Question 1

The factors of production are:

Accepted Answer

A) money, labor, natural resources, and capital. 
B) technology, human capital, and natural resources. 
C) money, capital, and natural resources. 
D) labor, capital, and natural resources. 
A) money, labor, natural resources, and capital. 
B) technology, human capital, and natural resources. 
C) money, capital, and natural resources. 
D) labor, capital, and natural resources.

Question 2

Increasing the level of education in the United States will:

Accepted Answer

A) shift the production possibilities curve to the left. 
B) improve the level of technology. 
C) lead to increased natural resource use. 
D) lead to workers possessing greater human capital. 
A) shift the production possibilities curve to the left. 
B) improve the level of technology. 
C) lead to increased natural resource use. 
D) lead to workers possessing greater human capital.

Question 3

In a market capitalist economy, which of the following is not an accepted role for government?

Accepted Answer

A) provision of national defense 
B) enforcing a legal system 
C) establishing policies to encourage full employment 
D) All of the above are acceptable roles for government. 
A) provision of national defense 
B) enforcing a legal system 
C) establishing policies to encourage full employment 
D) All of the above are acceptable roles for government.

Question 4

Use the following to answer questions  
-(Exhibit: Bicycles and Radishes 1)The exhibit shows production possibilities curves for two countries that produce only radishes and bicycles.The axes of both graphs are measured in equivalent units.Country A is now operating at point M, and Country B is now operating at point N.The opportunity cost of producing an additional ton of radishes would be greater in:

Accepted Answer

A) Country A. 
B) Country B. 
C) neither; the opportunity cost would be the same in both countries. 
D) there is not enough information given to answer the question. 
A) Country A. 
B) Country B. 
C) neither; the opportunity cost would be the same in both countries. 
D) there is not enough information given to answer the question.

Question 5

The set of acquired skills and abilities that workers bring to the production of goods and services is:

Accepted Answer

A) money. 
B) wealth. 
C) human capital. 
D) natural ability. 
A) money. 
B) wealth. 
C) human capital. 
D) natural ability.

Question 6

Use the following to answer questions :
  
-(Exhibit: Guns and Butter)Points A, B, E, and F:

Accepted Answer

A) indicate combinations of guns and butter that society can produce using all of its factors efficiently. 
B) show that the opportunity cost of more guns increases, but that of more butter decreases as more of each good is produced.. 
C) indicate that society wants butter more than guns. 
D) indicate constant costs for guns and increasing costs for butter. 
A) indicate combinations of guns and butter that society can produce using all of its factors efficiently. 
B) show that the opportunity cost of more guns increases, but that of more butter decreases as more of each good is produced.. 
C) indicate that society wants butter more than guns. 
D) indicate constant costs for guns and increasing costs for butter.

Question 7

If an economy is producing a combination of goods that places it inside the production possibilities curve, then it has:

Accepted Answer

A) economic growth. 
B) full employment. 
C) efficiency. 
D) idle factors of production or inefficient use of resources. 
A) economic growth. 
B) full employment. 
C) efficiency. 
D) idle factors of production or inefficient use of resources.

Question 8

An economy is said to have a comparative advantage in the production of a good if it can:

Accepted Answer

A) produce that good with more resources than another economy. 
B) produce that good with a higher opportunity cost than another economy. 
C) produce that good outside its production possibilities curve. 
D) produce the good at a lower opportunity cost than another economy. 
A) produce that good with more resources than another economy. 
B) produce that good with a higher opportunity cost than another economy. 
C) produce that good outside its production possibilities curve. 
D) produce the good at a lower opportunity cost than another economy.

Question 9

The role of government in shifting the production possibilities curve to the right is considered:

Accepted Answer

A) supporting economic growth. 
B) redistributing income. 
C) providing certain goods and services. 
D) enforcing private property rights. 
A) supporting economic growth. 
B) redistributing income. 
C) providing certain goods and services. 
D) enforcing private property rights.

Question 10

The three broad types of factors of production are:

Accepted Answer

A) capital, labor, and natural resources. 
B) money, profit, and interest. 
C) stocks, bonds, and financial assets. 
D) technology, human capital, and comparative advantage. 
A) capital, labor, and natural resources. 
B) money, profit, and interest. 
C) stocks, bonds, and financial assets. 
D) technology, human capital, and comparative advantage.

Question 11

Technological improvements will:

Accepted Answer

A) leave the production possibilities curve unchanged. 
B) shift the production possibilities curve inward. 
C) shift the production possibilities curve to outward. 
D) necessarily lead to increased unemployment. 
A) leave the production possibilities curve unchanged. 
B) shift the production possibilities curve inward. 
C) shift the production possibilities curve to outward. 
D) necessarily lead to increased unemployment.

