Question 1

An example of an entrepreneur would be

Accepted Answer

A) the owner of a new Indian food restaurant. 
B) the cafeteria employee who won the employee of the month award. 
C) a Greyhound bus driver. 
D) the cashier at your local supermarket. 
A) the owner of a new Indian food restaurant. 
B) the cafeteria employee who won the employee of the month award. 
C) a Greyhound bus driver. 
D) the cashier at your local supermarket.

Question 2

-In the above figure, what is the opportunity cost of one bushel of soybeans?

Accepted Answer

A) 1 bushel of corn 
B) 0.5 bushels of corn 
C) 2 bushels of corn 
D) unable to determine 
A) 1 bushel of corn 
B) 0.5 bushels of corn 
C) 2 bushels of corn 
D) unable to determine

Question 3

The above table shows the daily production possibilities for a bakery.
Currently the bakery bakes 60 pizzas and 180 loaves of bread, that is-it is at alternative C.
-Using the above table, what is the opportunity cost of moving from alternative C to alternative B?

Accepted Answer

A) 1/2 a pizza pie 
B) 60 pizza pies 
C) 90 pizza pies 
D) 30 pizza pies 
A) 1/2 a pizza pie 
B) 60 pizza pies 
C) 90 pizza pies 
D) 30 pizza pies

Question 4

Scarcity implies that people must

Accepted Answer

A) be miserable. 
B) be selfish. 
C) make choices. 
D) not be selfish. 
A) be miserable. 
B) be selfish. 
C) make choices. 
D) not be selfish.

Question 5

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

Accepted Answer

A) Panel A does not represent an economy that is producing efficiently while Panel B does. 
B) Panel A represents an economy that has a lower level of technology than Panel B. 
C) Opportunity costs do not apply to Panel A but apply to Panel B. 
D) In Panel A, equal amounts of Y must be given up to obtain equal increments of X while in Panel B increasingly greater amounts of Y must be given up to obtain equal increments of X. 
A) Panel A does not represent an economy that is producing efficiently while Panel B does. 
B) Panel A represents an economy that has a lower level of technology than Panel B. 
C) Opportunity costs do not apply to Panel A but apply to Panel B. 
D) In Panel A, equal amounts of Y must be given up to obtain equal increments of X while in Panel B increasingly greater amounts of Y must be given up to obtain equal increments of X.

Question 6

A straight-line production possibilities curve has

Accepted Answer

A) an increasing opportunity cost between the two goods. 
B) a decreasing opportunity cost between the two goods. 
C) a constant opportunity cost between the two goods. 
D) no opportunity cost between the two goods. 
A) an increasing opportunity cost between the two goods. 
B) a decreasing opportunity cost between the two goods. 
C) a constant opportunity cost between the two goods. 
D) no opportunity cost between the two goods.

Question 7

Education increases the stock of which factor of production?

Accepted Answer

A) physical capital 
B) human capital 
C) land 
D) entrepreneurship 
A) physical capital 
B) human capital 
C) land 
D) entrepreneurship

Question 8

-Refer to the above figure. A farmer has 50 acres of land on which to grow wheat or beans. An acre of land yields 400 bushels of beans or 800 bushels of wheat. Which of the following is a possible combination of beans and wheat that can be grown, assuming the land is farmed efficiently?

Accepted Answer

A) 30,000 bushels of each 
B) 15,000 bushels of beans and 10,000 bushels of wheat 
C) 25,000 bushels of beans and 25,000 bushels of wheat 
D) 20,000 bushels of beans and 40,000 bushels of wheat 
A) 30,000 bushels of each 
B) 15,000 bushels of beans and 10,000 bushels of wheat 
C) 25,000 bushels of beans and 25,000 bushels of wheat 
D) 20,000 bushels of beans and 40,000 bushels of wheat

Question 9

How can the concepts of opportunity costs, scarcity and choice by illustrated by the production possibilities curve?

Accepted Answer

The concept of opportunity cost is illus

Question 10

A point outside a production possibilities curve indicates

Accepted Answer

A) that resources are not being used efficiently. 
B) that resources are being used very efficiently. 
C) opportunity costs are constant. 
D) an output combination that is unobtainable with the current resource and technology levels. 
A) that resources are not being used efficiently. 
B) that resources are being used very efficiently. 
C) opportunity costs are constant. 
D) an output combination that is unobtainable with the current resource and technology levels.

Question 11

The production possibilities curve can shift inward when

Accepted Answer

A) production increases. 
B) employment increases. 
C) the stock of productive capital rises. 
D) a country experiences a natural disaster. 
A) production increases. 
B) employment increases. 
C) the stock of productive capital rises. 
D) a country experiences a natural disaster.

Question 12

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

Accepted Answer

A) 20 guitars. 
B) 50 ukuleles. 
C) 55 guitars. 
D) 25 ukuleles. 
A) 20 guitars. 
B) 50 ukuleles. 
C) 55 guitars. 
D) 25 ukuleles.

