Question 1

The production possibilities curve bows outward because

Accepted Answer

A) opportunity costs are decreasing as the production of a good increases. 
B) opportunity costs are increasing as the production of a good increases. 
C) opportunity costs are fixed as the production of a good increases. 
D) resources are of uniform quality. 
A) opportunity costs are decreasing as the production of a good increases. 
B) opportunity costs are increasing as the production of a good increases. 
C) opportunity costs are fixed as the production of a good increases. 
D) resources are of uniform quality.

Question 2

How is economic growth shown by the production possibilities curve?

Accepted Answer

A) By shifting the curve to the right. 
B) By moving the curve to the left. 
C) By moving up the existing curve. 
D) By changing the shape of the curve from a straight line to one that is bowed. 
A) By shifting the curve to the right. 
B) By moving the curve to the left. 
C) By moving up the existing curve. 
D) By changing the shape of the curve from a straight line to one that is bowed.

Question 3

-A farmer has 100 acres of land on which he can grow soybeans or corn. An acre of land yields 200 bushels of soybeans or 100 bushels of corn. The above figure refers to the farmer's

Accepted Answer

A) production possibilities curve. 
B) substitution options curve. 
C) demand curve. 
D) opportunity cost curve. 
A) production possibilities curve. 
B) substitution options curve. 
C) demand curve. 
D) opportunity cost curve.

Question 4

Are all goods economic goods? Are all economic goods also goods? Explain.

Accepted Answer

Not all goods are economic goods. Econom

Question 5

Which of the following is NOT a factor of production?

Accepted Answer

A) land 
B) labor 
C) a product 
D) entrepreneurship 
A) land 
B) labor 
C) a product 
D) entrepreneurship

Question 6

In the production of goods and services, trade-offs exist because

Accepted Answer

A) not all production is efficient. 
B) society has only a limited amount of productive resources. 
C) buyers and sellers often must negotiate prices. 
D) human wants and needs are limited at a particular point in time. 
A) not all production is efficient. 
B) society has only a limited amount of productive resources. 
C) buyers and sellers often must negotiate prices. 
D) human wants and needs are limited at a particular point in time.

Question 7

Which of the following is NOT an economic good?

Accepted Answer

A) a haircut 
B) broccoli 
C) a sunset 
D) education 
A) a haircut 
B) broccoli 
C) a sunset 
D) education

Question 8

All mutually beneficial trades have taken place. This implies that

Accepted Answer

A) the production possibilities curve is bowed out. 
B) society is inside the production possibilities curve. 
C) economic efficiency prevails in the society. 
D) society is on the constant cost portion of its production possibilities curve. 
A) the production possibilities curve is bowed out. 
B) society is inside the production possibilities curve. 
C) economic efficiency prevails in the society. 
D) society is on the constant cost portion of its production possibilities curve.

Question 9

The production possibilities curve represents the maximum feasible production combinations resulting from

Accepted Answer

A) the mix of current resources that utilizes all available inputs using current technology. 
B) a fixed amount of demand by consumers. 
C) the lack of trade-offs in production. 
D) the lack of technology used in production. 
A) the mix of current resources that utilizes all available inputs using current technology. 
B) a fixed amount of demand by consumers. 
C) the lack of trade-offs in production. 
D) the lack of technology used in production.

Question 10

The more society consumes today,

Accepted Answer

A) the more it consumes next year. 
B) the harder it will be to consume less in the future because people will find it hard to adjust to less. 
C) the less society can consume in the future. 
D) the easier it will be to consume less in the future. 
A) the more it consumes next year. 
B) the harder it will be to consume less in the future because people will find it hard to adjust to less. 
C) the less society can consume in the future. 
D) the easier it will be to consume less in the future.

Question 11

All of the following are economic resources, or factors of production EXCEPT

Accepted Answer

A) land. 
B) physical capital. 
C) money. 
D) entrepreneurship. 
A) land. 
B) physical capital. 
C) money. 
D) entrepreneurship.

Question 12

Which of the following is the best example of scarcity?

Accepted Answer

A) The Talking Teddy is a surprise holiday hit, resulting in long lines of consumers trying to purchase the limited number of available Teddies. 
B) Fred only gets a 10-hour lunch break and each day must decide between working out at the gym or socializing with his colleagues. 
C) The local market's buy-one-get-one-free sale on strawberries results in more people wanting the berries than producers are able and willing to supply. 
D) There is a bumper crop of strawberries, and stores have more berries than they can sell. 
A) The Talking Teddy is a surprise holiday hit, resulting in long lines of consumers trying to purchase the limited number of available Teddies. 
B) Fred only gets a 10-hour lunch break and each day must decide between working out at the gym or socializing with his colleagues. 
C) The local market's buy-one-get-one-free sale on strawberries results in more people wanting the berries than producers are able and willing to supply. 
D) There is a bumper crop of strawberries, and stores have more berries than they can sell.

Question 13

The reason the production possibilities curve is bowed outward (concave)is

Accepted Answer

A) the law of increasing additional cost. 
B) that technology is constantly changing. 
C) that the number of resources is increasing. 
D) that the economy has more capital goods than entrepreneurial effort. 
A) the law of increasing additional cost. 
B) that technology is constantly changing. 
C) that the number of resources is increasing. 
D) that the economy has more capital goods than entrepreneurial effort.

Question 14

The fact that our wants are unlimited but our resources are limited implies that

Accepted Answer

A) we should limit our wants. 
B) entrepreneurship has failed as an economic system. 
C) we have to make choices. 
D) the only way to make someone better off is to make someone else worse off. 
A) we should limit our wants. 
B) entrepreneurship has failed as an economic system. 
C) we have to make choices. 
D) the only way to make someone better off is to make someone else worse off.

Question 15

The concept of opportunity cost exists because

Accepted Answer

A) of scarcity. 
B) goods have different prices. 
C) of shortages. 
D) the value of services is hard to determine. 
A) of scarcity. 
B) goods have different prices. 
C) of shortages. 
D) the value of services is hard to determine.

Question 16

Which of the following items would be considered scarce?

Accepted Answer

A) water 
B) diamonds 
C) potato chips 
D) All of the above are scarce. 
A) water 
B) diamonds 
C) potato chips 
D) All of the above are scarce.

Question 17

Economic goods are

Accepted Answer

A) abundant goods, about which we must constantly make decisions about their best use. 
B) all imaginable items from which individuals derive satisfaction or happiness. 
C) goods that are scarce, for which the quantity demanded exceeds the quantity supplied at a zero price. 
D) goods that are scarce, for which the quantity demanded exceeds the quantity supplied at any price. 
A) abundant goods, about which we must constantly make decisions about their best use. 
B) all imaginable items from which individuals derive satisfaction or happiness. 
C) goods that are scarce, for which the quantity demanded exceeds the quantity supplied at a zero price. 
D) goods that are scarce, for which the quantity demanded exceeds the quantity supplied at any price.

Question 18

Human resources that perform the functions of organizing, managing, and assembling the other factors of production are called

Accepted Answer

A) physical capital. 
B) venture capital. 
C) entrepreneurs. 
D) productive capital. 
A) physical capital. 
B) venture capital. 
C) entrepreneurs. 
D) productive capital.

Question 19

Scarcity is

Accepted Answer

A) a situation of shortage after a hurricane. 
B) a permanent human condition relative to the nearly limitless nature of human desires. 
C) represented by long lines at stores. 
D) the same thing as poverty. 
A) a situation of shortage after a hurricane. 
B) a permanent human condition relative to the nearly limitless nature of human desires. 
C) represented by long lines at stores. 
D) the same thing as poverty.

Question 20

An efficient point of production is

Accepted Answer

A) a point on the production possibilities curve. 
B) a point inside the production possibilities curve. 
C) the point where scarcity no longer exists. 
D) the point where we are currently producing. 
A) a point on the production possibilities curve. 
B) a point inside the production possibilities curve. 
C) the point where scarcity no longer exists. 
D) the point where we are currently producing.

Exam 2: Scarcity and the World of Trade-Offs

The production possibilities curve bows outward because

How is economic growth shown by the production possibilities curve?

-A farmer has 100 acres of land on which he can grow soybeans or corn. An acre of land yields 200 bushels of soybeans or 100 bushels of corn. The above figure refers to the farmer's

Are all goods economic goods? Are all economic goods also goods? Explain.

Which of the following is NOT a factor of production?

In the production of goods and services, trade-offs exist because

Which of the following is NOT an economic good?

All mutually beneficial trades have taken place. This implies that

The production possibilities curve represents the maximum feasible production combinations resulting from

The more society consumes today,

All of the following are economic resources, or factors of production EXCEPT

Which of the following is the best example of scarcity?

The reason the production possibilities curve is bowed outward (concave)is

The fact that our wants are unlimited but our resources are limited implies that

The concept of opportunity cost exists because

Which of the following items would be considered scarce?

Economic goods are

Human resources that perform the functions of organizing, managing, and assembling the other factors of production are called

Scarcity is

An efficient point of production is

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