Question 1

The set of mechanisms and institutions that resolve the basic economic questions is called the:

Accepted Answer

A) economic system. 
B) production possibilities dilemma. 
C) business resolution device. 
D) absolute advantage determination. 
E) comparative advantage determination. 
A) economic system. 
B) production possibilities dilemma. 
C) business resolution device. 
D) absolute advantage determination. 
E) comparative advantage determination.

Question 2

If Evan has an absolute advantage in cleaning and bookkeeping when compared to Gloria,then:

Accepted Answer

A) Evan must also have a comparative advantage in cleaning and bookkeeping. 
B) Evan must have a comparative advantage in cleaning. 
C) Evan must have a comparative advantage in bookkeeping. 
D) Gloria has a comparative advantage in neither activity. 
E) we can conclude nothing about comparative advantage. 
A) Evan must also have a comparative advantage in cleaning and bookkeeping. 
B) Evan must have a comparative advantage in cleaning. 
C) Evan must have a comparative advantage in bookkeeping. 
D) Gloria has a comparative advantage in neither activity. 
E) we can conclude nothing about comparative advantage.

Question 3

John takes 10 minutes to iron a shirt and 20 minutes to type a paper.Harry takes 10 minutes to iron a shirt and 30 minutes to type a paper.Which of the following statements is correct?

Accepted Answer

A) Harry has a comparative advantage in ironing. 
B) Harry has a comparative advantage in typing. 
C) Harry has an absolute advantage in typing. 
D) Harry has an absolute advantage in ironing. 
E) Neither can gain from specialization and exchange. 
A) Harry has a comparative advantage in ironing. 
B) Harry has a comparative advantage in typing. 
C) Harry has an absolute advantage in typing. 
D) Harry has an absolute advantage in ironing. 
E) Neither can gain from specialization and exchange.

Question 4

As resources are not perfectly adaptable to the production of both Good A and Good B,_____.

Accepted Answer

A) the opportunity cost of Good A increases as the production of Good A increases. 
B) the opportunity cost of Good A decreases as the production of Good A increases. 
C) it is impossible for the economy to produce both Good A and Good B. 
D) the opportunity cost of Good A is constant. 
E) the opportunity cost of Good B is constant. 
A) the opportunity cost of Good A increases as the production of Good A increases. 
B) the opportunity cost of Good A decreases as the production of Good A increases. 
C) it is impossible for the economy to produce both Good A and Good B. 
D) the opportunity cost of Good A is constant. 
E) the opportunity cost of Good B is constant.

Question 5

Opportunity cost is always measured in dollar terms,rather than in terms of real goods and services.

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 baking one cookie is:

Accepted Answer

A) 1 sweater. 
B) 5 sweaters. 
C) 48 sweaters. 
D) 1/48 of a sweater. 
E) 48 cookies. 
A) 1 sweater. 
B) 5 sweaters. 
C) 48 sweaters. 
D) 1/48 of a sweater. 
E) 48 cookies.

Question 7

Which of the following would not shift the production possibilities frontier?

Accepted Answer

A) An increase in capital stock 
B) A war that destroyed many buildings 
C) A technological improvement that improved fuel efficiency in cars 
D) A decrease in the size of the labor force 
E) A change to a more inefficient production process 
A) An increase in capital stock 
B) A war that destroyed many buildings 
C) A technological improvement that improved fuel efficiency in cars 
D) A decrease in the size of the labor force 
E) A change to a more inefficient production process

Question 8

Which of the following is a characteristic of a pure command economy?

Accepted Answer

A) All resources are privately owned. 
B) Economic activity is coordinated by the price system. 
C) Competitive markets guide resources to their highest-valued uses. 
D) Centralized economic planning is used to answer the basic economic questions. 
E) Economic choices are voluntary and are based on rational self-interest. 
A) All resources are privately owned. 
B) Economic activity is coordinated by the price system. 
C) Competitive markets guide resources to their highest-valued uses. 
D) Centralized economic planning is used to answer the basic economic questions. 
E) Economic choices are voluntary and are based on rational self-interest.

Question 9

Absolute advantage is based on opportunity cost.

Accepted Answer

A) True 
 B)False

Question 10

If dairy farmers use automatic milking machines instead of milking by hand,which economic question does their decision answer?

Accepted Answer

A) What to produce? 
B) How to produce? 
C) For whom to produce? 
D) Who has a comparative advantage in milking? 
E) What is the price of milk? 
A) What to produce? 
B) How to produce? 
C) For whom to produce? 
D) Who has a comparative advantage in milking? 
E) What is the price of milk?

Question 11

If you enjoy playing golf,the opportunity cost of cleaning your room:

Accepted Answer

A) is greater on sunny days than it is on rainy days. 
B) is the same on sunny days as it is on rainy days. 
C) is smaller on sunny days than it is on rainy days. 
D) does not change with weather conditions. 
E) is equal to the opportunity cost of any other chore you have to do that day. 
A) is greater on sunny days than it is on rainy days. 
B) is the same on sunny days as it is on rainy days. 
C) is smaller on sunny days than it is on rainy days. 
D) does not change with weather conditions. 
E) is equal to the opportunity cost of any other chore you have to do that day.

Question 12

-The following figure has four graphs showing the production possibilities frontier for capital goods and consumer goods.Assuming an influx of immigrants benefits the production of both consumer and capital goods,which of the graphs below best illustrates the impact on the production possibilities frontier?

Accepted Answer

A) a. 
B) b. 
C) c. 
D) d 
A) a. 
B) b. 
C) c. 
D) d

Question 13

Any movement along a bowed-out production possibilities frontier involves the production of:

Accepted Answer

A) more of both goods. 
B) more of one good and less of the other. 
C) less of both goods. 
D) more resources. 
E) better technology. 
A) more of both goods. 
B) more of one good and less of the other. 
C) less of both goods. 
D) more resources. 
E) better technology.

Question 14

On a bowed-out production possibilities frontier showing possible output levels of Good A and good B,the opportunity cost of producing the first 10 units of Good A will usually be:

Accepted Answer

A) the same as the opportunity cost of producing the next 10 units of Good A. 
B) lower than the opportunity cost of producing the next 10 units of Good A. 
C) greater than the opportunity cost of making the next 10 units of Good A. 
D) 10 units of Good A. 
E) 10 units of Good B. 
A) the same as the opportunity cost of producing the next 10 units of Good A. 
B) lower than the opportunity cost of producing the next 10 units of Good A. 
C) greater than the opportunity cost of making the next 10 units of Good A. 
D) 10 units of Good A. 
E) 10 units of Good B.

Question 15

The primary differences in economic structure among different countries relate to ownership of resources and the manner in which economic activities are coordinated.

Accepted Answer

A) True 
 B)False

Question 16

Pure capitalism and a pure command system represent:

Accepted Answer

A) two different ways of answering the basic economic questions. 
B) two names describing the same method of answering the basic economic questions. 
C) the only two ways of answering the basic economic questions. 
D) the most efficient ways to answer the basic economic questions. 
E) two market systems of resource distribution. 
A) two different ways of answering the basic economic questions. 
B) two names describing the same method of answering the basic economic questions. 
C) the only two ways of answering the basic economic questions. 
D) the most efficient ways to answer the basic economic questions. 
E) two market systems of resource distribution.

Question 17

Barter occurs when:

Accepted Answer

A) two people share everything. 
B) one product is exchanged directly for another product. 
C) money is used to buy goods. 
D) money is exchanged directly for other money. 
E) goods are used to buy money. 
A) two people share everything. 
B) one product is exchanged directly for another product. 
C) money is used to buy goods. 
D) money is exchanged directly for other money. 
E) goods are used to buy money.

The set of mechanisms and institutions that resolve the basic economic questions is called the:

If Evan has an absolute advantage in cleaning and bookkeeping when compared to Gloria,then:

John takes 10 minutes to iron a shirt and 20 minutes to type a paper.Harry takes 10 minutes to iron a shirt and 30 minutes to type a paper.Which of the following statements is correct?

As resources are not perfectly adaptable to the production of both Good A and Good B,_____.

Opportunity cost is always measured in dollar terms,rather than in terms of real goods and services.

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 baking one cookie is:

Which of the following would not shift the production possibilities frontier?

Which of the following is a characteristic of a pure command economy?

Absolute advantage is based on opportunity cost.

If dairy farmers use automatic milking machines instead of milking by hand,which economic question does their decision answer?

If you enjoy playing golf,the opportunity cost of cleaning your room:

Any movement along a bowed-out production possibilities frontier involves the production of:

On a bowed-out production possibilities frontier showing possible output levels of Good A and good B,the opportunity cost of producing the first 10 units of Good A will usually be:

The primary differences in economic structure among different countries relate to ownership of resources and the manner in which economic activities are coordinated.

Pure capitalism and a pure command system represent:

Barter occurs when:

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 set of mechanisms and institutions that resolve the basic economic questions is called the:

If Evan has an absolute advantage in cleaning and bookkeeping when compared to Gloria,then:

John takes 10 minutes to iron a shirt and 20 minutes to type a paper.Harry takes 10 minutes to iron a shirt and 30 minutes to type a paper.Which of the following statements is correct?

As resources are not perfectly adaptable to the production of both Good A and Good B,_____.

Opportunity cost is always measured in dollar terms,rather than in terms of real goods and services.

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 baking one cookie is:

Which of the following would not shift the production possibilities frontier?

Which of the following is a characteristic of a pure command economy?

Absolute advantage is based on opportunity cost.

If dairy farmers use automatic milking machines instead of milking by hand,which economic question does their decision answer?

If you enjoy playing golf,the opportunity cost of cleaning your room:

Any movement along a bowed-out production possibilities frontier involves the production of:

On a bowed-out production possibilities frontier showing possible output levels of Good A and good B,the opportunity cost of producing the first 10 units of Good A will usually be:

The primary differences in economic structure among different countries relate to ownership of resources and the manner in which economic activities are coordinated.

Pure capitalism and a pure command system represent:

Barter occurs when:

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