Question 1

A method of allocating scarce resources is a necessary component of

Accepted Answer

A) all economic systems 
B) all economic systems except market capitalism 
C) centrally-planned socialism and market socialism only 
D) centrally-planned capitalism and market capitalism only 
E) all economic systems except centrally planned socialism 
A) all economic systems 
B) all economic systems except market capitalism 
C) centrally-planned socialism and market socialism only 
D) centrally-planned capitalism and market capitalism only 
E) all economic systems except centrally planned socialism A

Question 2

According to the law of increasing opportunity cost,

Accepted Answer

A) opportunity cost rises as technology improves 
B) the production possibilities frontier is a straight line 
C) opportunity cost rises as society produces more of a good or service 
D) the production possibilities frontier is convex with respect to the origin (that is bowed toward the origin) 
E) monetary costs rise as opportunity cost rises 
A) opportunity cost rises as technology improves 
B) the production possibilities frontier is a straight line 
C) opportunity cost rises as society produces more of a good or service 
D) the production possibilities frontier is convex with respect to the origin (that is bowed toward the origin) 
E) monetary costs rise as opportunity cost rises C

Question 3

Which of the following could lead to an inward shift of the production possibilities frontier?

Accepted Answer

A) an increase in the cost of one good 
B) an increase in the utilization of resources 
C) a rise in the level of technology 
D) a law is passed whereby a mandatory retirement age of 60 is imposed 
E) a decrease in the utilization of resources 
A) an increase in the cost of one good 
B) an increase in the utilization of resources 
C) a rise in the level of technology 
D) a law is passed whereby a mandatory retirement age of 60 is imposed 
E) a decrease in the utilization of resources D

Question 4

Figure 2-2
  
-Assume that U.S.agricultural land is used either to raise cattle for beef or to grow wheat.Figure 2-2 represents the production possibility frontier for beef and wheat.The opportunity cost of moving from point G to point F equals

Accepted Answer

A) 0.25 million bushels of wheat 
B) 1.75 million bushels of wheat 
C) 0.125 bushels of wheat 
D) 8 bushels of wheat 
E) 2 bushels of wheat 
A) 0.25 million bushels of wheat 
B) 1.75 million bushels of wheat 
C) 0.125 bushels of wheat 
D) 8 bushels of wheat 
E) 2 bushels of wheat

Question 5

Jenni can change a car's oil in 10 minutes and clean a bathroom in 20 minutes.Rob can change a car's oil in 20 minutes and clean a bathroom in 10 minutes.Therefore,

Accepted Answer

A) Jenni should clean the bathroom and Rob should change the car's oil 
B) Rob should clean the bathroom and Jenni should change the car's oil 
C) there are no gains from specialization 
D) Rob has an absolute advantage in both activities 
E) Jenni has an absolute advantage in cleaning the bathroom 
A) Jenni should clean the bathroom and Rob should change the car's oil 
B) Rob should clean the bathroom and Jenni should change the car's oil 
C) there are no gains from specialization 
D) Rob has an absolute advantage in both activities 
E) Jenni has an absolute advantage in cleaning the bathroom

Question 6

Tax collections in the United States are an example of

Accepted Answer

A) tradition in a mainly market system 
B) command in a mainly tradition system 
C) market in a mainly tradition system 
D) tradition in a mainly command system 
E) command in a mainly market system 
A) tradition in a mainly market system 
B) command in a mainly tradition system 
C) market in a mainly tradition system 
D) tradition in a mainly command system 
E) command in a mainly market system

Question 7

-Figure 2-5 shows five different combinations of rockets and cruise ships that a country could manufacture.The production possibilities frontier that is illustrated in Figure 2-5 exhibits

Accepted Answer

A) decreasing opportunity cost 
B) increasing opportunity cost 
C) constant opportunity cost 
D) zero opportunity cost 
E) heightened opportunity cost 
A) decreasing opportunity cost 
B) increasing opportunity cost 
C) constant opportunity cost 
D) zero opportunity cost 
E) heightened opportunity cost

Question 8

Specialization of labor typically leads to higher levels of productive inefficiency in an economy.

Accepted Answer

A) True 
 B)False

Question 9

Sven has a comparative advantage over Alice in cooking but not in doing the laundry.Which of the following must be true?

Accepted Answer

A) Sven must have an absolute advantage in both cooking and doing the laundry. 
B) Sven has a lower opportunity cost in doing the laundry. 
C) Sven has an absolute advantage in doing the laundry. 
D) Alice must have an absolute advantage in cooking. 
E) Sven must have a lower opportunity cost than Alice for cooking. 
A) Sven must have an absolute advantage in both cooking and doing the laundry. 
B) Sven has a lower opportunity cost in doing the laundry. 
C) Sven has an absolute advantage in doing the laundry. 
D) Alice must have an absolute advantage in cooking. 
E) Sven must have a lower opportunity cost than Alice for cooking.

