Question 1

The production possibilities curve tells us

Accepted Answer

A)  the specific combination of two products that is most desired by society. 
B)  that costs do not change as society varies its output. 
C)  that costs are irrelevant in a society that has fixed resources. 
D)  the combinations of two goods that can be produced with society's available resources. 
A)  the specific combination of two products that is most desired by society. 
B)  that costs do not change as society varies its output. 
C)  that costs are irrelevant in a society that has fixed resources. 
D)  the combinations of two goods that can be produced with society's available resources.

Question 2

An increase in immigration would shift the production possibilities curve to the left.

Accepted Answer

A) True 
 B)False

Question 3

Economic resources are also called

Accepted Answer

A)  free gifts of nature. 
B)  consumption goods. 
C)  units of money capital. 
D)  factors of production. 
A)  free gifts of nature. 
B)  consumption goods. 
C)  units of money capital. 
D)  factors of production.

Question 4

Cuba is a command economy that suffered a decline in economic growth because of a cut in the aid provided by the former Soviet Union when the latter collapsed. As a consequence, Cuba

Accepted Answer

A)  experienced an outward shift of its production possibilities curve. 
B)  experienced an inward shift of its production possibilities curve. 
C)  moved from one point to another along its existing production possibilities curve. 
D)  went to a point inside its production possibilities curve. 
A)  experienced an outward shift of its production possibilities curve. 
B)  experienced an inward shift of its production possibilities curve. 
C)  moved from one point to another along its existing production possibilities curve. 
D)  went to a point inside its production possibilities curve.

Question 5

If all discrimination in the United States were eliminated, the economy would

Accepted Answer

A)  have a less concave production possibilities curve. 
B)  produce at some point closer to its production possibilities curve. 
C)  be able to produce at some point outside of its production possibilities curve. 
D)  produce more consumer goods and fewer investment goods. 
A)  have a less concave production possibilities curve. 
B)  produce at some point closer to its production possibilities curve. 
C)  be able to produce at some point outside of its production possibilities curve. 
D)  produce more consumer goods and fewer investment goods.

Question 6

The production possibilities curve shows

Accepted Answer

A)  the various combinations of two goods that can be produced when society employs all of its scarce resources. 
B)  the minimum outputs of two goods that will sustain a society. 
C)  the various combinations of two goods that can be produced when some resources are unemployed. 
D)  the ideal, but unattainable, combinations of two goods that would maximize consumer satisfaction. 
A)  the various combinations of two goods that can be produced when society employs all of its scarce resources. 
B)  the minimum outputs of two goods that will sustain a society. 
C)  the various combinations of two goods that can be produced when some resources are unemployed. 
D)  the ideal, but unattainable, combinations of two goods that would maximize consumer satisfaction.

Question 7

The output of digital music players should be

Accepted Answer

A)  reduced if marginal benefits exceed marginal costs. 
B)  reduced if marginal costs exceed marginal benefits. 
C)  increased if marginal costs exceed marginal benefits. 
D)  reduced to zero if their unit costs exceed the unit costs of alternative products. 
A)  reduced if marginal benefits exceed marginal costs. 
B)  reduced if marginal costs exceed marginal benefits. 
C)  increased if marginal costs exceed marginal benefits. 
D)  reduced to zero if their unit costs exceed the unit costs of alternative products.

Question 8

A production possibilities curve illustrates

Accepted Answer

A)  scarcity. 
B)  market prices. 
C)  consumer preferences. 
D)  the distribution of income. 
A)  scarcity. 
B)  market prices. 
C)  consumer preferences. 
D)  the distribution of income.

Question 9

Increasing the share of your income that you save is good for you. Therefore, it would be good for the whole economy if everyone saved more. This exemplifies the

Accepted Answer

A)  post hoc fallacy. 
B)  fallacy of composition. 
C)  use of loaded terminology. 
D)  confusion between correlation and causation. 
A)  post hoc fallacy. 
B)  fallacy of composition. 
C)  use of loaded terminology. 
D)  confusion between correlation and causation.

Question 10

(Consider This) At fast-food restaurants

Accepted Answer

A)  consumers enjoy complete and accurate information. 
B)  decisions are usually made by trial and error. 
C)  decisions entail comparisons of marginal costs and marginal benefits. 
D)  benefits always exceed costs. 
A)  consumers enjoy complete and accurate information. 
B)  decisions are usually made by trial and error. 
C)  decisions entail comparisons of marginal costs and marginal benefits. 
D)  benefits always exceed costs.

Question 11

In a graph showing the relationship between variables X and Y, ceteris paribus means that

Accepted Answer

A)  X is inversely related to Y. 
B)  X is positively related to Y. 
C)  X and Y are independent. 
D)  other variables not shown are held constant. 
A)  X is inversely related to Y. 
B)  X is positively related to Y. 
C)  X and Y are independent. 
D)  other variables not shown are held constant.

