Question 1

Britain imports some goods and exports other goods primarily because of:

Accepted Answer

A) free goods. 
B) specialization. 
C) unemployment. 
D) self-sufficiency. 
A) free goods. 
B) specialization. 
C) unemployment. 
D) self-sufficiency.

Question 2

Use the following to answer questions 
Exhibit: Production Possibilities Curve  
-(Exhibit: Production Possibilities Curve 1)
Efficiency is achieved at point _____ with respect to Curve _____.

Accepted Answer

A) G; y 
B) I; z 
C) H; x 
D) F; x 
A) G; y 
B) I; z 
C) H; x 
D) F; x

Question 3

There are several advantages that a market economy possesses.These do not include the fact that market economies:

Accepted Answer

A) tend to result in high living standards. 
B) tend to encourage greater economic growth. 
C) tend to prevent entrepreneurial activity that would result in large accumulations of wealth in the hands of a few people. 
D) none of the above is true 
A) tend to result in high living standards. 
B) tend to encourage greater economic growth. 
C) tend to prevent entrepreneurial activity that would result in large accumulations of wealth in the hands of a few people. 
D) none of the above is true

Question 4

If the production possibilities curve were a straight line sloping down from left to right, this would suggest that:

Accepted Answer

A) more of both goods could be produced moving along the curve. 
B) the two products must have the same price. 
C) no factor of production has any particular comparative advantage over other resources. 
D) the utility of the two goods must be equal to consumers. 
A) more of both goods could be produced moving along the curve. 
B) the two products must have the same price. 
C) no factor of production has any particular comparative advantage over other resources. 
D) the utility of the two goods must be equal to consumers.

Question 5

One of the two criteria for a resource to be considered capital is that it must:

Accepted Answer

A) occur naturally. 
B) be part of a factory or building. 
C) be a skill or talent possessed by a person. 
D) be possible to use it to produce other goods and services. 
A) occur naturally. 
B) be part of a factory or building. 
C) be a skill or talent possessed by a person. 
D) be possible to use it to produce other goods and services.

Question 6

Use the following to answer questions 
Exhibit: Sugar and Freight Trains  
-(Exhibit: Sugar and Freight Trains)
Suppose the economy is operating at point A, producing 244 tons of sugar and 1 freight train.The opportunity cost of producing the second freight train is:

Accepted Answer

A) 225 tons of sugar. 
B) 25 tons of sugar. 
C) 19 tons of sugar. 
D) 6 tons of sugar. 
A) 225 tons of sugar. 
B) 25 tons of sugar. 
C) 19 tons of sugar. 
D) 6 tons of sugar.

Question 7

Resources from nature that can be used to produce other goods and services are called:

Accepted Answer

A) money. 
B) natural resources. 
C) labor. 
D) capital. 
A) money. 
B) natural resources. 
C) labor. 
D) capital.

Question 8

When moving along a production possibilities curve, the opportunity cost to society of getting more of the good on the horizontal axis:

Accepted Answer

A) is constant. 
B) is measured in dollar terms. 
C) is measured by the amount of the other good that must be given up. 
D) usually decreases. 
A) is constant. 
B) is measured in dollar terms. 
C) is measured by the amount of the other good that must be given up. 
D) usually decreases.

Question 9

The law of increasing opportunity cost means that:

Accepted Answer

A) higher wages, rents, and interest will increase opportunity costs. 
B) opportunity cost will decrease the more you decide to produce more of one good along a production possibilities curve. 
C) opportunity cost increases when you produce more of one good while moving along a production possibilities curve. 
D) costs of production decrease at first, but then eventually rise. 
A) higher wages, rents, and interest will increase opportunity costs. 
B) opportunity cost will decrease the more you decide to produce more of one good along a production possibilities curve. 
C) opportunity cost increases when you produce more of one good while moving along a production possibilities curve. 
D) costs of production decrease at first, but then eventually rise.

Question 10

Who may benefit from technological progress?

Accepted Answer

A) consumers 
B) workers 
C) firms. 
D) all of the above. 
A) consumers 
B) workers 
C) firms. 
D) all of the above.

Question 11

Society's production possibilities curve is primarily concerned with answering the economic question of what goods and services a society can produce.

Accepted Answer

A) True 
 B)False

Question 12

In the Case in Point on economic growth prospects for the United States, economist Robert Gordon expects for the near future:

Accepted Answer

A) A period of robust growth. 
B) A period of secular stagnation. 
C) A period of no growth. 
D) A period of no technological innovation. 
A) A period of robust growth. 
B) A period of secular stagnation. 
C) A period of no growth. 
D) A period of no technological innovation.

