Question 1

From the economist's point of view,

Accepted Answer

A) wants and needs are exactly the same. 
B) a want is a lifesaving necessity. 
C) needs are objectively undefinable. 
D) we all have wants but only very poor people have needs. 
A) wants and needs are exactly the same. 
B) a want is a lifesaving necessity. 
C) needs are objectively undefinable. 
D) we all have wants but only very poor people have needs.

Question 2

Briefly explain why people make choices.

Accepted Answer

People make choices because of

Question 3

When a country specializes and trades with other countries, it is most likely that it specializes in goods for which

Accepted Answer

A) it has a comparative advantage. 
B) it has an absolute advantage. 
C) it has no advantage. 
D) are very costly to produce. 
A) it has a comparative advantage. 
B) it has an absolute advantage. 
C) it has no advantage. 
D) are very costly to produce.

Question 4

A production possibilities curve will shift outward or to the right for all of the following reasons EXCEPT

Accepted Answer

A) an increase in the unemployment rate. 
B) an increase in the quality of the labor force. 
C) an improvement in production technology. 
D) a discovery of a new source of renewable energy. 
A) an increase in the unemployment rate. 
B) an increase in the quality of the labor force. 
C) an improvement in production technology. 
D) a discovery of a new source of renewable energy.

Question 5

A man-made resource such as a building or a machine is an example of which resource?

Accepted Answer

A) Entrepreneurial ability 
B) Labor 
C) Physical capital 
D) Human capital 
A) Entrepreneurial ability 
B) Labor 
C) Physical capital 
D) Human capital

Question 6

Suppose an acre of land yields 100 bushels of corn and that one bushel of corn provides enough seed for one-quarter of an acre of land. The opportunity cost of consuming another 100 bushels of corn today is

Accepted Answer

A) 100 bushels of corn next year. 
B) 25 bushels of corn next year. 
C) 10 bushels of corn next year. 
D) 2.5 bushels of corn next year. 
A) 100 bushels of corn next year. 
B) 25 bushels of corn next year. 
C) 10 bushels of corn next year. 
D) 2.5 bushels of corn next year.

Question 7

Explain the concept of the law of increasing additional cost.

Accepted Answer

The law of increasing relative cost is t

Question 8

Distinguish between scarcity and shortages.

Accepted Answer

Scarcity exists because the wants of hum

Question 9

If Irene can make either four chairs or one table in an hour and Greg can make either three chairs or two tables in an hour then

Accepted Answer

A) Irene has the absolute advantage in the production of chairs. 
B) Irene has the comparative advantage in the production of tables. 
C) Greg has the absolute advantage in the production of chairs. 
D) Greg has the comparative advantage in the production of chairs. 
A) Irene has the absolute advantage in the production of chairs. 
B) Irene has the comparative advantage in the production of tables. 
C) Greg has the absolute advantage in the production of chairs. 
D) Greg has the comparative advantage in the production of chairs.

Question 10

-Look at the following production possibilities table for smartphones and tablets. The table shows the maximum combination of smartphones and tablets of corn that can be produced, when all resources are fully employed. Production Possibilities
Good A B C D E   Based on the above information,

Accepted Answer

A) there is no trade-off between smartphones and tablets. 
B) the opportunity cost of producing 30 instead of 20 smartphones is 120 tablets. 
C) the opportunity cost of producing 40 instead of 30 smartphones is 30 tablets. 
D) the opportunity cost of producing 90 instead of 50 tablets is 50 smartphones. 
A) there is no trade-off between smartphones and tablets. 
B) the opportunity cost of producing 30 instead of 20 smartphones is 120 tablets. 
C) the opportunity cost of producing 40 instead of 30 smartphones is 30 tablets. 
D) the opportunity cost of producing 90 instead of 50 tablets is 50 smartphones.

Question 11

If the production of capital goods is shown along the horizontal axis of a production possibilities curve, and the production of consumer goods is shown along the vertical axis of a production possibilities curve, and the economy desires to have a rapid rate of economic growth, then the economy should produce at a point

Accepted Answer

A) near the middle of the curve dividing resources equally between the production of consumer and capital goods. 
B) at a point near the vertical axis concentrating on the production of consumer goods. 
C) at a point near the horizontal axis concentrating on the production of capital goods. 
D) at a point inside the curve allowing the economy to adjust rapidly to changes in economic activity. 
A) near the middle of the curve dividing resources equally between the production of consumer and capital goods. 
B) at a point near the vertical axis concentrating on the production of consumer goods. 
C) at a point near the horizontal axis concentrating on the production of capital goods. 
D) at a point inside the curve allowing the economy to adjust rapidly to changes in economic activity.

Question 12

If opportunity costs are constant, then

Accepted Answer

A) the production possibilities curve does not exist. 
B) the production possibilities curve bows outward. 
C) the production possibilities curve is a negatively sloped straight line. 
D) factors of production must not be fully employed. 
A) the production possibilities curve does not exist. 
B) the production possibilities curve bows outward. 
C) the production possibilities curve is a negatively sloped straight line. 
D) factors of production must not be fully employed.

Question 13

-Refer to the above figure. Which of the following statements is true?

Accepted Answer

A) Point a is efficient, Point b is efficient, point c is inefficient. 
B) Point a is unobtainable, point b is efficient and point c is inefficient. 
C) Point a is inefficient, point b is efficient and point c is unobtainable. 
D) All of the points are efficient. 
A) Point a is efficient, Point b is efficient, point c is inefficient. 
B) Point a is unobtainable, point b is efficient and point c is inefficient. 
C) Point a is inefficient, point b is efficient and point c is unobtainable. 
D) All of the points are efficient.

