Question 1

By specializing in the production of particular goods, a nation is:

Accepted Answer

A) less likely to make efficient use of available resources. 
B) more likely to engage in international trade. 
C) able to become self-sufficient. 
D) unable to develop a comparative advantage. 
A) less likely to make efficient use of available resources. 
B) more likely to engage in international trade. 
C) able to become self-sufficient. 
D) unable to develop a comparative advantage.

Question 2

Use the following to answer questions :
  
-(Exhibit: Guns and Butter)The maximum amounts of guns and butter this economy can produce is:

Accepted Answer

A) 18 units of guns and 0 units of butter per period. 
B) 0 units of guns and 20 units of butter per period. 
C) 16 units of guns and 12 units of butter per period. 
D) all of the above combinations are maximum possible combinations. 
A) 18 units of guns and 0 units of butter per period. 
B) 0 units of guns and 20 units of butter per period. 
C) 16 units of guns and 12 units of butter per period. 
D) all of the above combinations are maximum possible combinations.

Question 3

Government's role of taxing some citizens and transferring income to others is considered:

Accepted Answer

A) enforcing a legal system. 
B) providing certain goods and services. 
C) redistributing income. 
D) maintaining the money supply. 
A) enforcing a legal system. 
B) providing certain goods and services. 
C) redistributing income. 
D) maintaining the money supply.

Question 4

A production possibilities curve measures cost in terms of dollars spent, not in terms of sacrificed alternatives.

Accepted Answer

A) True 
 B)False

Question 5

The best example of an increase in capital is:

Accepted Answer

A) The discovery of new oil reserves. 
B) new computer software. 
C) legal immigration of computer programmers. 
D) conversion of military facilities to civilian uses. 
A) The discovery of new oil reserves. 
B) new computer software. 
C) legal immigration of computer programmers. 
D) conversion of military facilities to civilian uses.

Question 6

The North Korean economy is currently classified as:

Accepted Answer

A) a mixed economy. 
B) market capitalism. 
C) command socialism. 
D) the same kind of economy as Sweden. 
A) a mixed economy. 
B) market capitalism. 
C) command socialism. 
D) the same kind of economy as Sweden.

Question 7

Which of the following statements is false?

Accepted Answer

A) Improvements in technology make most workers worse off because they lose their jobs to capital. 
B) Technological improvements affect most industries, including oil exploration, fast-food restaurants, and pet stores. 
C) When technology improves or changes, some jobs are lost. 
D) Technological improvements that make capital more productive often leads to higher wages for labor. 
A) Improvements in technology make most workers worse off because they lose their jobs to capital. 
B) Technological improvements affect most industries, including oil exploration, fast-food restaurants, and pet stores. 
C) When technology improves or changes, some jobs are lost. 
D) Technological improvements that make capital more productive often leads to higher wages for labor.

Question 8

If all factors of production that are available for use under current market conditions are being utilized, then the economy has:

Accepted Answer

A) economic growth. 
B) comparative advantage. 
C) full employment. 
D) inefficient production. 
A) economic growth. 
B) comparative advantage. 
C) full employment. 
D) inefficient production.

Question 9

The fact that a society's production possibilities curve is bowed out from the origin of a graph demonstrates the law of:

Accepted Answer

A) increasing opportunity cost. 
B) decreasing opportunity cost. 
C) constant opportunity cost. 
D) convex opportunity cost. 
A) increasing opportunity cost. 
B) decreasing opportunity cost. 
C) constant opportunity cost. 
D) convex opportunity cost.

Question 10

Governments often establish rules that influence how an economy operates.Which of the following rules will most likely increase the ability of society to produce goods and services?

Accepted Answer

A) laws allowing discrimination against women. 
B) providing tax incentives to encourage education by workers 
C) environmental regulations that prevent the use of industrial solvents in production 
D) increasing taxes on the formation of new capital 
A) laws allowing discrimination against women. 
B) providing tax incentives to encourage education by workers 
C) environmental regulations that prevent the use of industrial solvents in production 
D) increasing taxes on the formation of new capital

Question 11

Resources from nature that can be used to to produce other goods and services are called:

Accepted Answer

A) money. 
B) natural resources. 
C) labor. 
D) capital. 
A) money. 
B) natural resources. 
C) labor. 
D) capital.

Question 12

Use the following to answer questions   
-(Exhibit: Bicycles and Radishes 2)The country depicted in this exhibit is currently operating at point M.It could achieve production at point I only if it:

Accepted Answer

A) used its resources more efficiently. 
B) devoted more resources to radish production. 
C) devoted more resources to bicycle production. 
D) increased the quantities of capital, natural resources, or labor available or improved its technology. 
A) used its resources more efficiently. 
B) devoted more resources to radish production. 
C) devoted more resources to bicycle production. 
D) increased the quantities of capital, natural resources, or labor available or improved its technology.

Question 13

Use the following to answer questions  
-(Exhibit: Consumer and Capital Goods)If the economy is on Curve 1, it:

Accepted Answer

A) will grow more quickly if it chooses point X. 
B) will move to Curve 2 more quickly if it chooses point Y. 
C) will find that choosing either point X or point Y will result in the same growth rate. 
D) is at full employment at point X, but has unemployment at point Y. 
A) will grow more quickly if it chooses point X. 
B) will move to Curve 2 more quickly if it chooses point Y. 
C) will find that choosing either point X or point Y will result in the same growth rate. 
D) is at full employment at point X, but has unemployment at point Y.

Question 14

Two friends, one an engineer and the other an accountant, decide to form a partnership.If the accountant takes care of the books and the engineer runs the factory, they are likely to enhance the economy's productivity through:

Accepted Answer

A) scarcity. 
B) specialization of labor. 
C) a shift in the production possibilities curve. 
D) a movement along the production possibilities curve. 
A) scarcity. 
B) specialization of labor. 
C) a shift in the production possibilities curve. 
D) a movement along the production possibilities curve.

Question 15

Use the following to answer questions  
-(Exhibit: Consumer and Capital Goods)The movement from Curve 1 to Curve 2 indicates:

Accepted Answer

A) economic growth. 
B) going from unemployment to full employment. 
C) a decrease in the level of technology. 
D) instability. 
A) economic growth. 
B) going from unemployment to full employment. 
C) a decrease in the level of technology. 
D) instability.

Question 16

Efficient production implies that it is:

Accepted Answer

A) possible to produce more of all goods and services. 
B) it is possible to produce more of one good without producing less of another. 
C) not possible to produce more of one good without producing less of another good. 
D) producing at a combination of goods which lies between the production possibilities curve and the origin. 
A) possible to produce more of all goods and services. 
B) it is possible to produce more of one good without producing less of another. 
C) not possible to produce more of one good without producing less of another good. 
D) producing at a combination of goods which lies between the production possibilities curve and the origin.

Question 17

Use the following to answer questions  
-(Exhibit: Consumer and Capital Goods)Point Z:

Accepted Answer

A) is unattainable, all other things unchanged. 
B) is attainable if the economy is able to get to full employment. 
C) is attainable if the quantity and/or quality of factors decreases. 
D) will be attained as soon as the economy becomes efficient and moves to Curve 2. 
A) is unattainable, all other things unchanged. 
B) is attainable if the economy is able to get to full employment. 
C) is attainable if the quantity and/or quality of factors decreases. 
D) will be attained as soon as the economy becomes efficient and moves to Curve 2.

Question 18

Use the following to answer questions   
-(Exhibit: Strawberries and Submarines)Suppose the economy is now operating at point G.This implies that:

Accepted Answer

A) the economy can move to a point such as C only if it improves its technology. 
B) the economy is experiencing unemployment and/or inefficient allocation of resources. 
C) the economy lacks the resources to achieve a combination such as C. 
D) people in this economy don't really like strawberries and submarines. 
A) the economy can move to a point such as C only if it improves its technology. 
B) the economy is experiencing unemployment and/or inefficient allocation of resources. 
C) the economy lacks the resources to achieve a combination such as C. 
D) people in this economy don't really like strawberries and submarines.

Question 19

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)If the economy produces 2 units of consumer goods per period, it also can produce at most _______ units of capital goods per period.

Accepted Answer

A) 30 
B) 28 
C) 24 
D) 18 
A) 30 
B) 28 
C) 24 
D) 18

Question 20

If two countries participate in free trade:

Accepted Answer

A) every individual in each country will benefit. 
B) both countries as a whole will gain from the trade. 
C) one country will benefit, but the other country will experience reduced welfare.. 
D) neither country will benefit. 
A) every individual in each country will benefit. 
B) both countries as a whole will gain from the trade. 
C) one country will benefit, but the other country will experience reduced welfare.. 
D) neither country will benefit.

Exam 2: Confronting Scarcity: Choices in Production

By specializing in the production of particular goods, a nation is:

Use the following to answer questions : -(Exhibit: Guns and Butter)The maximum amounts of guns and butter this economy can produce is:

Government's role of taxing some citizens and transferring income to others is considered:

A production possibilities curve measures cost in terms of dollars spent, not in terms of sacrificed alternatives.

The best example of an increase in capital is:

The North Korean economy is currently classified as:

Which of the following statements is false?

If all factors of production that are available for use under current market conditions are being utilized, then the economy has:

The fact that a society's production possibilities curve is bowed out from the origin of a graph demonstrates the law of:

Governments often establish rules that influence how an economy operates.Which of the following rules will most likely increase the ability of society to produce goods and services?

Resources from nature that can be used to to produce other goods and services are called:

Use the following to answer questions -(Exhibit: Bicycles and Radishes 2)The country depicted in this exhibit is currently operating at point M.It could achieve production at point I only if it:

Use the following to answer questions -(Exhibit: Consumer and Capital Goods)If the economy is on Curve 1, it:

Two friends, one an engineer and the other an accountant, decide to form a partnership.If the accountant takes care of the books and the engineer runs the factory, they are likely to enhance the economy's productivity through:

Use the following to answer questions -(Exhibit: Consumer and Capital Goods)The movement from Curve 1 to Curve 2 indicates:

Efficient production implies that it is:

Use the following to answer questions -(Exhibit: Consumer and Capital Goods)Point Z:

Use the following to answer questions -(Exhibit: Strawberries and Submarines)Suppose the economy is now operating at point G.This implies that:

If two countries participate in free trade:

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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