Question 13

International trade is possible in part through:

Accepted Answer

A) inefficiently employing resources. 
B) restricting the rate of growth of output. 
C) generalization in the production of all goods. 
D) specialization in the production of goods. 
A) inefficiently employing resources. 
B) restricting the rate of growth of output. 
C) generalization in the production of all goods. 
D) specialization in the production of goods.

Question 14

If wages are higher in the United States than in Brazil, then:

Accepted Answer

A) trade is still beneficial to the United States and Brazil. 
B) Brazil will not have a comparative advantage in the production of any good. 
C) the United States cannot have a comparative advantage in the production of any good. 
D) trade with Brazil will clearly lower wages in the United States. 
A) trade is still beneficial to the United States and Brazil. 
B) Brazil will not have a comparative advantage in the production of any good. 
C) the United States cannot have a comparative advantage in the production of any good. 
D) trade with Brazil will clearly lower wages in the United States.

Question 15

Efficient production implies that it is:

Accepted Answer

A) possible to produce more of all goods and services. 
B) it is possible to produce more of one good without producing less of another. 
C) not possible to produce more of one good without producing less of another good. 
D) producing at a combination of goods which lies between the production possibilities curve and the origin. 
A) possible to produce more of all goods and services. 
B) it is possible to produce more of one good without producing less of another. 
C) not possible to produce more of one good without producing less of another good. 
D) producing at a combination of goods which lies between the production possibilities curve and the origin.

Question 16

If the opportunity cost of manufacturing machinery is higher in the United States than in Britain and the opportunity cost of manufacturing sweaters is lower in the United States than in Britain, then the United States will:

Accepted Answer

A) export both sweaters and machinery to Britain. 
B) import both sweaters and machinery from Britain. 
C) export sweaters to Britain and import machinery from Britain. 
D) import sweaters from Britain and export machinery to Britain. 
A) export both sweaters and machinery to Britain. 
B) import both sweaters and machinery from Britain. 
C) export sweaters to Britain and import machinery from Britain. 
D) import sweaters from Britain and export machinery to Britain.

Question 17

Use the following to answer questions 
Exhibit: Strawberries and Submarines  
-(Exhibit: Strawberries and Submarines)
Suppose the economy is now operating at point C.Achieving production at point F would require:

Accepted Answer

A) that the economy achieve full employment and an efficient allocation of resources. 
B) that the economy reduce its production of strawberries. 
C) that the economy reduce its production of submarines. 
D) that the economy improve its technology or increase the quantities of factors of production it has. 
A) that the economy achieve full employment and an efficient allocation of resources. 
B) that the economy reduce its production of strawberries. 
C) that the economy reduce its production of submarines. 
D) that the economy improve its technology or increase the quantities of factors of production it has.

Question 18

Society can operate on the production possibilities curve only if it has achieved efficiency.

Accepted Answer

A) True 
 B)False

Question 19

Use the following to answer questions 
Exhibit: Production Possibilities Schedule 1  
-(Exhibit: Production Possibilities Schedule 1)
The opportunity cost of producing the fourth unit of consumer goods is ___ __ units of capital goods.

Accepted Answer

A) 2 
B) 4 
C) 6 
D) 8 
A) 2 
B) 4 
C) 6 
D) 8

Question 20

The production possibilities curve represents the fact that:

Accepted Answer

A) the economy will automatically end up at full employment. 
B) an economy's productive capacity increases proportionally with its population. 
C) if all resources of an economy are being used efficiently, more of one good can be produced only if less of another good is produced. 
D) economic production possibilities have no limit. 
A) the economy will automatically end up at full employment. 
B) an economy's productive capacity increases proportionally with its population. 
C) if all resources of an economy are being used efficiently, more of one good can be produced only if less of another good is produced. 
D) economic production possibilities have no limit.

Britain imports some goods and exports other goods primarily because of:

Use the following to answer questions Exhibit: Production Possibilities Curve -(Exhibit: Production Possibilities Curve 1) Efficiency is achieved at point _ with respect to Curve _.

There are several advantages that a market economy possesses.These do not include the fact that market economies:

If the production possibilities curve were a straight line sloping down from left to right, this would suggest that:

One of the two criteria for a resource to be considered capital is that it must:

Use the following to answer questions Exhibit: Sugar and Freight Trains -(Exhibit: Sugar and Freight Trains) Suppose the economy is operating at point A, producing 244 tons of sugar and 1 freight train.The opportunity cost of producing the second freight train is:

Resources from nature that can be used to produce other goods and services are called:

When moving along a production possibilities curve, the opportunity cost to society of getting more of the good on the horizontal axis:

The law of increasing opportunity cost means that:

Who may benefit from technological progress?