Question 13

-In the above figure, the opportunity cost of moving from producing 75 guitars and 25 ukuleles to producing 50 guitars and 50 ukuleles is

Accepted Answer

A) 25 ukuleles. 
B) 50 guitars. 
C) 100 guitars. 
D) 25 guitars. 
A) 25 ukuleles. 
B) 50 guitars. 
C) 100 guitars. 
D) 25 guitars.

Question 14

Suppose the current unemployment rate is 15 percent. If it rises to 20 percent,

Accepted Answer

A) the economy will move up along the production possibilities curve. 
B) the economy will move closer to the production possibilities curve. 
C) the production possibilities curve will shift inward. 
D) the economy will operate farther inside the production possibilities curve. 
A) the economy will move up along the production possibilities curve. 
B) the economy will move closer to the production possibilities curve. 
C) the production possibilities curve will shift inward. 
D) the economy will operate farther inside the production possibilities curve.

Question 15

A waitress brings a free glass of wine when you sit down in a restaurant. This glass of wine is

Accepted Answer

A) a service because the waitress carried it instead of making it. 
B) a good, but not an economic good because there is no price charged for the wine. 
C) a nongood because there is no price charged for the wine. 
D) an economic good because wine is produced with scarce resources, even if it is free to you. 
A) a service because the waitress carried it instead of making it. 
B) a good, but not an economic good because there is no price charged for the wine. 
C) a nongood because there is no price charged for the wine. 
D) an economic good because wine is produced with scarce resources, even if it is free to you.

Question 16

Briefly explain how specialization and trade can benefit nations.

Accepted Answer

When nations specialize in what they hav

Question 17

Economic growth can be pictured in a production possibilities curve diagram by

Accepted Answer

A) shifting the production possibilities curve in. 
B) shifting the production possibilities curve out. 
C) making the production possibilities curve straighter. 
D) moving from a point inside the production possibilities curve to a point on the curve. 
A) shifting the production possibilities curve in. 
B) shifting the production possibilities curve out. 
C) making the production possibilities curve straighter. 
D) moving from a point inside the production possibilities curve to a point on the curve.

Question 18

If the production possibilities curve is a downward sloping straight line, then

Accepted Answer

A) resources are highly specialized, making it difficult to use them for alternative uses. 
B) technological change has increased. 
C) production is efficient only when producing at the mid-point. 
D) all resources must be perfectly adaptable for alternative uses. 
A) resources are highly specialized, making it difficult to use them for alternative uses. 
B) technological change has increased. 
C) production is efficient only when producing at the mid-point. 
D) all resources must be perfectly adaptable for alternative uses.

Question 19

Scarcity exists because

Accepted Answer

A) the majority of people in the world are poor. 
B) people are too greedy and refuse to share what they have with others. 
C) human wants exceed what can be produced with the limited resources available. 
D) not enough new technology is being used to eliminate scarcity. 
A) the majority of people in the world are poor. 
B) people are too greedy and refuse to share what they have with others. 
C) human wants exceed what can be produced with the limited resources available. 
D) not enough new technology is being used to eliminate scarcity.

Question 20

By going to school an individual will obtain which resource?

Accepted Answer

A) Money 
B) Physical capital 
C) Knowledge 
D) Human capital 
A) Money 
B) Physical capital 
C) Knowledge 
D) Human capital

Exam 2: Scarcity and the World of Trade-Offs

An example of an entrepreneur would be

-In the above figure, what is the opportunity cost of one bushel of soybeans?

The above table shows the daily production possibilities for a bakery. Currently the bakery bakes 60 pizzas and 180 loaves of bread, that is-it is at alternative C. -Using the above table, what is the opportunity cost of moving from alternative C to alternative B?

Scarcity implies that people must

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

A straight-line production possibilities curve has

Education increases the stock of which factor of production?

-Refer to the above figure. A farmer has 50 acres of land on which to grow wheat or beans. An acre of land yields 400 bushels of beans or 800 bushels of wheat. Which of the following is a possible combination of beans and wheat that can be grown, assuming the land is farmed efficiently?

How can the concepts of opportunity costs, scarcity and choice by illustrated by the production possibilities curve?

A point outside a production possibilities curve indicates

The production possibilities curve can shift inward when

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

-In the above figure, the opportunity cost of moving from producing 75 guitars and 25 ukuleles to producing 50 guitars and 50 ukuleles is

Suppose the current unemployment rate is 15 percent. If it rises to 20 percent,

A waitress brings a free glass of wine when you sit down in a restaurant. This glass of wine is

Briefly explain how specialization and trade can benefit nations.

Economic growth can be pictured in a production possibilities curve diagram by

If the production possibilities curve is a downward sloping straight line, then

Scarcity exists because

By going to school an individual will obtain which resource?

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