Question 1

An outward bowed production possibilities curve illustrates

Accepted Answer

A) inefficient production. 
B) the law of increasing additional cost. 
C) a lack of scarcity. 
D) zero opportunity cost of moving from inefficient production to currently unobtainable production. 
A) inefficient production. 
B) the law of increasing additional cost. 
C) a lack of scarcity. 
D) zero opportunity cost of moving from inefficient production to currently unobtainable production.

Question 2

Explain: "The law of increasing additional cost is an inevitable phenomenon in economics."

Accepted Answer

Economic resources are seldom suitable f

Question 3

The division of labor refers to

Accepted Answer

A) workers being assigned specific tasks. 
B) workers performing multiple tasks. 
C) separating men and women in the workforce. 
D) creating jobs that all people can perform at the same level. 
A) workers being assigned specific tasks. 
B) workers performing multiple tasks. 
C) separating men and women in the workforce. 
D) creating jobs that all people can perform at the same level.

Question 4

Suppose that Canadian farmers can grow wheat more cheaply than can U.S. farmers. In the interest of efficiency, what is the desirable outcome?

Accepted Answer

A) Allow the Canadian farmers to sell their wheat for a lower price. 
B) Pass a law in Canada mandating a minimum price for wheat equal to what is charged by U.S. farmers. 
C) Pass a law in the United States mandating a maximum price for wheat equal to what is charged by Canadian farmers. 
D) Have U.S. citizens boycott Canadian wheat. 
A) Allow the Canadian farmers to sell their wheat for a lower price. 
B) Pass a law in Canada mandating a minimum price for wheat equal to what is charged by U.S. farmers. 
C) Pass a law in the United States mandating a maximum price for wheat equal to what is charged by Canadian farmers. 
D) Have U.S. citizens boycott Canadian wheat.

Question 5

Scarcity is caused by

Accepted Answer

A) unlimited wants running up against limited economic resources. 
B) lazy workers. 
C) mechanical breakdowns at factories. 
D) shortages. 
A) unlimited wants running up against limited economic resources. 
B) lazy workers. 
C) mechanical breakdowns at factories. 
D) shortages.

Question 6

When a country or a region of a country specializes in producing the product that has the lower opportunity cost compared to another country or region, it is practicing

Accepted Answer

A) absolute advantage. 
B) cost disadvantage. 
C) regional advantage. 
D) comparative advantage. 
A) absolute advantage. 
B) cost disadvantage. 
C) regional advantage. 
D) comparative advantage.

Question 7

Which of the following will most likely happen when better technology is used in production?

Accepted Answer

A) an upward movement along the production possibilities curve 
B) an outward shift of the production possibilities curve 
C) an inward shift of the production possibilities curve 
D) a downward movement along the production possibilities curve 
A) an upward movement along the production possibilities curve 
B) an outward shift of the production possibilities curve 
C) an inward shift of the production possibilities curve 
D) a downward movement along the production possibilities curve

Question 8

In the above figure, the farmer faces a trade-off between beans and wheat equal to

Accepted Answer

A) one-to-one. 
B) three-to-one. 
C) one-to-two. 
D) one-to-four. 
A) one-to-one. 
B) three-to-one. 
C) one-to-two. 
D) one-to-four.

Question 9

If a country's production possibilities curve gets more bowed out over time, it is an indication that

Accepted Answer

A) technological change has taken place. 
B) society is learning to use its resources more efficiently. 
C) the quantity of labor and capital have increased. 
D) resources have become more highly specialized. 
A) technological change has taken place. 
B) society is learning to use its resources more efficiently. 
C) the quantity of labor and capital have increased. 
D) resources have become more highly specialized.

Question 10

-Which of the following statements about a movement along the production possibilities curve in the above figure is FALSE?

Accepted Answer

A) An additional computer can be produced only if fewer televisions are produced. 
B) The trade-off between computers and televisions is not constant. 
C) Society cannot have more of both goods at the same time. 
D) There are no opportunity costs involved in choosing one point on the curve over all other points. 
A) An additional computer can be produced only if fewer televisions are produced. 
B) The trade-off between computers and televisions is not constant. 
C) Society cannot have more of both goods at the same time. 
D) There are no opportunity costs involved in choosing one point on the curve over all other points.

Question 11

Which factor of production includes water?

Accepted Answer

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

Question 12

A tractor used to prepare land for planting is called

Accepted Answer

A) land. 
B) labor. 
C) physical capital. 
D) human capital. 
A) land. 
B) labor. 
C) physical capital. 
D) human capital.

Question 13

When two countries specialize in the production of different goods and trade with each other, it is most likely each country will

Accepted Answer

A) export the goods in which it has a comparative advantage. 
B) export the goods in which it has an absolute advantage. 
C) import the goods in which it has a comparative advantage. 
D) import the goods in which it has an absolute advantage. 
A) export the goods in which it has a comparative advantage. 
B) export the goods in which it has an absolute advantage. 
C) import the goods in which it has a comparative advantage. 
D) import the goods in which it has an absolute advantage.

Question 14

The production possibilities curve for two products is bowed out because

Accepted Answer

A) as the production of a good increases, opportunity cost increases. 
B) as the production of a good increases, opportunity cost is unchanged. 
C) the qualities of the resources are not identical. 
D) there are unemployed resources. 
A) as the production of a good increases, opportunity cost increases. 
B) as the production of a good increases, opportunity cost is unchanged. 
C) the qualities of the resources are not identical. 
D) there are unemployed resources.

Question 15

For a country that produces two goods: Environmental clean-up goods and space program goods. What economic information is contained in its production possibility curve?

Accepted Answer

@#IMG-DLM& The above figure illustrates the produc

Question 16

A point inside a production possibilities curve indicates

Accepted Answer

A) resources are not being used efficiently. 
B) 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) resources are not being used efficiently. 
B) 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 17

In economics, international trade is based on the existence of

Accepted Answer

A) absolute advantage between countries. 
B) relative advantage between countries. 
C) comparative advantage between countries. 
D) output advantage between countries. 
A) absolute advantage between countries. 
B) relative advantage between countries. 
C) comparative advantage between countries. 
D) output advantage between countries.

Question 18

Generally, specialization leads to

Accepted Answer

A) constant opportunity costs. 
B) greater productivity. 
C) the production of fewer capital goods. 
D) greater self-reliance. 
A) constant opportunity costs. 
B) greater productivity. 
C) the production of fewer capital goods. 
D) greater self-reliance.

Question 19

The reason that most of the coffee that is consumed in the United States comes from Colombia is that

Accepted Answer

A) Colombia has an absolute advantage in producing coffee relative to the United States. 
B) Colombia has a comparative advantage in producing coffee relative to the United States. 
C) coffee cannot be grown in the United States. 
D) government trade disincentives regarding Colombian coffee make such trade possible. 
A) Colombia has an absolute advantage in producing coffee relative to the United States. 
B) Colombia has a comparative advantage in producing coffee relative to the United States. 
C) coffee cannot be grown in the United States. 
D) government trade disincentives regarding Colombian coffee make such trade possible.

Question 20

Refer to the above figure. If the farmer has 50 acres of land, the farmer is producing at point a, and an acre of land yields 400 bushels of beans or 800 bushels of wheat, how much land is devoted to the production of wheat?

Accepted Answer

A) 8.5 acres 
B) 10 acres 
C) 12.5 acres 
D) 15 acres 
A) 8.5 acres 
B) 10 acres 
C) 12.5 acres 
D) 15 acres

Exam 2: Scarcity and the World of Trade-Offs

An outward bowed production possibilities curve illustrates

Explain: "The law of increasing additional cost is an inevitable phenomenon in economics."

The division of labor refers to

Suppose that Canadian farmers can grow wheat more cheaply than can U.S. farmers. In the interest of efficiency, what is the desirable outcome?

Scarcity is caused by

When a country or a region of a country specializes in producing the product that has the lower opportunity cost compared to another country or region, it is practicing

Which of the following will most likely happen when better technology is used in production?

In the above figure, the farmer faces a trade-off between beans and wheat equal to

If a country's production possibilities curve gets more bowed out over time, it is an indication that

-Which of the following statements about a movement along the production possibilities curve in the above figure is FALSE?

Which factor of production includes water?

A tractor used to prepare land for planting is called

When two countries specialize in the production of different goods and trade with each other, it is most likely each country will

The production possibilities curve for two products is bowed out because

For a country that produces two goods: Environmental clean-up goods and space program goods. What economic information is contained in its production possibility curve?

A point inside a production possibilities curve indicates

In economics, international trade is based on the existence of

Generally, specialization leads to

The reason that most of the coffee that is consumed in the United States comes from Colombia is that

Refer to the above figure. If the farmer has 50 acres of land, the farmer is producing at point a, and an acre of land yields 400 bushels of beans or 800 bushels of wheat, how much land is devoted to the production of wheat?

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

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