Question 1

Increases in resources or improvements in technology will tend to cause a society's production possibilities curve to:

Accepted Answer

A)  shift inward to the left. 
B)  shift outward to the right. 
C)  remain unchanged. 
D)  become vertical. 
A)  shift inward to the left. 
B)  shift outward to the right. 
C)  remain unchanged. 
D)  become vertical.

Question 2

In the 1980s, the federal government undertook a major build-up of the military sector, leading to reports that prices charged by military contractors were spiraling upward. According to production possibilities analysis, this result is not surprising due to:

Accepted Answer

A)  the law of increasing opportunity cost. 
B)  economic efficiency. 
C)  technical efficiency. 
D)  resource underutilization. 
A)  the law of increasing opportunity cost. 
B)  economic efficiency. 
C)  technical efficiency. 
D)  resource underutilization.

Question 3

Efficient production exists when the economy is:

Accepted Answer

A)  operating inside its production possibilities curve. 
B)  operating on its production possibilities curve. 
C)  operating outside its production possibilities curve. 
D)  moving beyond its production possibilities curve. 
A)  operating inside its production possibilities curve. 
B)  operating on its production possibilities curve. 
C)  operating outside its production possibilities curve. 
D)  moving beyond its production possibilities curve.

Question 4

A factor of production that is produced in order to produce something else is called:

Accepted Answer

A)  money. 
B)  labor. 
C)  technology. 
D)  capital. 
A)  money. 
B)  labor. 
C)  technology. 
D)  capital.

Question 5

In drawing a production possibilities curve, it is assumed that:

Accepted Answer

A)  technology does not change. 
B)  the economy is fully employed and may not be efficient. 
C)  there are increasing qualities of the factors of production. 
D)  all of the above are true. 
A)  technology does not change. 
B)  the economy is fully employed and may not be efficient. 
C)  there are increasing qualities of the factors of production. 
D)  all of the above are true.

Question 6

Money is a factor of production because it is part of capital.

Accepted Answer

A) True 
 B)False

Question 7

Production possibilities curves are bowed out away from the origin. Explain why. Can you think of a situation in which the production possibilities curve is a straight line and has a constant slope?

Accepted Answer

Production possibilities curves are bowe

Question 8

The best example of a command socialist economy is:

Accepted Answer

A)  Russia. 
B)  China after 1979. 
C)  Cuba. 
D)  the United States. 
A)  Russia. 
B)  China after 1979. 
C)  Cuba. 
D)  the United States.

Question 9

Factors of production are:

Accepted Answer

A)  the resources the economy has available to produce goods and services. 
B)  generally unlimited in modern economies. 
C)  always employed in modern economies. 
D)  the knowledge that can be applied to the production of goods and services. 
A)  the resources the economy has available to produce goods and services. 
B)  generally unlimited in modern economies. 
C)  always employed in modern economies. 
D)  the knowledge that can be applied to the production of goods and services.

Question 10

Use the following to answer question(s): 
Exhibit: Consumer and Capital Goods
  
-(Exhibit: Consumer and Capital Goods) If the economy is operating at point Y on currently relevant Curve 1, this means that:

Accepted Answer

A)  the economy is at full employment and is efficient. 
B)  the economy is less than fully employed. 
C)  the economy is not efficient. 
D)  economic growth is not possible in the future. 
A)  the economy is at full employment and is efficient. 
B)  the economy is less than fully employed. 
C)  the economy is not efficient. 
D)  economic growth is not possible in the future.

Question 11

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

Accepted Answer

A)  have been produced. 
B)  not be part of the environment. 
C)  be part of a factory or building. 
D)  be available for the production of goods and services. 
A)  have been produced. 
B)  not be part of the environment. 
C)  be part of a factory or building. 
D)  be available for the production of goods and services.

Question 12

Knowledge that can be applied to the production of goods and services is:

Accepted Answer

A)  natural resources. 
B)  specialization. 
C)  technology. 
D)  comparative advantage. 
A)  natural resources. 
B)  specialization. 
C)  technology. 
D)  comparative advantage.

Question 13

Use the following to answer question(s): 
Exhibit: Production Possibilities Curve 2
  
-(Exhibit: Production Possibilities Curve 2) The economy will experience its least growth by operating at point:

Accepted Answer

A)  N. 
B)  P. 
C)  Q. 
D)  R. 
A)  N. 
B)  P. 
C)  Q. 
D)  R.

Question 14

The basic economic differences among nations throughout history concerning institutions, philosophy, and ideology mainly focus on:

Accepted Answer

A)  unemployment and inflation. 
B)  the ownership of factors of production and how they are coordinated in economic activity. 
C)  the relative shares of agriculture, industry, and service sectors. 
D)  the opportunity for social mobility. 
A)  unemployment and inflation. 
B)  the ownership of factors of production and how they are coordinated in economic activity. 
C)  the relative shares of agriculture, industry, and service sectors. 
D)  the opportunity for social mobility.

Question 15

Use the following to answer question(s): 
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 16

Countries import some goods and export other goods primarily because of:

Accepted Answer

A)  unemployment. 
B)  self-sufficiency. 
C)  comparative advantage. 
D)  the law of increasing opportunity cost. 
A)  unemployment. 
B)  self-sufficiency. 
C)  comparative advantage. 
D)  the law of increasing opportunity cost.

