Question 1

Comparative advantage leads to producing at a:

Accepted Answer

A) higher opportunity cost. 
B) lower opportunity cost. 
C) higher dollar cost. 
D) point where costs just begin to fall. 
A) higher opportunity cost. 
B) lower opportunity cost. 
C) higher dollar cost. 
D) point where costs just begin to fall.

Question 2

Inefficiency occurs when an economy is operating outside its production possibilities curve.

Accepted Answer

A) True 
 B)False

Question 3

Assume an economy is operating on its production possibilities curve, which shows the production of military and civilian goods.If the output of military goods is increased, the output of civilian goods:

Accepted Answer

A) will increase too. 
B) will not change. 
C) must decrease. 
D) may increase or decrease. 
A) will increase too. 
B) will not change. 
C) must decrease. 
D) may increase or decrease.

Question 4

Capital, labor, and natural resources combine to produce goods and services.Which of the following will not lead to an increase in the ability of an economy to produce goods and services?

Accepted Answer

A) increased training for workers 
B) establishing a more productive technology 
C) new government restrictions on which technologies may be used to produce goods and services 
D) discovery of new oil reserves 
A) increased training for workers 
B) establishing a more productive technology 
C) new government restrictions on which technologies may be used to produce goods and services 
D) discovery of new oil reserves

Question 5

The law of increasing opportunity cost is associated with the slope of the:

Accepted Answer

A) demand curve. 
B) supply curve. 
C) output curve. 
D) production possibilities curve. 
A) demand curve. 
B) supply curve. 
C) output curve. 
D) production possibilities curve.

Question 6

Money is considered to be a factor of production.

Accepted Answer

A) True 
 B)False

Question 7

Use the following to answer questions 
  
-(Exhibit: Production Possibilities Curve 2)The point representing a combination of consumer goods and capital goods that would result from underutilization or inefficient use of society's available resources is point:

Accepted Answer

A) N. 
B) P. 
C) Q. 
D) R. 
A) N. 
B) P. 
C) Q. 
D) R.

Question 8

If an economy has to sacrifice only one unit of good X for each unit of good Y produced throughout the relevant range, then its production possibilities curve has a(n):

Accepted Answer

A) zero slope. 
B) constant, negative slope. 
C) increasing, negative slope. 
D) decreasing, negative slope. 
A) zero slope. 
B) constant, negative slope. 
C) increasing, negative slope. 
D) decreasing, negative slope.

Question 9

Use the following to answer questions 
Production Possibilities Schedule 1 $$\begin{array} { | l | c | c | c | c | c | c | } 
\hline { \text { Alternatives } } & \text { A } & \text { B } & \text { C } & \text { D } & \text { E } & \text { F } \
\hline \begin{array} { l } 
\text { Consumer goods } \
\text { per period }
\end{array} & 0 & 1 & 2 & 3 & 4 & 5 \
\hline \begin{array} { l } 
\text { Capital goods per } \
\text { period }
\end{array} & 30 & 28 & 24 & 18 & 10 & 0 \
\hline
\end{array}$$
-(Exhibit: Production Possibilities Schedule 1)The opportunity cost of producing the fourth unit of consumer goods is ___ __ units of capital goods.

Accepted Answer

A) 2 
B) 4 
C) 6 
D) 8 
A) 2 
B) 4 
C) 6 
D) 8

Question 10

A source of economic growth is:

Accepted Answer

A) idle factors of production. 
B) unemployment. 
C) more money. 
D) more factors of production. 
A) idle factors of production. 
B) unemployment. 
C) more money. 
D) more factors of production.

Question 11

Comparative advantage and trade allow nations to specialize in the production of a larger number of different goods.

Accepted Answer

A) True 
 B)False

Question 12

One of the two criteria for a resource to be considered as a natural resource is that it must:

Accepted Answer

A) have been produced. 
B) be found in nature. 
C) be part of a factory or building. 
D) not be used to produce goods and services. 
A) have been produced. 
B) be found in nature. 
C) be part of a factory or building. 
D) not be used to produce goods and services.

Question 13

If wages are higher in the United States than in Brazil, then:

Accepted Answer

A) trade is still beneficial to the United States and Brazil. 
B) Brazil will not have a comparative advantage in the production of any good. 
C) the United States cannot have a comparative advantage in the production of any good. 
D) trade with Brazil will clearly lower wages in the United States. 
A) trade is still beneficial to the United States and Brazil. 
B) Brazil will not have a comparative advantage in the production of any good. 
C) the United States cannot have a comparative advantage in the production of any good. 
D) trade with Brazil will clearly lower wages in the United States.

Exam 2: Confronting Scarcity: Choices in Production

Comparative advantage leads to producing at a:

Inefficiency occurs when an economy is operating outside its production possibilities curve.

Assume an economy is operating on its production possibilities curve, which shows the production of military and civilian goods.If the output of military goods is increased, the output of civilian goods:

Capital, labor, and natural resources combine to produce goods and services.Which of the following will not lead to an increase in the ability of an economy to produce goods and services?

The law of increasing opportunity cost is associated with the slope of the:

Money is considered to be a factor of production.

Use the following to answer questions -(Exhibit: Production Possibilities Curve 2)The point representing a combination of consumer goods and capital goods that would result from underutilization or inefficient use of society's available resources is point:

If an economy has to sacrifice only one unit of good X for each unit of good Y produced throughout the relevant range, then its production possibilities curve has a(n):

A source of economic growth is:

Comparative advantage and trade allow nations to specialize in the production of a larger number of different goods.

One of the two criteria for a resource to be considered as a natural resource is that it must:

If wages are higher in the United States than in Brazil, then:

Economics: the Study of Choice

Demand and Supply

Applications of Demand and Supply

Macroeconomics: the Big Picture

Measuring Total Output and Income

Aggregate Demand and Aggregate Supply

Economic Growth

The Nature and Creation of Money

Monopoly

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

Inflation and Unemployment

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Macroeconomics: the Big Picture

Measuring Total Income and Output

Aggregate Demand and Aggregate Supply

Economic Growth

The Nature and Creation of Money

Financial Markets and the Economy

Monetary Policy and the Fed

Government and Fiscal Policy

Consumption and the Aggregate Expenditures Model

Investment and Economic Activity

Net Exports and International Finance

Macro Inflation and Unemployment

Macro a Brief History of Macroeconomic Thought and Policy

Economic Development

Socialist Economies in Transition

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