Question 1

What happens to overall living standards when countries trade with other countries?

Accepted Answer

When countries specialize in producing g

Question 2

Both an NBA basketball player and a fast-food cook are going to graduate school. Who has a higher opportunity cost? Explain.

Accepted Answer

The opportunity cost is the income lost

Question 3

Opportunity cost exists because

Accepted Answer

A) of scarcity. 
B) prices must adjust to eliminate shortages. 
C) production could not occur without the opportunity cost of using resources. 
D) the value of economic goods is positive while the value of goods is zero. 
A) of scarcity. 
B) prices must adjust to eliminate shortages. 
C) production could not occur without the opportunity cost of using resources. 
D) the value of economic goods is positive while the value of goods is zero.

Question 4

Production is efficient when

Accepted Answer

A) it generates a point beyond the production possibility curve. 
B) the maximum output possible is being produced given current levels of resources and technology. 
C) technological change occurs. 
D) the maximum amounts of the most important good are produced. 
A) it generates a point beyond the production possibility curve. 
B) the maximum output possible is being produced given current levels of resources and technology. 
C) technological change occurs. 
D) the maximum amounts of the most important good are produced.

Question 5

Scarcity exists because

Accepted Answer

A) there is a disruption in the distribution of goods caused by bad weather. 
B) there is a shortage of goods caused by war. 
C) there are not enough resources available to produce all the goods that people want. 
D) there is a shortage of qualified workers throughout the world. 
A) there is a disruption in the distribution of goods caused by bad weather. 
B) there is a shortage of goods caused by war. 
C) there are not enough resources available to produce all the goods that people want. 
D) there is a shortage of qualified workers throughout the world.

Question 6

A production possibilities curve with quantities of clothing and food on the axes shows which of the following? I. A society cannot have an unlimited amount of each good.
II. For an efficient society, an increase in clothing production will necessitate a decrease in food production.
III. A society will always produce the maximum amount of both clothing and food.

Accepted Answer

A) I only 
B) II only 
C) III only 
D) Both I and II 
A) I only 
B) II only 
C) III only 
D) Both I and II

Question 7

Other things being equal, you can make $20,000 a year teaching, $25,000 a year typing, $30,000 a year driving a cab, and $40,000 a year as a chef. You have a comparative advantage in

Accepted Answer

A) teaching. 
B) driving a cab. 
C) being a chef. 
D) one of them but we need more information to know which. 
A) teaching. 
B) driving a cab. 
C) being a chef. 
D) one of them but we need more information to know which.

Question 8

An improvement in technology will shift the production possibilities curve

Accepted Answer

A) to the left. 
B) along the curve. 
C) inward. 
D) to the right. 
A) to the left. 
B) along the curve. 
C) inward. 
D) to the right.

Question 9

Which of the following is held constant when constructing a production possibilities curve?

Accepted Answer

A) the price level 
B) the income level 
C) combination of goods produced 
D) the amount of total resources used 
A) the price level 
B) the income level 
C) combination of goods produced 
D) the amount of total resources used

Question 10

Comparative advantage implies choosing the activity that

Accepted Answer

A) has a high opportunity cost. 
B) is inside the production possibilities frontier. 
C) has the lowest opportunity cost. 
D) does not demand any specialization. 
A) has a high opportunity cost. 
B) is inside the production possibilities frontier. 
C) has the lowest opportunity cost. 
D) does not demand any specialization.

Question 11

Generally, if a nation produces more consumer goods than capital goods

Accepted Answer

A) more of all goods may be produced in the future. 
B) less of all goods may be produced in the future. 
C) about the same amount of capital goods may be produced in the future as are being produced today. 
D) society will have to forego future consumption of capital goods . 
A) more of all goods may be produced in the future. 
B) less of all goods may be produced in the future. 
C) about the same amount of capital goods may be produced in the future as are being produced today. 
D) society will have to forego future consumption of capital goods .

Question 12

The opportunity cost of attending college might best be described as

Accepted Answer

A) the money that must be paid in order to attend college. 
B) the lowest-valued alternative use of the student's time. 
C) the highest-valued alternative use of the student's time. 
D) the value that the student attaches to not working. 
A) the money that must be paid in order to attend college. 
B) the lowest-valued alternative use of the student's time. 
C) the highest-valued alternative use of the student's time. 
D) the value that the student attaches to not working.

Question 13

The division of labor refers to

Accepted Answer

A) the separation of blue-collared workers and white-collared workers. 
B) finding the best order of performing tasks. 
C) the separation of workers into union workers and non-union workers. 
D) the assignment of different workers to different tasks. 
A) the separation of blue-collared workers and white-collared workers. 
B) finding the best order of performing tasks. 
C) the separation of workers into union workers and non-union workers. 
D) the assignment of different workers to different tasks.

Question 14

Briefly explain the difference between the concepts of scarcity and shortage.

Accepted Answer

Scarcity is not a shortage. Scarcity occ

Question 15

Fred and Ann both decide to see the same movie when they are given free movie tickets. We know that

Accepted Answer

A) both bear an opportunity cost since they could have done other things instead of see the movie. 
B) both bear the same opportunity cost since they are doing the same thing. 
C) the cost of going to the movie is greater for the one who had more choices to do other things. 
D) neither bears an opportunity cost because the tickets were free. 
A) both bear an opportunity cost since they could have done other things instead of see the movie. 
B) both bear the same opportunity cost since they are doing the same thing. 
C) the cost of going to the movie is greater for the one who had more choices to do other things. 
D) neither bears an opportunity cost because the tickets were free.

Question 16

When an economy is operating efficiently, which is true?

Accepted Answer

A) All resources are fully employed. 
B) It would be possible to increase the output of 1 good without decreasing the output of the other. 
C) Resources are not fully employed or current technology is not being fully utilized. 
D) This economy is operating to the right of its production possibilities curve (PP
C) . 
A) All resources are fully employed. 
B) It would be possible to increase the output of 1 good without decreasing the output of the other. 
C) Resources are not fully employed or current technology is not being fully utilized. 
D) This economy is operating to the right of its production possibilities curve (PP
C) .

Question 17

Extremely cold winter weather has destroyed oranges in Florida. The freeze has caused

Accepted Answer

A) scarcity because there are less oranges now than people want. 
B) scarcity because people have to switch to other types of citrus fruits. 
C) a shortage because people cannot obtain as many oranges as they wish to buy at the pre-freeze price. 
D) a shortage because the orange growers will have less income. 
A) scarcity because there are less oranges now than people want. 
B) scarcity because people have to switch to other types of citrus fruits. 
C) a shortage because people cannot obtain as many oranges as they wish to buy at the pre-freeze price. 
D) a shortage because the orange growers will have less income.

Question 18

Suppose you have four choices-go to a movie, read a book, watch television, or go to a concert. You choose to go to a movie. The opportunity cost of the movie is

Accepted Answer

A) the value of the book not read. 
B) the value of the television program not watched. 
C) the value of the concert that you didn't attend. 
D) the value of the activity that you would have selected if you hadn't gone to the movie. 
A) the value of the book not read. 
B) the value of the television program not watched. 
C) the value of the concert that you didn't attend. 
D) the value of the activity that you would have selected if you hadn't gone to the movie.

Question 19

The idea of comparative advantage is related to

Accepted Answer

A) the idea of opportunity cost. 
B) the idea of absolute advantage. 
C) using the worker with the most diverse sets of skills. 
D) engineering efficiency. 
A) the idea of opportunity cost. 
B) the idea of absolute advantage. 
C) using the worker with the most diverse sets of skills. 
D) engineering efficiency.

Question 20

The trade-off between current consumption and the production of capital goods is also a trade-off between

Accepted Answer

A) the future cost for capital goods and future cost of consumption goods. 
B) having fewer needs and more wants in the future. 
C) satisfying the needs of the poor and the wants of the wealthy. 
D) current consumption and future consumption. 
A) the future cost for capital goods and future cost of consumption goods. 
B) having fewer needs and more wants in the future. 
C) satisfying the needs of the poor and the wants of the wealthy. 
D) current consumption and future consumption.

What happens to overall living standards when countries trade with other countries?

Both an NBA basketball player and a fast-food cook are going to graduate school. Who has a higher opportunity cost? Explain.

Opportunity cost exists because

Production is efficient when

Scarcity exists because

Other things being equal, you can make $20,000 a year teaching, $25,000 a year typing, $30,000 a year driving a cab, and $40,000 a year as a chef. You have a comparative advantage in

An improvement in technology will shift the production possibilities curve

Which of the following is held constant when constructing a production possibilities curve?

Comparative advantage implies choosing the activity that

Generally, if a nation produces more consumer goods than capital goods

The opportunity cost of attending college might best be described as

The division of labor refers to

Briefly explain the difference between the concepts of scarcity and shortage.

Fred and Ann both decide to see the same movie when they are given free movie tickets. We know that

When an economy is operating efficiently, which is true?

Extremely cold winter weather has destroyed oranges in Florida. The freeze has caused

Suppose you have four choices-go to a movie, read a book, watch television, or go to a concert. You choose to go to a movie. The opportunity cost of the movie is

The idea of comparative advantage is related to

The trade-off between current consumption and the production of capital goods is also a trade-off between

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

What happens to overall living standards when countries trade with other countries?

Both an NBA basketball player and a fast-food cook are going to graduate school. Who has a higher opportunity cost? Explain.

Opportunity cost exists because

Production is efficient when

Scarcity exists because

Other things being equal, you can make $20,000 a year teaching, $25,000 a year typing, $30,000 a year driving a cab, and $40,000 a year as a chef. You have a comparative advantage in

An improvement in technology will shift the production possibilities curve

Which of the following is held constant when constructing a production possibilities curve?

Comparative advantage implies choosing the activity that

Generally, if a nation produces more consumer goods than capital goods

The opportunity cost of attending college might best be described as

The division of labor refers to

Briefly explain the difference between the concepts of scarcity and shortage.

Fred and Ann both decide to see the same movie when they are given free movie tickets. We know that

When an economy is operating efficiently, which is true?

Extremely cold winter weather has destroyed oranges in Florida. The freeze has caused

Suppose you have four choices-go to a movie, read a book, watch television, or go to a concert. You choose to go to a movie. The opportunity cost of the movie is

The idea of comparative advantage is related to

The trade-off between current consumption and the production of capital goods is also a trade-off between

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