Society's production possibilities curve is primarily concerned with answering the economic question of what goods and services a society can produce.

In the Case in Point on economic growth prospects for the United States, economist Robert Gordon expects for the near future:

International trade is possible in part through:

If wages are higher in the United States than in Brazil, then:

Efficient production implies that it is:

If the opportunity cost of manufacturing machinery is higher in the United States than in Britain and the opportunity cost of manufacturing sweaters is lower in the United States than in Britain, then the United States will:

Use the following to answer questions Exhibit: Strawberries and Submarines -(Exhibit: Strawberries and Submarines) Suppose the economy is now operating at point C.Achieving production at point F would require:

Society can operate on the production possibilities curve only if it has achieved efficiency.

Use the following to answer questions Exhibit: Production Possibilities Schedule 1 -(Exhibit: Production Possibilities Schedule 1) The opportunity cost of producing the fourth unit of consumer goods is _ units of capital goods.

The production possibilities curve represents the fact that:

Economics: the Study of Choice

Demand and Supply

Applications of Supply and Demand

Macroeconomics: the Big Picture

Measuring Total Output and Income

Aggregate Demand and Aggregate Supply

Economic Growth

The Nature and Creation of Money

Financial Markets and the Economy

Monetary Policy and the Fed

Government and Fiscal Policy

Consumption and the Aggregate Expenditures Model

Investment and Economic Activity

Net Exports and International Finance

Inflation and Unemployment

A Brief History of Macroeconomic Thought and Policy

Inequality, Poverty, and Discrimination

Filters

Exam 2: Confronting Scarcity: Choices in Production

Britain imports some goods and exports other goods primarily because of:

Use the following to answer questions Exhibit: Production Possibilities Curve -(Exhibit: Production Possibilities Curve 1) Efficiency is achieved at point _____ with respect to Curve _____.

There are several advantages that a market economy possesses.These do not include the fact that market economies:

If the production possibilities curve were a straight line sloping down from left to right, this would suggest that:

One of the two criteria for a resource to be considered capital is that it must:

Use the following to answer questions Exhibit: Sugar and Freight Trains -(Exhibit: Sugar and Freight Trains) Suppose the economy is operating at point A, producing 244 tons of sugar and 1 freight train.The opportunity cost of producing the second freight train is:

Resources from nature that can be used to produce other goods and services are called:

When moving along a production possibilities curve, the opportunity cost to society of getting more of the good on the horizontal axis:

The law of increasing opportunity cost means that:

Who may benefit from technological progress?

Society's production possibilities curve is primarily concerned with answering the economic question of what goods and services a society can produce.

In the Case in Point on economic growth prospects for the United States, economist Robert Gordon expects for the near future:

International trade is possible in part through:

If wages are higher in the United States than in Brazil, then:

Efficient production implies that it is:

If the opportunity cost of manufacturing machinery is higher in the United States than in Britain and the opportunity cost of manufacturing sweaters is lower in the United States than in Britain, then the United States will:

Use the following to answer questions Exhibit: Strawberries and Submarines -(Exhibit: Strawberries and Submarines) Suppose the economy is now operating at point C.Achieving production at point F would require:

Society can operate on the production possibilities curve only if it has achieved efficiency.

Use the following to answer questions Exhibit: Production Possibilities Schedule 1 -(Exhibit: Production Possibilities Schedule 1) The opportunity cost of producing the fourth unit of consumer goods is ___ __ units of capital goods.

The production possibilities curve represents the fact that:

Economics: the Study of Choice

Demand and Supply

Applications of Supply and Demand

Macroeconomics: the Big Picture

Measuring Total Output and Income

Aggregate Demand and Aggregate Supply

Economic Growth

The Nature and Creation of Money

Financial Markets and the Economy

Monetary Policy and the Fed

Government and Fiscal Policy

Consumption and the Aggregate Expenditures Model

Investment and Economic Activity

Net Exports and International Finance

Inflation and Unemployment

A Brief History of Macroeconomic Thought and Policy

Inequality, Poverty, and Discrimination

Filters

Use the following to answer questions Exhibit: Production Possibilities Curve -(Exhibit: Production Possibilities Curve 1) Efficiency is achieved at point _ with respect to Curve _.

Use the following to answer questions Exhibit: Production Possibilities Schedule 1 -(Exhibit: Production Possibilities Schedule 1) The opportunity cost of producing the fourth unit of consumer goods is _ units of capital goods.