Accepted Answer

A) tended to promote general welfare. 
B) required the government's "invisible hand" to keep the economy running smoothly. 
C) might cause aggregate demand to be greater than aggregate supply. 
D) would increase the wealth of a nation,which was the quantity of gold and silver it owned. 
E) would decrease the wealth of a nation,which was its ability to produce goods and services. 
A) tended to promote general welfare. 
B) required the government's "invisible hand" to keep the economy running smoothly. 
C) might cause aggregate demand to be greater than aggregate supply. 
D) would increase the wealth of a nation,which was the quantity of gold and silver it owned. 
E) would decrease the wealth of a nation,which was its ability to produce goods and services.

Question 6

Which of the following provides the best evidence of the specialization of labor?

Accepted Answer

A) A firm that produces a line of related products,such as eight kinds of breakfast cereal 
B) An architect who is willing to practice in only one geographic area 
C) A physician who practices in a specialty area such as cardiology or orthopedic surgery 
D) A family that eats at Wendy's every Thursday night 
E) A retailer who sells goods but provides no services 
A) A firm that produces a line of related products,such as eight kinds of breakfast cereal 
B) An architect who is willing to practice in only one geographic area 
C) A physician who practices in a specialty area such as cardiology or orthopedic surgery 
D) A family that eats at Wendy's every Thursday night 
E) A retailer who sells goods but provides no services

Question 7

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.In any given amount of time,_____.

Accepted Answer

A) Maria has both an absolute and a comparative advantage in typing 
B) Maria has both an absolute and a comparative advantage in doing laundry 
C) Maria has a comparative advantage in both typing and doing laundry 
D) Hans has both an absolute and a comparative advantage in typing 
E) Hans has an absolute advantage in doing laundry 
A) Maria has both an absolute and a comparative advantage in typing 
B) Maria has both an absolute and a comparative advantage in doing laundry 
C) Maria has a comparative advantage in both typing and doing laundry 
D) Hans has both an absolute and a comparative advantage in typing 
E) Hans has an absolute advantage in doing laundry

Question 8

Which economic question does the decision to produce butter instead of guns answer?

Accepted Answer

A) What to produce? 
B) How to produce? 
C) For whom to produce? 
D) Who has a comparative advantage in gun production? 
E) Who has an absolute advantage in butter production? 
A) What to produce? 
B) How to produce? 
C) For whom to produce? 
D) Who has a comparative advantage in gun production? 
E) Who has an absolute advantage in butter production?

Question 9

It is possible for one person to have a comparative advantage in the production of all products.

Accepted Answer

A) True 
 B)False

Question 10

Each point on a production possibilities frontier requires full employment of resources.

Accepted Answer

A) True 
 B)False

Question 11

Janis mows the lawn in 1 hour and types a paper in 1 hour.Kristen mows the lawn in 2 hours and types a paper in 1 hour.Which of the following statements is true?

Accepted Answer

A) Kristen has an absolute advantage in typing and a comparative advantage in mowing. 
B) Janis has an absolute advantage in both activities and a comparative advantage in typing. 
C) Janis has an absolute advantage in both activities and a comparative advantage in mowing. 
D) The opportunity cost of mowing the lawn is greater for Kristen than it is for Janis. 
E) Neither Janis nor Kristen would gain from specialization. 
A) Kristen has an absolute advantage in typing and a comparative advantage in mowing. 
B) Janis has an absolute advantage in both activities and a comparative advantage in typing. 
C) Janis has an absolute advantage in both activities and a comparative advantage in mowing. 
D) The opportunity cost of mowing the lawn is greater for Kristen than it is for Janis. 
E) Neither Janis nor Kristen would gain from specialization.

Question 12

Opportunity cost is the difference between the benefits and the costs of a choice.

Accepted Answer

A) True 
 B)False

Question 13

A person who can produce more of a good than another person is said to possess a comparative advantage.

Accepted Answer

A) True 
 B)False

Question 14

Efficiency involves:

Accepted Answer

A) producing output using the least amount of labor. 
B) producing output using the least amount of capital. 
C) producing as far inside the production possibilities frontier as possible. 
D) producing only one out of many possible commodities. 
E) getting the maximum possible output from available resources. 
A) producing output using the least amount of labor. 
B) producing output using the least amount of capital. 
C) producing as far inside the production possibilities frontier as possible. 
D) producing only one out of many possible commodities. 
E) getting the maximum possible output from available resources.

Question 15

On a production possibilities frontier,the opportunity cost of one more unit of a commodity per time period is measured by the:

Accepted Answer

A) monetary price of the commodity. 
B) amount of the other commodity that must be sacrificed. 
C) amount of unemployed resources that must be used. 
D) amount of satisfaction it gives consumers. 
E) amount of tax paid to government for production,sale,and use of the commodity. 
A) monetary price of the commodity. 
B) amount of the other commodity that must be sacrificed. 
C) amount of unemployed resources that must be used. 
D) amount of satisfaction it gives consumers. 
E) amount of tax paid to government for production,sale,and use of the commodity.