Question 10

Under market capitalism,resources are allocated by

Accepted Answer

A) command and owned privately 
B) the market and owned privately 
C) command and owned by the state 
D) the market and owned by the state 
E) tradition and owned by all 
A) command and owned privately 
B) the market and owned privately 
C) command and owned by the state 
D) the market and owned by the state 
E) tradition and owned by all

Question 11

Under a socialist system,

Accepted Answer

A) most resources are owned by the state 
B) most resources are shared with the whole community 
C) market prices determine how resources are distributed 
D) conflicts are usually resolved by consensus 
E) most resources are privately owned 
A) most resources are owned by the state 
B) most resources are shared with the whole community 
C) market prices determine how resources are distributed 
D) conflicts are usually resolved by consensus 
E) most resources are privately owned

Question 12

The U.S.system of resource ownership

Accepted Answer

A) is pure capitalism 
B) excludes any state ownership of resources 
C) includes government restrictions on the use of privately owned resources 
D) is designed to eliminate the problem of scarce resources 
E) excludes any communal ownership 
A) is pure capitalism 
B) excludes any state ownership of resources 
C) includes government restrictions on the use of privately owned resources 
D) is designed to eliminate the problem of scarce resources 
E) excludes any communal ownership

Question 13

The concave shape of the production possibilities frontier reflects

Accepted Answer

A) the law of comparative advantage 
B) the law of absolute advantage 
C) the law of increasing opportunity cost 
D) the simplifying assumption of scarce resources 
E) productive inefficiency 
A) the law of comparative advantage 
B) the law of absolute advantage 
C) the law of increasing opportunity cost 
D) the simplifying assumption of scarce resources 
E) productive inefficiency

Question 14

Bill can cook dinner in 45 minutes and mow the lawn in 1.5 hours.Eileen can cook dinner in 1.5 hours and mow the lawn in 2 hours.Which of the following statements is correct?

Accepted Answer

A) Bill should specialize in both tasks. 
B) Bill should specialize in cooking dinner;Eileen should specialize in mowing the lawn. 
C) Bill should specialize in mowing the lawn;Eileen should specialize in cooking dinner. 
D) Eileen should specialize in both tasks. 
E) neither person should specialize. 
A) Bill should specialize in both tasks. 
B) Bill should specialize in cooking dinner;Eileen should specialize in mowing the lawn. 
C) Bill should specialize in mowing the lawn;Eileen should specialize in cooking dinner. 
D) Eileen should specialize in both tasks. 
E) neither person should specialize.

Question 15

During the early years of the US industrial revolution,the US welcomed immigrants from abroad.How would immigration affect the production possibilities frontier?

Accepted Answer

A) turns a linear PPF into a convex PPF 
B) turns a convex PPF into a linear PPF 
C) no impact 
D) shift it in 
E) shift it out 
A) turns a linear PPF into a convex PPF 
B) turns a convex PPF into a linear PPF 
C) no impact 
D) shift it in 
E) shift it out

Question 16

When there is an improvement in technology,holding all else constant,

Accepted Answer

A) the production possibilities frontier will shift inward 
B) society faces larger opportunity costs from shifting productive resources from one use to another 
C) goods and services will increase in price 
D) the economy must have some idle resources 
E) the production possibilities frontier will shift outward 
A) the production possibilities frontier will shift inward 
B) society faces larger opportunity costs from shifting productive resources from one use to another 
C) goods and services will increase in price 
D) the economy must have some idle resources 
E) the production possibilities frontier will shift outward

Question 17

Figure 2-1
  
-Figure 2-1 illustrates the trade-off for a particular student between time spent studying per week and income per week from working part-time.If this student does not study at all,how much income can they earn?

Accepted Answer

A) $0 
B) $40 
C) $80 
D) $100 
E) $120 
A) $0 
B) $40 
C) $80 
D) $100 
E) $120

Question 18

One explanation for the drop in the standard of living in the Soviet Union during World War II is that

Accepted Answer

A) the war led to a movement along its production possibilities frontier away from civilian goods and towards military goods 
B) the war led to an outward shift in the production possibilities frontier due to a rise in the level of technology 
C) prior to the war,there was much productive inefficiency in the Soviet Union 
D) the opportunity cost of producing military goods was zero in their economic system 
E) resources used to produce civilian goods were equally capable of producing military goods 
A) the war led to a movement along its production possibilities frontier away from civilian goods and towards military goods 
B) the war led to an outward shift in the production possibilities frontier due to a rise in the level of technology 
C) prior to the war,there was much productive inefficiency in the Soviet Union 
D) the opportunity cost of producing military goods was zero in their economic system 
E) resources used to produce civilian goods were equally capable of producing military goods