Question 12

The economizing problem faced by society is essentially one of deciding how to make the best use of

Accepted Answer

A)  limited economic resources to satisfy limited wants. 
B)  unlimited economic resources to satisfy unlimited wants. 
C)  unlimited economic resources to satisfy limited wants. 
D)  limited economic resources to satisfy unlimited economic wants. 
A)  limited economic resources to satisfy limited wants. 
B)  unlimited economic resources to satisfy unlimited wants. 
C)  unlimited economic resources to satisfy limited wants. 
D)  limited economic resources to satisfy unlimited economic wants.

Question 13

Economists have difficulty applying the scientific method because

Accepted Answer

A)  economics has a short history. 
B)  the scientific method does not really apply to economics. 
C)  people are the focus of economics, and their behavior is highly predictable. 
D)  controlled laboratory experiments in economics are often not feasible. 
A)  economics has a short history. 
B)  the scientific method does not really apply to economics. 
C)  people are the focus of economics, and their behavior is highly predictable. 
D)  controlled laboratory experiments in economics are often not feasible.

Question 14

The negative slope of the production possibilities curve is a graphical way of indicating that

Accepted Answer

A)  any economy "can have its cake and eat it too." 
B)  to produce more of one product, we must do with less of another. 
C)  the principle of increasing opportunity costs applies to only parts of the economy. 
D)  consumers buy more when prices are low than when prices are high. 
A)  any economy "can have its cake and eat it too." 
B)  to produce more of one product, we must do with less of another. 
C)  the principle of increasing opportunity costs applies to only parts of the economy. 
D)  consumers buy more when prices are low than when prices are high.

Question 15

Any point inside the production possibilities curve indicates

Accepted Answer

A)  the presence of technological change. 
B)  that resources are imperfectly substitutable among alternative uses. 
C)  the presence of inflationary pressures. 
D)  that more output could be produced with the available resources. 
A)  the presence of technological change. 
B)  that resources are imperfectly substitutable among alternative uses. 
C)  the presence of inflationary pressures. 
D)  that more output could be produced with the available resources.

Question 16

The question below is based on the following four sets of data-pairs: (1) A and B, (2) C and D, (3) E and F, and (4) G and H. In each set, the independent variable is in the left column and the dependent variable is in the right column.   The slope of the linear graph that pictures data set 2 above is

Accepted Answer

A)  .10. 
B)  20. 
C)  5. 
D)  10. 
A)  .10. 
B)  20. 
C)  5. 
D)  10.

Question 17

Assume that a consumer has a given budget or income of $12 and that she can buy only two goods, apples or bananas. The price of an apple is $1.50 and the price of a banana is $0.75. This means that, in order to buy two bananas, this consumer must forgo

Accepted Answer

A)  1 apple. 
B)  1.5 apples. 
C)  0.5 apple. 
D)  0.75 apple. 
A)  1 apple. 
B)  1.5 apples. 
C)  0.5 apple. 
D)  0.75 apple.

Question 18

If A is the dependent variable and B is the independent variable, then a change in A results in a change in B.

Accepted Answer

A) True 
 B)False

Question 19

Answer the question on the basis of the following data.   The data suggest that

Accepted Answer

A)  consumption varies inversely with after-tax income. 
B)  consumption varies directly with after-tax income. 
C)  consumption and after-tax income are unrelated. 
D)  a tax increase will increase consumption. 
A)  consumption varies inversely with after-tax income. 
B)  consumption varies directly with after-tax income. 
C)  consumption and after-tax income are unrelated. 
D)  a tax increase will increase consumption.

Question 20

A nation can produce two products: steel and wheat. The table below is the nation's production possibilities schedule.   In moving stepwise from possibility A to B to C … to F, the marginal opportunity cost of a unit of steel in terms of wheat

Accepted Answer

A)  increases. 
B)  decreases. 
C)  remains constant. 
D)  increases at first, then decreases. 
A)  increases. 
B)  decreases. 
C)  remains constant. 
D)  increases at first, then decreases.

Exam 1: Limits, Alternatives, and Choices

The production possibilities curve tells us

An increase in immigration would shift the production possibilities curve to the left.

Economic resources are also called

Cuba is a command economy that suffered a decline in economic growth because of a cut in the aid provided by the former Soviet Union when the latter collapsed. As a consequence, Cuba

If all discrimination in the United States were eliminated, the economy would

The production possibilities curve shows

The output of digital music players should be

A production possibilities curve illustrates

Increasing the share of your income that you save is good for you. Therefore, it would be good for the whole economy if everyone saved more. This exemplifies the

(Consider This) At fast-food restaurants

In a graph showing the relationship between variables X and Y, ceteris paribus means that

The economizing problem faced by society is essentially one of deciding how to make the best use of

Economists have difficulty applying the scientific method because

The negative slope of the production possibilities curve is a graphical way of indicating that

Any point inside the production possibilities curve indicates

Assume that a consumer has a given budget or income of $12 and that she can buy only two goods, apples or bananas. The price of an apple is $1.50 and the price of a banana is $0.75. This means that, in order to buy two bananas, this consumer must forgo

If A is the dependent variable and B is the independent variable, then a change in A results in a change in B.

Answer the question on the basis of the following data. The data suggest that

A nation can produce two products: steel and wheat. The table below is the nation's production possibilities schedule. In moving stepwise from possibility A to B to C … to F, the marginal opportunity cost of a unit of steel in terms of wheat

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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