Question 16

If an economy is operating at a point inside the production possibilities frontier,then:

Accepted Answer

A) some of the nation's resources are unemployed. 
B) the production decisions are made by the government. 
C) unlimited resources must satisfy scarce desires. 
D) using the existing resources efficiently will shift the production possibilities frontier outward. 
E) society is paying too much for wages. 
A) some of the nation's resources are unemployed. 
B) the production decisions are made by the government. 
C) unlimited resources must satisfy scarce desires. 
D) using the existing resources efficiently will shift the production possibilities frontier outward. 
E) society is paying too much for wages.

Question 17

A country has an absolute advantage in the production of a good if that country:

Accepted Answer

A) can produce the good using fewer resources than another country would require. 
B) has the lowest opportunity cost of producing the good and can produce it with the fewest resources. 
C) has the lowest opportunity cost of producing the good,regardless of whether it is produced with the fewest resources. 
D) has the greatest opportunity cost of producing the good,regardless of whether it is produced with the fewest resources. 
E) has the greatest opportunity cost of producing the good and produces it with the fewest resources. 
A) can produce the good using fewer resources than another country would require. 
B) has the lowest opportunity cost of producing the good and can produce it with the fewest resources. 
C) has the lowest opportunity cost of producing the good,regardless of whether it is produced with the fewest resources. 
D) has the greatest opportunity cost of producing the good,regardless of whether it is produced with the fewest resources. 
E) has the greatest opportunity cost of producing the good and produces it with the fewest resources.

Question 18

Which of the following is an example of the division of labor?

Accepted Answer

A) An author writing a book one chapter at a time 
B) A firm trying to get rid of a labor union 
C) Separating resources into four categories: land,labor,capital,and entrepreneurial ability 
D) Allocating revenue among a firm's resource suppliers 
E) Dividing an assembly process into separate steps 
A) An author writing a book one chapter at a time 
B) A firm trying to get rid of a labor union 
C) Separating resources into four categories: land,labor,capital,and entrepreneurial ability 
D) Allocating revenue among a firm's resource suppliers 
E) Dividing an assembly process into separate steps

Question 19

The division of labor:

Accepted Answer

A) allows more people to be employed. 
B) allows tasks to be performed more efficiently. 
C) makes people happier on the job. 
D) means that less management is required. 
E) means that less equipment will be used. 
A) allows more people to be employed. 
B) allows tasks to be performed more efficiently. 
C) makes people happier on the job. 
D) means that less management is required. 
E) means that less equipment will be used.

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.Aisha's opportunity cost of knitting one sweater is:

Accepted Answer

A) 240 cookies. 
B) 480 cookies. 
C) 32 cookies. 
D) 1/32 of a cookie. 
E) 16 cookies. 
A) 240 cookies. 
B) 480 cookies. 
C) 32 cookies. 
D) 1/32 of a cookie. 
E) 16 cookies.

Which of the following is not a characteristic of pure capitalism?

The economic question of "what to produce" is often referred to as the distribution question.

The term opportunity cost suggests that:

Adam Smith believed that people's pursuit of their own self-interests:

Which of the following provides the best evidence of the specialization of labor?

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.In any given amount of time,_____.

Which economic question does the decision to produce butter instead of guns answer?

It is possible for one person to have a comparative advantage in the production of all products.

Each point on a production possibilities frontier requires full employment of resources.

Janis mows the lawn in 1 hour and types a paper in 1 hour.Kristen mows the lawn in 2 hours and types a paper in 1 hour.Which of the following statements is true?

Opportunity cost is the difference between the benefits and the costs of a choice.

A person who can produce more of a good than another person is said to possess a comparative advantage.

Efficiency involves:

On a production possibilities frontier,the opportunity cost of one more unit of a commodity per time period is measured by the:

If an economy is operating at a point inside the production possibilities frontier,then:

A country has an absolute advantage in the production of a good if that country:

Which of the following is an example of the division of labor?

The division 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.Aisha's opportunity cost of knitting one sweater is:

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

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Exam 2: Some Tools of Economic Analysis

Which of the following is not a characteristic of pure capitalism?

The economic question of "what to produce" is often referred to as the distribution question.

The term opportunity cost suggests that:

Adam Smith believed that people's pursuit of their own self-interests:

Which of the following provides the best evidence of the specialization of labor?

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.In any given amount of time,_____.

Which economic question does the decision to produce butter instead of guns answer?

It is possible for one person to have a comparative advantage in the production of all products.

Each point on a production possibilities frontier requires full employment of resources.

Janis mows the lawn in 1 hour and types a paper in 1 hour.Kristen mows the lawn in 2 hours and types a paper in 1 hour.Which of the following statements is true?

Opportunity cost is the difference between the benefits and the costs of a choice.

A person who can produce more of a good than another person is said to possess a comparative advantage.

Efficiency involves:

On a production possibilities frontier,the opportunity cost of one more unit of a commodity per time period is measured by the:

If an economy is operating at a point inside the production possibilities frontier,then:

A country has an absolute advantage in the production of a good if that country:

Which of the following is an example of the division of labor?

The division 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.Aisha's opportunity cost of knitting one sweater is:

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