Question 19

In a command system,the decision about what should be produced is made by

Accepted Answer

A) a central authority 
B) the market 
C) repeating what was done in the past 
D) business firms 
E) consumers 
A) a central authority 
B) the market 
C) repeating what was done in the past 
D) business firms 
E) consumers

Question 20

Specialization and exchange

Accepted Answer

A) generally leads to increased production of some goods at the cost of decreased production of other goods 
B) causes the production possibilities frontier to shift inward 
C) increases total production of every good only if the total amount of resources also increases 
D) alters the allocation of production among individuals or nations,but does not alter total production levels 
E) allows greater total production of every good without an increase in the total amount of resources 
A) generally leads to increased production of some goods at the cost of decreased production of other goods 
B) causes the production possibilities frontier to shift inward 
C) increases total production of every good only if the total amount of resources also increases 
D) alters the allocation of production among individuals or nations,but does not alter total production levels 
E) allows greater total production of every good without an increase in the total amount of resources

A method of allocating scarce resources is a necessary component of

According to the law of increasing opportunity cost,

Which of the following could lead to an inward shift of the production possibilities frontier?

Figure 2-2 -Assume that U.S.agricultural land is used either to raise cattle for beef or to grow wheat.Figure 2-2 represents the production possibility frontier for beef and wheat.The opportunity cost of moving from point G to point F equals

Jenni can change a car's oil in 10 minutes and clean a bathroom in 20 minutes.Rob can change a car's oil in 20 minutes and clean a bathroom in 10 minutes.Therefore,

Tax collections in the United States are an example of

-Figure 2-5 shows five different combinations of rockets and cruise ships that a country could manufacture.The production possibilities frontier that is illustrated in Figure 2-5 exhibits

Specialization of labor typically leads to higher levels of productive inefficiency in an economy.

Sven has a comparative advantage over Alice in cooking but not in doing the laundry.Which of the following must be true?

Under market capitalism,resources are allocated by

Under a socialist system,

The U.S.system of resource ownership

The concave shape of the production possibilities frontier reflects

Bill can cook dinner in 45 minutes and mow the lawn in 1.5 hours.Eileen can cook dinner in 1.5 hours and mow the lawn in 2 hours.Which of the following statements is correct?

During the early years of the US industrial revolution,the US welcomed immigrants from abroad.How would immigration affect the production possibilities frontier?

When there is an improvement in technology,holding all else constant,

Figure 2-1 -Figure 2-1 illustrates the trade-off for a particular student between time spent studying per week and income per week from working part-time.If this student does not study at all,how much income can they earn?

One explanation for the drop in the standard of living in the Soviet Union during World War II is that

In a command system,the decision about what should be produced is made by

Specialization and exchange

What Is Economics

Supply and Demand

Working With Supply and Demand

Elasticity

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopolistic Competition and Oligopoly

Monopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters

Exam 2: Scarcity, choice, and Economic Systems

A method of allocating scarce resources is a necessary component of

According to the law of increasing opportunity cost,

Which of the following could lead to an inward shift of the production possibilities frontier?

Figure 2-2 -Assume that U.S.agricultural land is used either to raise cattle for beef or to grow wheat.Figure 2-2 represents the production possibility frontier for beef and wheat.The opportunity cost of moving from point G to point F equals

Jenni can change a car's oil in 10 minutes and clean a bathroom in 20 minutes.Rob can change a car's oil in 20 minutes and clean a bathroom in 10 minutes.Therefore,

Tax collections in the United States are an example of

-Figure 2-5 shows five different combinations of rockets and cruise ships that a country could manufacture.The production possibilities frontier that is illustrated in Figure 2-5 exhibits

Specialization of labor typically leads to higher levels of productive inefficiency in an economy.

Sven has a comparative advantage over Alice in cooking but not in doing the laundry.Which of the following must be true?

Under market capitalism,resources are allocated by

Under a socialist system,

The U.S.system of resource ownership

The concave shape of the production possibilities frontier reflects

Bill can cook dinner in 45 minutes and mow the lawn in 1.5 hours.Eileen can cook dinner in 1.5 hours and mow the lawn in 2 hours.Which of the following statements is correct?

During the early years of the US industrial revolution,the US welcomed immigrants from abroad.How would immigration affect the production possibilities frontier?

When there is an improvement in technology,holding all else constant,

Figure 2-1 -Figure 2-1 illustrates the trade-off for a particular student between time spent studying per week and income per week from working part-time.If this student does not study at all,how much income can they earn?

One explanation for the drop in the standard of living in the Soviet Union during World War II is that

In a command system,the decision about what should be produced is made by

Specialization and exchange

What Is Economics

Supply and Demand

Working With Supply and Demand

Elasticity

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopolistic Competition and Oligopoly

Monopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters