Question 1

The division of labor benefits society only if

Accepted Answer

A) a system of exchange exists. 
B) society uses all of its resources efficiently. 
C) society has no specialized resources. 
D) labor resources are not scarce. 
A) a system of exchange exists. 
B) society uses all of its resources efficiently. 
C) society has no specialized resources. 
D) labor resources are not scarce.

Question 2

According to the principle of increasing costs, as the production of one good expands, the opportunity cost of producing another unit of the good tends to increase.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

If the production possibilities curve is a straight line,

Accepted Answer

A) opportunity costs rise as output of either commodity is expanded. 
B) resources are not equally productive in the production of both goods. 
C) opportunity costs are negative. 
D) resources can be moved from the production of one good to production of others with no loss of productivity. 
A) opportunity costs rise as output of either commodity is expanded. 
B) resources are not equally productive in the production of both goods. 
C) opportunity costs are negative. 
D) resources can be moved from the production of one good to production of others with no loss of productivity.

Question 5

If the budget deficit was eliminated, the federal government would have more money than it could spend.

Accepted Answer

A) True 
 B)False

Question 6

Firms are encouraged by the profit motive to use inputs efficiently.

Accepted Answer

A) True 
 B)False

Question 7

Resources are used to create goods and services.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following observations is true?

Accepted Answer

A) Free markets will achieve all of society's goals. 
B) The ability to buy goods is divided equally among consumers. 
C) The market deals with efficiency in production through the profit motive. 
D) The market system encourages firms to use inputs wastefully. 
A) Free markets will achieve all of society's goals. 
B) The ability to buy goods is divided equally among consumers. 
C) The market deals with efficiency in production through the profit motive. 
D) The market system encourages firms to use inputs wastefully.

Question 9

A society must make three sorts of decision: what goods to produce, how to produce them, and how to distribute them.

Accepted Answer

A) True 
 B)False

Question 10

Figure 3-5
  
-At present, faculty in the Economics Department teach introductory and upper-level courses.Which graph in Figure 3-5 represents the change in the production possibilities of the Economics Department after a policy of using graduate students in addition to faculty to teach introductory sections was implemented?

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
A) 1 
B) 2 
C) 3 
D) 4

Question 11

Free markets​ can:

Accepted Answer

A) ​prouduce goods and services with maximum efficiency 
B) ​solve unemployment 
C) ​protect the environment 
D) ​all of these 
A) ​prouduce goods and services with maximum efficiency 
B) ​solve unemployment 
C) ​protect the environment 
D) ​all of these

Question 12

Scarcity is the fundamental problem of the economy.

Accepted Answer

A) True 
 B)False

Question 13

The main reason that finished goods are scarce is that

Accepted Answer

A) raw material resources are scarce. 
B) factories are not operated efficiently. 
C) distribution systems are clogged. 
D) taxes are destroying work incentives. 
E) All of the above are correct. 
A) raw material resources are scarce. 
B) factories are not operated efficiently. 
C) distribution systems are clogged. 
D) taxes are destroying work incentives. 
E) All of the above are correct.

Question 14

What are the three coordination tasks which markets resolve?

Accepted Answer

They are (1) how to produce an

Question 15

Increasing opportunity cost tends to occur if

Accepted Answer

A) management is disorganized. 
B) markets do not equate money and opportunity cost. 
C) production is inefficient. 
D) resources are scarce. 
E) resources are specialized. 
A) management is disorganized. 
B) markets do not equate money and opportunity cost. 
C) production is inefficient. 
D) resources are scarce. 
E) resources are specialized.

Exam 3: The Fundamental Economic Problem: Scarcity and Choice

The division of labor benefits society only if

According to the principle of increasing costs, as the production of one good expands, the opportunity cost of producing another unit of the good tends to increase.

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

If the production possibilities curve is a straight line,

If the budget deficit was eliminated, the federal government would have more money than it could spend.

Firms are encouraged by the profit motive to use inputs efficiently.

Resources are used to create goods and services.

Which of the following observations is true?

A society must make three sorts of decision: what goods to produce, how to produce them, and how to distribute them.

Free markets​ can:

Scarcity is the fundamental problem of the economy.

The main reason that finished goods are scarce is that

What are the three coordination tasks which markets resolve?

Increasing opportunity cost tends to occur if

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: the Price System

The Shortcomings of Free Markets

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

Is Useconomic Leadership Threatened

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

He 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

Free markets can: