Question 1

Given the production possibilities schedule in the above table, a combination of 9 televisions and 4 personal computers

Accepted Answer

A) is attainable but involves an inefficient use of society's resources. 
B) would be attainable only if a new technology of producing televisions or computers were introduced. 
C) is not attainable because it is not listed in the schedule. 
D) is not attainable because society does not have enough resources to produce this combination. 
A) is attainable but involves an inefficient use of society's resources. 
B) would be attainable only if a new technology of producing televisions or computers were introduced. 
C) is not attainable because it is not listed in the schedule. 
D) is not attainable because society does not have enough resources to produce this combination.

Question 2

A bowed outward production possibilities curve occurs when

Accepted Answer

A) opportunity costs are constant. 
B) resources are not scarce. 
C) additional units of output of one good necessitate greater reductions in the other good. 
D) there are shortages in the goods being produced. 
A) opportunity costs are constant. 
B) resources are not scarce. 
C) additional units of output of one good necessitate greater reductions in the other good. 
D) there are shortages in the goods being produced.

Question 3

-Refer to the above figure. Which of the following points indicates an inefficient use of resources?

Accepted Answer

A) a 
B) d 
C) e 
D) More information is needed to answer the question. 
A) a 
B) d 
C) e 
D) More information is needed to answer the question.

Question 4

At a point on a production possibilities curve, opportunity cost of more capital goods today is

Accepted Answer

A) fewer capital goods in the future. 
B) fewer consumer goods in the future. 
C) fewer consumer goods today. 
D) more unemployed resources in the future. 
A) fewer capital goods in the future. 
B) fewer consumer goods in the future. 
C) fewer consumer goods today. 
D) more unemployed resources in the future.

Question 5

Which of the following is an assumption used in deriving a production possibilities curve?

Accepted Answer

A) Poverty always exists in society. 
B) The wages in an industry increase constantly. 
C) Prices will continue to increase. 
D) The amount of resources is fixed. 
A) Poverty always exists in society. 
B) The wages in an industry increase constantly. 
C) Prices will continue to increase. 
D) The amount of resources is fixed.

Question 6

Why is a point below the production possibilities curve less efficient than a point on that curve?

Accepted Answer

A point on the production possibilities

Question 7

A production point that lies outside the Production Possibilities Curve (PPC)

Accepted Answer

A) denotes inefficiency. 
B) indicates unemployment. 
C) is currently not attainable. 
D) can never be reached, even in future periods. 
A) denotes inefficiency. 
B) indicates unemployment. 
C) is currently not attainable. 
D) can never be reached, even in future periods.

Question 8

Economic growth is shown by

Accepted Answer

A) a point near the top of the production possibilities curve. 
B) a point outside the production possibilities curve. 
C) an inward shift of the production possibilities curve. 
D) an outward shift of the production possibilities curve. 
A) a point near the top of the production possibilities curve. 
B) a point outside the production possibilities curve. 
C) an inward shift of the production possibilities curve. 
D) an outward shift of the production possibilities curve.

Question 9

When an economy sacrifices production of consumption goods to produce more capital goods, we would expect that the production possibilities curve will

Accepted Answer

A) shift outward. 
B) shift inward. 
C) become a straight line. 
D) shift about in random fashion. 
A) shift outward. 
B) shift inward. 
C) become a straight line. 
D) shift about in random fashion.

Question 10

Activities designed to convert resources into goods and services is known as

Accepted Answer

A) supply. 
B) consumption. 
C) production. 
D) scarcity. 
A) supply. 
B) consumption. 
C) production. 
D) scarcity.

Question 11

Which of the following statements is NOT an assumption underlying the production possibilities curve?

Accepted Answer

A) Resources are fully and efficiently employed. 
B) Technology is fixed. 
C) Production occurs over some specified time period. 
D) The amount of resources available for production can be changed quickly. 
A) Resources are fully and efficiently employed. 
B) Technology is fixed. 
C) Production occurs over some specified time period. 
D) The amount of resources available for production can be changed quickly.

Question 12

-In the above figure, the production of 75 ukuleles and 75 guitars is

Accepted Answer

A) efficient production. 
B) inefficient production. 
C) impossible production. 
D) full employment production. 
A) efficient production. 
B) inefficient production. 
C) impossible production. 
D) full employment production.

Question 13

Which of the following activities are production?

Accepted Answer

A) Combining flour, milk, and eggs to make cookies. 
B) Moving coal from southern Illinois to an electrical power plant in northern Illinois. 
C) Taking ice cubes from a tray to put in a drink. 
D) All of the above are production. 
A) Combining flour, milk, and eggs to make cookies. 
B) Moving coal from southern Illinois to an electrical power plant in northern Illinois. 
C) Taking ice cubes from a tray to put in a drink. 
D) All of the above are production.

Question 14

-Refer to the above figure. Production at Point F

Accepted Answer

A) is not attainable given the underlying assumptions of the production possibilities curve (PP
C) . 
B) would not be desirable. 
C) can only be attained by giving up Point E. 
D) can be attained only if a society desired more goods and services. 
A) is not attainable given the underlying assumptions of the production possibilities curve (PP
C) . 
B) would not be desirable. 
C) can only be attained by giving up Point E. 
D) can be attained only if a society desired more goods and services.

Question 15

Opportunity cost

Accepted Answer

A) can only be measured as a paid cost. 
B) is always the value of the next best forgone opportunity. 
C) does not exist since there are no receipts. 
D) is always the lowest valued alternative. 
A) can only be measured as a paid cost. 
B) is always the value of the next best forgone opportunity. 
C) does not exist since there are no receipts. 
D) is always the lowest valued alternative.

Question 16

Why do most people choose to specialize in a narrow set of skills for their work, rather than to learn a little bit about several varied fields of endeavor?

Accepted Answer

A) They feel that doing so will minimize their chances of being unemployed. 
B) They don't correctly perceive the costs of being so specialized. 
C) It allows them to earn more income by being more productive. 
D) They are unaware of how much better off they would be if they diversified their skills. 
A) They feel that doing so will minimize their chances of being unemployed. 
B) They don't correctly perceive the costs of being so specialized. 
C) It allows them to earn more income by being more productive. 
D) They are unaware of how much better off they would be if they diversified their skills.

Question 17

A student has a job that pays a wage rate of $10 per hour. The night before an economics exam, the student has set aside four hours to study for the exam, estimating that for each hour spent studying, her grade will rise by 5 points. That night, she gets a call from her employer to come to work for a wage rate of $15 per hour for that night. She decides to work for three hours and earn an extra $45.00. The next day she takes the test and gets a grade of 75. The opportunity cost for her work is

Accepted Answer

A) the $45.00 she earned. 
B) the 15 extra points she estimates that she could have earned on the exam if she had studied the extra three hours. 
C) the three hours she did not study. 
D) the entire four hours she set aside for studying. 
A) the $45.00 she earned. 
B) the 15 extra points she estimates that she could have earned on the exam if she had studied the extra three hours. 
C) the three hours she did not study. 
D) the entire four hours she set aside for studying.

Question 18

The tasks performed by the chef at your favorite restaurant could be categorized as

Accepted Answer

A) a good. 
B) an economic good. 
C) a service or intangible good. 
D) All of the above are correct. 
A) a good. 
B) an economic good. 
C) a service or intangible good. 
D) All of the above are correct.

Question 19

Scarcity implies that

Accepted Answer

A) people should limit their wants, since shortages exist. 
B) firms should be more efficient when producing goods. 
C) people must make choices. 
D) nonrenewable resources should never be used. 
A) people should limit their wants, since shortages exist. 
B) firms should be more efficient when producing goods. 
C) people must make choices. 
D) nonrenewable resources should never be used.

Question 20

Which of the following is TRUE about comparative advantage?

Accepted Answer

A) Comparative advantage explains trade among nations, but not within nations. 
B) Comparative advantage explains trade within nations, but not among nations. 
C) Comparative advantage explains trade within nations and among nations. 
D) Comparative advantage has nothing to do with trade among nations; it only is concerned with specialization within a firm. 
A) Comparative advantage explains trade among nations, but not within nations. 
B) Comparative advantage explains trade within nations, but not among nations. 
C) Comparative advantage explains trade within nations and among nations. 
D) Comparative advantage has nothing to do with trade among nations; it only is concerned with specialization within a firm.

Given the production possibilities schedule in the above table, a combination of 9 televisions and 4 personal computers

A bowed outward production possibilities curve occurs when

-Refer to the above figure. Which of the following points indicates an inefficient use of resources?

At a point on a production possibilities curve, opportunity cost of more capital goods today is

Which of the following is an assumption used in deriving a production possibilities curve?

Why is a point below the production possibilities curve less efficient than a point on that curve?

A production point that lies outside the Production Possibilities Curve (PPC)

Economic growth is shown by

When an economy sacrifices production of consumption goods to produce more capital goods, we would expect that the production possibilities curve will

Activities designed to convert resources into goods and services is known as

Which of the following statements is NOT an assumption underlying the production possibilities curve?

-In the above figure, the production of 75 ukuleles and 75 guitars is

Which of the following activities are production?

-Refer to the above figure. Production at Point F

Opportunity cost

Why do most people choose to specialize in a narrow set of skills for their work, rather than to learn a little bit about several varied fields of endeavor?

The tasks performed by the chef at your favorite restaurant could be categorized as

Scarcity implies that

Which of the following is TRUE about comparative advantage?

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

Given the production possibilities schedule in the above table, a combination of 9 televisions and 4 personal computers

A bowed outward production possibilities curve occurs when

-Refer to the above figure. Which of the following points indicates an inefficient use of resources?

At a point on a production possibilities curve, opportunity cost of more capital goods today is

Which of the following is an assumption used in deriving a production possibilities curve?

Why is a point below the production possibilities curve less efficient than a point on that curve?

A production point that lies outside the Production Possibilities Curve (PPC)

Economic growth is shown by

When an economy sacrifices production of consumption goods to produce more capital goods, we would expect that the production possibilities curve will

Activities designed to convert resources into goods and services is known as

Which of the following statements is NOT an assumption underlying the production possibilities curve?

-In the above figure, the production of 75 ukuleles and 75 guitars is

Which of the following activities are production?

-Refer to the above figure. Production at Point F

Opportunity cost

Why do most people choose to specialize in a narrow set of skills for their work, rather than to learn a little bit about several varied fields of endeavor?

The tasks performed by the chef at your favorite restaurant could be categorized as

Scarcity implies that

Which of the following is TRUE about comparative advantage?

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