Question 14

The production possibilities curve (PPC)illustrates economic growth by a(n)

Accepted Answer

A) bowed-out shape of the PPC. 
B) outward shift of the PPC. 
C) inward shift of the PPC. 
D) movement along the PPC. 
A) bowed-out shape of the PPC. 
B) outward shift of the PPC. 
C) inward shift of the PPC. 
D) movement along the PPC.

Question 15

Assuming Vice President Smith has to sacrifice more than his assistant in order to engage in full-time typing, we would say that his assistant has a(n)________ advantage in typing versus Mr. Smith.

Accepted Answer

A) absolute 
B) comparative 
C) pecuniary 
D) overwhelming 
A) absolute 
B) comparative 
C) pecuniary 
D) overwhelming

Question 16

Briefly explain the concept of opportunity cost. What is the opportunity cost of attending college?

Accepted Answer

The opportunity cost of an action is the

Question 17

Explain briefly what will likely happen to society if it chooses to produce more capital goods and fewer consumption goods.

Accepted Answer

Because capital goods enable society to

Question 18

One opportunity cost associated with going to college is

Accepted Answer

A) purchasing text books. 
B) paying tuition. 
C) giving up employment possibilities while in college. 
D) paying for room, board, and other living expenses. 
A) purchasing text books. 
B) paying tuition. 
C) giving up employment possibilities while in college. 
D) paying for room, board, and other living expenses.

Question 19

-In the above figure, the opportunity cost of moving from point A to point C is

Accepted Answer

A) 50 guitars. 
B) 0 guitars. 
C) 25 guitars. 
D) 50 ukuleles. 
A) 50 guitars. 
B) 0 guitars. 
C) 25 guitars. 
D) 50 ukuleles.

Question 20

Capital goods

Accepted Answer

A) are a special type of consumption goods. 
B) are consumed because they enhance the enjoyment consumers obtain from other goods and services. 
C) are goods used to make consumer goods and services. 
D) lead to inward shifts of a production possibilities curve. 
A) are a special type of consumption goods. 
B) are consumed because they enhance the enjoyment consumers obtain from other goods and services. 
C) are goods used to make consumer goods and services. 
D) lead to inward shifts of a production possibilities curve.

From the economist's point of view,

Briefly explain why people make choices.

When a country specializes and trades with other countries, it is most likely that it specializes in goods for which

A production possibilities curve will shift outward or to the right for all of the following reasons EXCEPT

A man-made resource such as a building or a machine is an example of which resource?

Suppose an acre of land yields 100 bushels of corn and that one bushel of corn provides enough seed for one-quarter of an acre of land. The opportunity cost of consuming another 100 bushels of corn today is

Explain the concept of the law of increasing additional cost.

Distinguish between scarcity and shortages.

If Irene can make either four chairs or one table in an hour and Greg can make either three chairs or two tables in an hour then

-Look at the following production possibilities table for smartphones and tablets. The table shows the maximum combination of smartphones and tablets of corn that can be produced, when all resources are fully employed. Production Possibilities Good A B C D E Based on the above information,

If opportunity costs are constant, then

-Refer to the above figure. Which of the following statements is true?

The production possibilities curve (PPC)illustrates economic growth by a(n)

Assuming Vice President Smith has to sacrifice more than his assistant in order to engage in full-time typing, we would say that his assistant has a(n)________ advantage in typing versus Mr. Smith.

Briefly explain the concept of opportunity cost. What is the opportunity cost of attending college?

Explain briefly what will likely happen to society if it chooses to produce more capital goods and fewer consumption goods.

One opportunity cost associated with going to college is

-In the above figure, the opportunity cost of moving from point A to point C is

Capital goods

The Nature of Economics

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters

Exam 2: Scarcity and the World of Trade-Offs

From the economist's point of view,

Briefly explain why people make choices.

When a country specializes and trades with other countries, it is most likely that it specializes in goods for which

A production possibilities curve will shift outward or to the right for all of the following reasons EXCEPT

A man-made resource such as a building or a machine is an example of which resource?

Suppose an acre of land yields 100 bushels of corn and that one bushel of corn provides enough seed for one-quarter of an acre of land. The opportunity cost of consuming another 100 bushels of corn today is

Explain the concept of the law of increasing additional cost.

Distinguish between scarcity and shortages.

If Irene can make either four chairs or one table in an hour and Greg can make either three chairs or two tables in an hour then

-Look at the following production possibilities table for smartphones and tablets. The table shows the maximum combination of smartphones and tablets of corn that can be produced, when all resources are fully employed. Production Possibilities Good A B C D E Based on the above information,

If opportunity costs are constant, then

-Refer to the above figure. Which of the following statements is true?

The production possibilities curve (PPC)illustrates economic growth by a(n)

Assuming Vice President Smith has to sacrifice more than his assistant in order to engage in full-time typing, we would say that his assistant has a(n)________ advantage in typing versus Mr. Smith.

Briefly explain the concept of opportunity cost. What is the opportunity cost of attending college?

Explain briefly what will likely happen to society if it chooses to produce more capital goods and fewer consumption goods.

One opportunity cost associated with going to college is

-In the above figure, the opportunity cost of moving from point A to point C is

Capital goods

The Nature of Economics

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters