Question 1

When one producer can create more of a good than another producer using the same quantity of resources,the first producer has:

Accepted Answer

A)  a zero-sum game. 
B)  gains from trade. 
C)  an absolute advantage. 
D)  a comparative advantage. 
E)  increasing relative costs. 
A)  a zero-sum game. 
B)  gains from trade. 
C)  an absolute advantage. 
D)  a comparative advantage. 
E)  increasing relative costs.

Question 2

Which of the following is a positive statement?

Accepted Answer

A)  Winters in Arkansas are too cold. 
B)  Everyone should work in a bank to understand the true value of money. 
C)  Harvard University is the top education institution in the country. 
D)  On average, people save 15% when they switch to GEICO. 
E)  Everyone ought to have a life insurance policy. 
A)  Winters in Arkansas are too cold. 
B)  Everyone should work in a bank to understand the true value of money. 
C)  Harvard University is the top education institution in the country. 
D)  On average, people save 15% when they switch to GEICO. 
E)  Everyone ought to have a life insurance policy.

Question 3

Is there an opportunity cost to increased investment in capital goods today?

Accepted Answer

A)  Yes, increased production of capital goods means fewer consumer goods today. 
B)  Yes, increased production of capital goods today means less economic growth in the future. 
C)  No, increased production of capital goods today does not mean fewer consumer goods today. 
D)  No, increased production of capital goods today guarantees more consumption today. 
E)  No, if society is producing at an efficient point on the production possibilities frontier (PPF), then there is no opportunity cost to investment in capital goods. 
A)  Yes, increased production of capital goods means fewer consumer goods today. 
B)  Yes, increased production of capital goods today means less economic growth in the future. 
C)  No, increased production of capital goods today does not mean fewer consumer goods today. 
D)  No, increased production of capital goods today guarantees more consumption today. 
E)  No, if society is producing at an efficient point on the production possibilities frontier (PPF), then there is no opportunity cost to investment in capital goods.

Question 4

Ceteris paribus,if a society is producing at a point on the production possibilities frontier (PPF),it can only increase the production of one good by:

Accepted Answer

A)  also increasing the production of the second good. 
B)  decreasing the production of the second good. 
C)  increasing the price of the second good. 
D)  decreasing the price of the second good. 
E)  reducing the resources available for production. 
A)  also increasing the production of the second good. 
B)  decreasing the production of the second good. 
C)  increasing the price of the second good. 
D)  decreasing the price of the second good. 
E)  reducing the resources available for production.

Question 5

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the next two questions.
  
-What is DiNozzo's opportunity cost for solving a crime?

Accepted Answer

A)  20 solved crimes 
B)  30 solved crimes 
C)  5 solved crimes 
D)  1/20 of a boat 
E)  1/10 of a boat 
A)  20 solved crimes 
B)  30 solved crimes 
C)  5 solved crimes 
D)  1/20 of a boat 
E)  1/10 of a boat

Question 6

In the movie A Knight's Tale,three peasants win a jousting tournament and must decide whether they should enjoy most of their winnings now or use most of it for training to improve their future jousting performance.Use appropriate production possibilities frontiers (PPFs) and words to describe the investment trade-off they face.

Accepted Answer

@#IMG-DLM& 
This is a classic example of the trade

Question 7

Michael and Angelo are both artists who can create sculptures or paintings each day. The following table describes their maximum outputs per day. Use this table to answer the next four questions.
  
-What is Michael's opportunity cost of a sculpture?

Accepted Answer

A)  2 paintings 
B)  1/2 painting 
C)  3 paintings 
D)  1/3 sculpture 
E)  1/2 sculpture 
A)  2 paintings 
B)  1/2 painting 
C)  3 paintings 
D)  1/3 sculpture 
E)  1/2 sculpture

Question 8

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between making pizzas and making stromboli. Refer to these figures to answer the next three questions.
  
-What is Pam's opportunity cost of making 1 stromboli?

Accepted Answer

A)  30 pizzas 
B)  20 stromboli 
C)  2 pizzas 
D)  1.5 pizzas 
E)  2/3 pizza 
A)  30 pizzas 
B)  20 stromboli 
C)  2 pizzas 
D)  1.5 pizzas 
E)  2/3 pizza

Question 9

When one producer has a comparative advantage in production,she:

Accepted Answer

A)  can produce more output than someone else using the same quantity of resources. 
B)  can produce a good at a lower opportunity cost than someone else. 
C)  does not benefit from trade with other producers. 
D)  is unable to reach her production possibilities frontier (PPF). 
E)  trades only with others who have the same comparative advantage. 
A)  can produce more output than someone else using the same quantity of resources. 
B)  can produce a good at a lower opportunity cost than someone else. 
C)  does not benefit from trade with other producers. 
D)  is unable to reach her production possibilities frontier (PPF). 
E)  trades only with others who have the same comparative advantage.

Question 10

A graph that shows the maximum attainable combinations of two goods when society efficiently uses its productive resources is called:

Accepted Answer

A)  a production possibilities frontier (PPF). 
B)  a supply curve. 
C)  opportunity cost. 
D)  a consumer demand curve. 
E)  absolute advantage. 
A)  a production possibilities frontier (PPF). 
B)  a supply curve. 
C)  opportunity cost. 
D)  a consumer demand curve. 
E)  absolute advantage.

Question 11

Refer to the accompanying figure to answer the next four questions.
  
-Given your current resources,you would need even more hours in each day in order to attain:

Accepted Answer

A)  point A. 
B)  point B. 
C)  point C. 
D)  point D. 
E)  point E. 
A)  point A. 
B)  point B. 
C)  point C. 
D)  point D. 
E)  point E.

Question 12

A model without any simplifying assumptions:

Accepted Answer

A)  is highly complex and likely unworkable. 
B)  excludes important predictive variables. 
C)  is very helpful for solving tough, real-world problems. 
D)  does not look like the real-world problem it is meant to address. 
E)  provides simplified solutions to complex problems. 
A)  is highly complex and likely unworkable. 
B)  excludes important predictive variables. 
C)  is very helpful for solving tough, real-world problems. 
D)  does not look like the real-world problem it is meant to address. 
E)  provides simplified solutions to complex problems.

Question 13

You have a comparative advantage in producing a good whenever:

Accepted Answer

A)  you enjoy producing that good. 
B)  you can produce more of the good than someone else can using the same resources. 
C)  your opportunity cost is constant. 
D)  your opportunity cost of producing that good is lower than that of other producers. 
E)  you have specific training in the production of that good. 
A)  you enjoy producing that good. 
B)  you can produce more of the good than someone else can using the same resources. 
C)  your opportunity cost is constant. 
D)  your opportunity cost of producing that good is lower than that of other producers. 
E)  you have specific training in the production of that good.

Question 14

Refer to the following figures to answer the next two questions.
  
-Which allocation point in the short-run production possibilities frontier (PPF) will lead to the most significant growth in the long-run PPF?

Accepted Answer

A)  point A 
B)  point B 
C)  point C 
D)  point D 
E)  point E 
A)  point A 
B)  point B 
C)  point C 
D)  point D 
E)  point E

Question 15

Refer to the following figure for the next two questions.
  
-Economic growth can be depicted on a production possibilities frontier (PPF) as an:

Accepted Answer

A)  inward shift of the PPF. 
B)  outward shift of the PPF. 
C)  inward rotation along the x axis. 
D)  inward rotation along the y axis. 
E)  increase in opportunity cost. 
A)  inward shift of the PPF. 
B)  outward shift of the PPF. 
C)  inward rotation along the x axis. 
D)  inward rotation along the y axis. 
E)  increase in opportunity cost.

Question 16

Think of the production possibilities frontier (PPF) model.When society is producing the largest possible output from its resources,it is operating:

Accepted Answer

A)  inefficiently. 
B)  efficiently. 
C)  with no opportunity cost. 
D)  inside (within) the PPF. 
E)  beyond its opportunity cost. 
A)  inefficiently. 
B)  efficiently. 
C)  with no opportunity cost. 
D)  inside (within) the PPF. 
E)  beyond its opportunity cost.

Question 17

Variables that are not accounted for in a model are called:

Accepted Answer

A)  endogenous factors. 
B)  exogenous factors. 
C)  normative statements. 
D)  positive statements. 
E)  the scientific method. 
A)  endogenous factors. 
B)  exogenous factors. 
C)  normative statements. 
D)  positive statements. 
E)  the scientific method.

Question 18

Goods that are produced today in order to make other valuable goods and services in the future are called:

Accepted Answer

A)  normal goods. 
B)  inferior goods. 
C)  consumer goods. 
D)  capital goods. 
E)  personal goods. 
A)  normal goods. 
B)  inferior goods. 
C)  consumer goods. 
D)  capital goods. 
E)  personal goods.

Question 19

Michael and Angelo are both artists who can create sculptures or paintings each day. The following table describes their maximum outputs per day. Use this table to answer the next four questions.
  
-What is Angelo's opportunity cost of a painting?

Accepted Answer

A)  1/3 painting 
B)  1/3 sculpture 
C)  2/5 sculpture 
D)  3 paintings 
E)  3 sculptures 
A)  1/3 painting 
B)  1/3 sculpture 
C)  2/5 sculpture 
D)  3 paintings 
E)  3 sculptures

Question 20

Refer to the following figure to answer the next four questions.
  
-Which of the following represents a point that is unattainable with current resources and technology?

Accepted Answer

A)  point A 
B)  point B 
C)  point C 
D)  point D 
E)  point E 
A)  point A 
B)  point B 
C)  point C 
D)  point D 
E)  point E

When one producer can create more of a good than another producer using the same quantity of resources,the first producer has:

Which of the following is a positive statement?

Is there an opportunity cost to increased investment in capital goods today?

Ceteris paribus,if a society is producing at a point on the production possibilities frontier (PPF),it can only increase the production of one good by:

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the next two questions. -What is DiNozzo's opportunity cost for solving a crime?

Michael and Angelo are both artists who can create sculptures or paintings each day. The following table describes their maximum outputs per day. Use this table to answer the next four questions. -What is Michael's opportunity cost of a sculpture?

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between making pizzas and making stromboli. Refer to these figures to answer the next three questions. -What is Pam's opportunity cost of making 1 stromboli?

When one producer has a comparative advantage in production,she:

A graph that shows the maximum attainable combinations of two goods when society efficiently uses its productive resources is called:

Refer to the accompanying figure to answer the next four questions. -Given your current resources,you would need even more hours in each day in order to attain:

A model without any simplifying assumptions:

You have a comparative advantage in producing a good whenever:

Refer to the following figures to answer the next two questions. -Which allocation point in the short-run production possibilities frontier (PPF) will lead to the most significant growth in the long-run PPF?

Refer to the following figure for the next two questions. -Economic growth can be depicted on a production possibilities frontier (PPF) as an:

Think of the production possibilities frontier (PPF) model.When society is producing the largest possible output from its resources,it is operating:

Variables that are not accounted for in a model are called:

Goods that are produced today in order to make other valuable goods and services in the future are called:

Michael and Angelo are both artists who can create sculptures or paintings each day. The following table describes their maximum outputs per day. Use this table to answer the next four questions. -What is Angelo's opportunity cost of a painting?

Refer to the following figure to answer the next four questions. -Which of the following represents a point that is unattainable with current resources and technology?

The Five Foundations of Economics

The Market at Work: Supply and Demand

Price Controls

The Efficiency of Markets and the Costs of Taxation

Introduction to Macroeconomics and Gross Domestic Product

Unemployment

The Price Level and Inflation

Savings, interest Rates, and the Market for Loanable Funds

Financial Markets and Securities

Economic Growth and the Wealth of Nations

Growth Theory

The Aggregate Demandaggregate Supply Model

The Great Recession, the Great Depression, and Great Macroeconomic Debates

Federal Budgets: the Tools of Fiscal Policy

Fiscal Policy

Money and the Federal Reserve

Monetary Policy

International Trade

International Finance

Filters

Exam 2: Model Building and Gains From Trade

When one producer can create more of a good than another producer using the same quantity of resources,the first producer has:

Which of the following is a positive statement?

Is there an opportunity cost to increased investment in capital goods today?

Ceteris paribus,if a society is producing at a point on the production possibilities frontier (PPF),it can only increase the production of one good by:

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the next two questions. -What is DiNozzo's opportunity cost for solving a crime?

Michael and Angelo are both artists who can create sculptures or paintings each day. The following table describes their maximum outputs per day. Use this table to answer the next four questions. -What is Michael's opportunity cost of a sculpture?

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between making pizzas and making stromboli. Refer to these figures to answer the next three questions. -What is Pam's opportunity cost of making 1 stromboli?

When one producer has a comparative advantage in production,she:

A graph that shows the maximum attainable combinations of two goods when society efficiently uses its productive resources is called:

Refer to the accompanying figure to answer the next four questions. -Given your current resources,you would need even more hours in each day in order to attain:

A model without any simplifying assumptions:

You have a comparative advantage in producing a good whenever:

Refer to the following figures to answer the next two questions. -Which allocation point in the short-run production possibilities frontier (PPF) will lead to the most significant growth in the long-run PPF?

Refer to the following figure for the next two questions. -Economic growth can be depicted on a production possibilities frontier (PPF) as an:

Think of the production possibilities frontier (PPF) model.When society is producing the largest possible output from its resources,it is operating:

Variables that are not accounted for in a model are called:

Goods that are produced today in order to make other valuable goods and services in the future are called:

Michael and Angelo are both artists who can create sculptures or paintings each day. The following table describes their maximum outputs per day. Use this table to answer the next four questions. -What is Angelo's opportunity cost of a painting?

Refer to the following figure to answer the next four questions. -Which of the following represents a point that is unattainable with current resources and technology?

The Five Foundations of Economics

The Market at Work: Supply and Demand

Price Controls

The Efficiency of Markets and the Costs of Taxation

Introduction to Macroeconomics and Gross Domestic Product

Unemployment

The Price Level and Inflation

Savings, interest Rates, and the Market for Loanable Funds

Financial Markets and Securities

Economic Growth and the Wealth of Nations

Growth Theory

The Aggregate Demandaggregate Supply Model

The Great Recession, the Great Depression, and Great Macroeconomic Debates

Federal Budgets: the Tools of Fiscal Policy

Fiscal Policy

Money and the Federal Reserve

Monetary Policy

International Trade

International Finance

Filters