Question 1

Figure 3-1
  
-According to Figure 3-1, the opportunity cost of one more bushel of wheat is

Accepted Answer

A)  higher at B than at D. 
B)  lower at B than at D. 
C)  equal at B and D. 
D)  impossible to determine from the information given. 
A)  higher at B than at D. 
B)  lower at B than at D. 
C)  equal at B and D. 
D)  impossible to determine from the information given.

Question 2

Economics studies the logic of choices made from among available possibilities.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is considered by economists to be the most fundamentally scarce?

Accepted Answer

A)  money 
B)  ideas 
C)  needs 
D)  food 
E)  physical resources 
A)  money 
B)  ideas 
C)  needs 
D)  food 
E)  physical resources

Question 4

An optimal decision is one that chooses

Accepted Answer

A)  the most desirable alternative among the possibilities permitted by the resources available. 
B)  the lowest cost method of meeting goals, without regard to quality or any other feature. 
C)  among various possible goals and offends no one, so that all are equally happy. 
D)  among equally important goals, and thereby avoids the "indispensable necessity" syndrome. 
E)  among possible goals in such a way that spends as little money as possible. 
A)  the most desirable alternative among the possibilities permitted by the resources available. 
B)  the lowest cost method of meeting goals, without regard to quality or any other feature. 
C)  among various possible goals and offends no one, so that all are equally happy. 
D)  among equally important goals, and thereby avoids the "indispensable necessity" syndrome. 
E)  among possible goals in such a way that spends as little money as possible.

Question 5

Voluntary exchange

Accepted Answer

A)  is usually beneficial to one party, but not the other. 
B)  is always beneficial to both parties. 
C)  is occasionally beneficial to both parties. 
D)  occurs only between nations, not between individuals. 
A)  is usually beneficial to one party, but not the other. 
B)  is always beneficial to both parties. 
C)  is occasionally beneficial to both parties. 
D)  occurs only between nations, not between individuals.

Question 6

The political party that is in power determines the position and shape of the production possibilities frontier that constrains the choices of the economy.

Accepted Answer

A) True 
 B)False

Question 7

All of the points inside a production possibilities frontier are ____; all of the points outside the production possibilities frontier are ____.

Accepted Answer

A)  efficient, inefficient 
B)  optimal, irrational 
C)  attainable, unattainable 
D)  rational, zero-cost 
E)  unattainable, efficient 
A)  efficient, inefficient 
B)  optimal, irrational 
C)  attainable, unattainable 
D)  rational, zero-cost 
E)  unattainable, efficient

Question 8

Which principle states that as the production of one good expands, the opportunity cost of producing another unit of this good generally increases?

Accepted Answer

A)  Principle of total cost 
B)  Principle of increasing cost 
C)  Principle of opportunity cost 
D)  Principle of increasing marginal utility 
A)  Principle of total cost 
B)  Principle of increasing cost 
C)  Principle of opportunity cost 
D)  Principle of increasing marginal utility

Question 9

The concept of "an invisible hand" led Adam Smith to believe that

Accepted Answer

A)  if each person looks out for himself or herself, then chaos will inevitably ensue. 
B)  pursuit of self-interest promotes economic well-being for society as a whole. 
C)  governmental rule actually results in greater good than is apparent at the time. 
D)  traditional religion is an appropriate guide for human behavior. 
E)  All of the above are correct. 
A)  if each person looks out for himself or herself, then chaos will inevitably ensue. 
B)  pursuit of self-interest promotes economic well-being for society as a whole. 
C)  governmental rule actually results in greater good than is apparent at the time. 
D)  traditional religion is an appropriate guide for human behavior. 
E)  All of the above are correct.

Question 10

A ticket to an Eric Clapton concert costs $45.If you have a ticket, you can "scalp" it (sell it illegally) for $75.To a ticket holder, the opportunity cost of actually attending the concert is

Accepted Answer

A)  $45. 
B)  $50. 
C)  $75. 
D)  $115. 
A)  $45. 
B)  $50. 
C)  $75. 
D)  $115.

Exam 3: The Fundamental Economic Problem: Scarcity and Choice

Figure 3-1 -According to Figure 3-1, the opportunity cost of one more bushel of wheat is

Economics studies the logic of choices made from among available possibilities.

Which of the following is considered by economists to be the most fundamentally scarce?

An optimal decision is one that chooses

Voluntary exchange

The political party that is in power determines the position and shape of the production possibilities frontier that constrains the choices of the economy.

All of the points inside a production possibilities frontier are ____; all of the points outside the production possibilities frontier are ____.

Which principle states that as the production of one good expands, the opportunity cost of producing another unit of this good generally increases?

The concept of "an invisible hand" led Adam Smith to believe that

A ticket to an Eric Clapton concert costs $45.If you have a ticket, you can "scalp" it (sell it illegally) for $75.To a ticket holder, the opportunity cost of actually attending the concert is

What Is Economics?

The Economy: Myth and Reality

Supply and Demand: An Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: The Importance of Marginal Analysis

Securities: Business Finance, and the Economy: The Tail that Wags the Dog?

The Firm and the Industry under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets I: The Price System

The Shortcomings of Free Markets

The Market's Prime Achievement: Innovation and Growth

Externalities, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: The Human Inputs

Poverty, Inequality, and Discrimination

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

Filters

All of the points inside a production possibilities frontier are ; all of the points outside the production possibilities frontier are .