Question 12

In market capitalism:

Accepted Answer

A) factors of production are privately owned and decisions are made privately. 
B) factors of production are owned by the government but decisions are made privately. 
C) there is no role for government. 
D) the consumer has few choices to make. 
A) factors of production are privately owned and decisions are made privately. 
B) factors of production are owned by the government but decisions are made privately. 
C) there is no role for government. 
D) the consumer has few choices to make.

Question 13

Use the following to answer questions   
-(Exhibit: Strawberries and Submarines)Suppose the economy is now operating at pointC.Achieving production at point F would require:

Accepted Answer

A) that the economy achieve full employment and an efficient allocation of resources. 
B) that the economy reduce its production of strawberries. 
C) that the economy reduce its production of submarines. 
D) that the economy improve its technology or increase the quantities of factors of production it has. 
A) that the economy achieve full employment and an efficient allocation of resources. 
B) that the economy reduce its production of strawberries. 
C) that the economy reduce its production of submarines. 
D) that the economy improve its technology or increase the quantities of factors of production it has.

Question 14

Specialization arises because

Accepted Answer

A) some people don't like doing some tasks. 
B) differences in the costs of production give some producers a comparative advantage in the production of particular goods or services. 
C) the government directs resources into certain activities. 
D) inefficient production forces producers to trade. 
A) some people don't like doing some tasks. 
B) differences in the costs of production give some producers a comparative advantage in the production of particular goods or services. 
C) the government directs resources into certain activities. 
D) inefficient production forces producers to trade.

Question 15

In a command socialist economy:

Accepted Answer

A) resources are government owned but individuals make some decisions over their use. 
B) resources are government owned and government exercises broad power over their use. 
C) resources are privately owned and individuals make decisions over their use. 
D) resources are privately owned but government exercises broad power over their use. 
A) resources are government owned but individuals make some decisions over their use. 
B) resources are government owned and government exercises broad power over their use. 
C) resources are privately owned and individuals make decisions over their use. 
D) resources are privately owned but government exercises broad power over their use.

Question 16

The production possibilities curve shows various combinations of two products that an economy can produce when there is full employment and economic efficiency.

Accepted Answer

A) True 
 B)False

Question 17

Human capital is:

Accepted Answer

A) the set of acquired skills and abilities that workers bring to the production of goods and services. 
B) the financial wealth the economy has available to produce goods and services. 
C) the ability to produce one of two goods at relatively lower cost. 
D) a factor of production only if it occurs naturally. 
A) the set of acquired skills and abilities that workers bring to the production of goods and services. 
B) the financial wealth the economy has available to produce goods and services. 
C) the ability to produce one of two goods at relatively lower cost. 
D) a factor of production only if it occurs naturally.

Question 18

If an economy's factors of production were owned by the government sector and the coordinating activity was done by a government planning board, the economy would be called:

Accepted Answer

A) capitalism. 
B) market capitalism. 
C) command socialism. 
D) mixed capitalism. 
A) capitalism. 
B) market capitalism. 
C) command socialism. 
D) mixed capitalism.

Question 19

Knowledge that can be applied to the production of goods and services is:

Accepted Answer

A) natural resources. 
B) specialization. 
C) technology. 
D) comparative advantage. 
A) natural resources. 
B) specialization. 
C) technology. 
D) comparative advantage.

Question 20

Use the following to answer questions  
  
-(Exhibit: Production Possibilities Curve-Military and Civilian Goods)A movement from point G to point U could be a representation of what happened during:

Accepted Answer

A) World War II. 
B) the Great Depression. 
C) the postwar expansion following World War II. 
D) a period of rapid economic growth. 
A) World War II. 
B) the Great Depression. 
C) the postwar expansion following World War II. 
D) a period of rapid economic growth.

Exam 2: Confronting Scarcity: Choices in Production

The factors of production are:

Increasing the level of education in the United States will:

In a market capitalist economy, which of the following is not an accepted role for government?

The set of acquired skills and abilities that workers bring to the production of goods and services is:

Use the following to answer questions : -(Exhibit: Guns and Butter)Points A, B, E, and F:

If an economy is producing a combination of goods that places it inside the production possibilities curve, then it has:

An economy is said to have a comparative advantage in the production of a good if it can:

The role of government in shifting the production possibilities curve to the right is considered:

The three broad types of factors of production are:

Technological improvements will:

In market capitalism:

Use the following to answer questions -(Exhibit: Strawberries and Submarines)Suppose the economy is now operating at pointC.Achieving production at point F would require:

Specialization arises because

In a command socialist economy:

The production possibilities curve shows various combinations of two products that an economy can produce when there is full employment and economic efficiency.

Human capital is:

If an economy's factors of production were owned by the government sector and the coordinating activity was done by a government planning board, the economy would be called:

Knowledge that can be applied to the production of goods and services is:

Use the following to answer questions -(Exhibit: Production Possibilities Curve-Military and Civilian Goods)A movement from point G to point U could be a representation of what happened during:

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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