Question 17

The cost of the Great Depression between 1929 and 1942 was a loss of:

Accepted Answer

A)  more than the United States ultimately spent on World War II. 
B)  over $15 trillion in today's dollars. 
C)  the output that otherwise would have been produced by the 50 percent of the nation's workers who had lost their jobs. 
D)  both B and C are true. 
A)  more than the United States ultimately spent on World War II. 
B)  over $15 trillion in today's dollars. 
C)  the output that otherwise would have been produced by the 50 percent of the nation's workers who had lost their jobs. 
D)  both B and C are true.

Question 18

The process through which an economy's production possibilities curve is shifted outward is:

Accepted Answer

A)  comparative advantage. 
B)  economic growth. 
C)  full employment. 
D)  specialization. 
A)  comparative advantage. 
B)  economic growth. 
C)  full employment. 
D)  specialization.

Question 19

If an economy's factors of production were owned by the government sector and the coordinating activity was done by a government planning board, the economy would be called:

Accepted Answer

A)  capitalism. 
B)  market capitalism. 
C)  command socialism. 
D)  mixed capitalism. 
A)  capitalism. 
B)  market capitalism. 
C)  command socialism. 
D)  mixed capitalism.

Question 20

Use the following to answer question(s): 
Exhibit: Guns and Butter
  
-(Exhibit: Guns and Butter) If the economy were producing 8 units of guns and 12 units of butter per period:

Accepted Answer

A)  this is a possible choice, but would involve unemployment and/or inefficiency. 
B)  the notion of increasing opportunity cost is invalidated. 
C)  the economy is still efficient but has made a decision not to buy as much as it could. 
D)  something must be done to reduce the amount of employment. 
A)  this is a possible choice, but would involve unemployment and/or inefficiency. 
B)  the notion of increasing opportunity cost is invalidated. 
C)  the economy is still efficient but has made a decision not to buy as much as it could. 
D)  something must be done to reduce the amount of employment.

Increases in resources or improvements in technology will tend to cause a society's production possibilities curve to:

In the 1980s, the federal government undertook a major build-up of the military sector, leading to reports that prices charged by military contractors were spiraling upward. According to production possibilities analysis, this result is not surprising due to:

Efficient production exists when the economy is:

A factor of production that is produced in order to produce something else is called:

In drawing a production possibilities curve, it is assumed that:

Money is a factor of production because it is part of capital.

Production possibilities curves are bowed out away from the origin. Explain why. Can you think of a situation in which the production possibilities curve is a straight line and has a constant slope?

The best example of a command socialist economy is:

Factors of production are:

Use the following to answer question(s): Exhibit: Consumer and Capital Goods -(Exhibit: Consumer and Capital Goods) If the economy is operating at point Y on currently relevant Curve 1, this means that:

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

Knowledge that can be applied to the production of goods and services is:

Use the following to answer question(s): Exhibit: Production Possibilities Curve 2 -(Exhibit: Production Possibilities Curve 2) The economy will experience its least growth by operating at point:

The basic economic differences among nations throughout history concerning institutions, philosophy, and ideology mainly focus on:

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

Countries import some goods and export other goods primarily because of:

The cost of the Great Depression between 1929 and 1942 was a loss of:

The process through which an economy's production possibilities curve is shifted outward is:

If an economy's factors of production were owned by the government sector and the coordinating activity was done by a government planning board, the economy would be called:

Use the following to answer question(s): Exhibit: Guns and Butter -(Exhibit: Guns and Butter) If the economy were producing 8 units of guns and 12 units of butter per period:

Economics: The Study of Choice

Demand and Supply

Applications of Supply and Demand

Elasticity: a Measure of Response

Markets, Maximizers, and Efficiency

The Analysis of Consumer Choice

Production and Cost

Competitive Markets for Goods and Services

Monopoly

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

Antitrust Policy and Business Regulation

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Filters

Exam 2: Confronting Scarcity: Choices in Production

Increases in resources or improvements in technology will tend to cause a society's production possibilities curve to:

In the 1980s, the federal government undertook a major build-up of the military sector, leading to reports that prices charged by military contractors were spiraling upward. According to production possibilities analysis, this result is not surprising due to:

Efficient production exists when the economy is:

A factor of production that is produced in order to produce something else is called:

In drawing a production possibilities curve, it is assumed that:

Money is a factor of production because it is part of capital.

Production possibilities curves are bowed out away from the origin. Explain why. Can you think of a situation in which the production possibilities curve is a straight line and has a constant slope?

The best example of a command socialist economy is:

Factors of production are:

Use the following to answer question(s): Exhibit: Consumer and Capital Goods -(Exhibit: Consumer and Capital Goods) If the economy is operating at point Y on currently relevant Curve 1, this means that:

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

Knowledge that can be applied to the production of goods and services is:

Use the following to answer question(s): Exhibit: Production Possibilities Curve 2 -(Exhibit: Production Possibilities Curve 2) The economy will experience its least growth by operating at point:

The basic economic differences among nations throughout history concerning institutions, philosophy, and ideology mainly focus on:

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

Countries import some goods and export other goods primarily because of:

The cost of the Great Depression between 1929 and 1942 was a loss of:

The process through which an economy's production possibilities curve is shifted outward is:

If an economy's factors of production were owned by the government sector and the coordinating activity was done by a government planning board, the economy would be called:

Use the following to answer question(s): Exhibit: Guns and Butter -(Exhibit: Guns and Butter) If the economy were producing 8 units of guns and 12 units of butter per period:

Economics: The Study of Choice

Demand and Supply

Applications of Supply and Demand

Elasticity: a Measure of Response

Markets, Maximizers, and Efficiency

The Analysis of Consumer Choice

Production and Cost

Competitive Markets for Goods and Services

Monopoly

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

Antitrust Policy and Business Regulation

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Filters