Question 1

Use the following to answer question(s): 
Exhibit: Guns and Butter
  
-(Exhibit: Guns and Butter) The combination of guns and butter at point H:

Accepted Answer

A)  can be obtained, but would cost too much. 
B)  cannot be attained given the level of technology and the factors of production available. 
C)  has no meaning since it does not relate to the 
A)  can be obtained, but would cost too much. 
B)  cannot be attained given the level of technology and the factors of production available. 
C)  has no meaning since it does not relate to the

Question 2

A person who seeks to earn profits by finding ways to organize factors of production is called a(n):

Accepted Answer

A)  foreman 
B)  finance capitalist. 
C)  entrepreneur. 
D)  manager. 
A)  foreman 
B)  finance capitalist. 
C)  entrepreneur. 
D)  manager.

Question 3

Two components of labor are:

Accepted Answer

A)  residential location and education. 
B)  natural ability and human capital. 
C)  money and financial wealth. 
D)  ingenuity and job-specific machinery. 
A)  residential location and education. 
B)  natural ability and human capital. 
C)  money and financial wealth. 
D)  ingenuity and job-specific machinery.

Question 4

Use the following to answer question(s): 
Exhibit: Sugar and Freight Trains
  
-(Exhibit: Sugar and Freight Trains) The downward slope of the production possibilities curve implies:

Accepted Answer

A)  resources in the economy are scarce. 
B)  the economy must be controlled by the government. 
C)  sugar is more important than freight trains. 
D)  the economy produces more sugar than freight trains. 
A)  resources in the economy are scarce. 
B)  the economy must be controlled by the government. 
C)  sugar is more important than freight trains. 
D)  the economy produces more sugar than freight trains.

Question 5

When moving along a production possibilities curve, the opportunity cost to society of getting more of the good on the horizontal axis:

Accepted Answer

A)  is constant. 
B)  is measured in dollar terms. 
C)  is measured by the amount of the other good that must be given up. 
D)  usually decreases. 
A)  is constant. 
B)  is measured in dollar terms. 
C)  is measured by the amount of the other good that must be given up. 
D)  usually decreases.

Question 6

Any factor of production is capital if it:

Accepted Answer

A)  was produced and can be used to produce other goods and services. 
B)  generates utility. 
C)  uses human effort to produce goods and services. 
D)  is included in financial capital. 
A)  was produced and can be used to produce other goods and services. 
B)  generates utility. 
C)  uses human effort to produce goods and services. 
D)  is included in financial capital.

Question 7

Discuss and explain the difference between a market capitalist and a command socialist economy.

Accepted Answer

Market capitalism and command socialism

Question 8

When making a choice to do more of one activity, the highest-valued other choice society does not make is called _______ , and it is measured _______ .

Accepted Answer

A)  opportunity cost; in terms of the money it costs 
B)  increasing cost; in terms of the amount of money spent doing so 
C)  constant cost; by the slope of the production possibilities curve at that level 
D)  opportunity cost; by the slope of the production possibilities curve at that level 
A)  opportunity cost; in terms of the money it costs 
B)  increasing cost; in terms of the amount of money spent doing so 
C)  constant cost; by the slope of the production possibilities curve at that level 
D)  opportunity cost; by the slope of the production possibilities curve at that level

Question 9

By specializing in the production of particular goods, a nation is:

Accepted Answer

A)  less likely to make efficient use of available resources. 
B)  more likely to engage in international trade. 
C)  able to become self-sufficient. 
D)  unable to develop a comparative advantage. 
A)  less likely to make efficient use of available resources. 
B)  more likely to engage in international trade. 
C)  able to become self-sufficient. 
D)  unable to develop a comparative advantage.

Question 10

If the production possibilities curve were a straight line sloping down from left to right, this would suggest that:

Accepted Answer

A)  more of both goods could be produced moving along the curve. 
B)  the two products must have the same price. 
C)  no factor of production has any particular comparative advantage over other resources. 
D)  the utility of the two goods must be equal to consumers. 
A)  more of both goods could be produced moving along the curve. 
B)  the two products must have the same price. 
C)  no factor of production has any particular comparative advantage over other resources. 
D)  the utility of the two goods must be equal to consumers.

Question 11

The role of government in shifting the production possibilities curve to the right is considered:

Accepted Answer

A)  supporting economic growth. 
B)  redistributing income. 
C)  providing certain goods and services. 
D)  enforcing private property rights. 
A)  supporting economic growth. 
B)  redistributing income. 
C)  providing certain goods and services. 
D)  enforcing private property rights.

Question 12

Society's production possibilities curve is primarily concerned with answering the economic question of what goods and services a society can produce.

Accepted Answer

A) True 
 B)False

Question 13

The model that shows the goods and services the economy is capable of producing is the model of:

Accepted Answer

A)  utility. 
B)  the fallacy of composition. 
C)  production possibilities. 
D)  scarcity. 
A)  utility. 
B)  the fallacy of composition. 
C)  production possibilities. 
D)  scarcity.

Question 14

The textbook classifies technology as _______ and entrepreneurs as _______ .

Accepted Answer

A)  knowledge; persons who seek profit by finding new ways to organize factors of production 
B)  capital; labor 
C)  labor skills; capital 
D)  a factor of production; a factor of production 
A)  knowledge; persons who seek profit by finding new ways to organize factors of production 
B)  capital; labor 
C)  labor skills; capital 
D)  a factor of production; a factor of production

Question 15

The production possibilities curve shows various combinations of two products that an economy can produce when there is full employment and economic efficiency.

Accepted Answer

A) True 
 B)False

Question 16

The best example of a market capitalist economy is:

Accepted Answer

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

Question 17

Use the following to answer question(s): 
Exhibit: Sugar and Freight Trains
  
-(Exhibit: Sugar and Freight Trains) Suppose the economy is producing 180 tons of sugar and 2 freight trains. This implies that:

Accepted Answer

A)  the economy is operating at full employment. 
B)  the economy is operating efficiently. 
C)  the economy is not producing as much as it could. 
D)  economic growth would help the economy move to its production possibilities curve. 
A)  the economy is operating at full employment. 
B)  the economy is operating efficiently. 
C)  the economy is not producing as much as it could. 
D)  economic growth would help the economy move to its production possibilities curve.

Question 18

Use the following to answer question(s): 
Exhibit: Bicycles and Radishes 1
  
-(Exhibit: Bicycles and Radishes 1) The exhibit shows production possibilities curves for two countries that produce only radishes and bicycles. The axes of both graphs are measured in equivalent units. Country A is now operating at point M, and Country B is now operating at point N. The opportunity cost of producing an additional ton of radishes would be greater in:

Accepted Answer

A)  Country A. 
B)  Country B. 
C)  neither; the opportunity cost would be the same in both countries. 
D)  there is not enough information given to answer the question. 
A)  Country A. 
B)  Country B. 
C)  neither; the opportunity cost would be the same in both countries. 
D)  there is not enough information given to answer the question.

Question 19

The law of increasing opportunity cost is associated with the slope of the:

Accepted Answer

A)  demand curve. 
B)  supply curve. 
C)  output curve. 
D)  production possibilities curve. 
A)  demand curve. 
B)  supply curve. 
C)  output curve. 
D)  production possibilities curve.

Question 20

Money is considered to be a factor of production.

Accepted Answer

A) True 
 B)False

Use the following to answer question(s): Exhibit: Guns and Butter -(Exhibit: Guns and Butter) The combination of guns and butter at point H:

A person who seeks to earn profits by finding ways to organize factors of production is called a(n):

Two components of labor are:

Use the following to answer question(s): Exhibit: Sugar and Freight Trains -(Exhibit: Sugar and Freight Trains) The downward slope of the production possibilities curve implies:

When moving along a production possibilities curve, the opportunity cost to society of getting more of the good on the horizontal axis:

Any factor of production is capital if it:

Discuss and explain the difference between a market capitalist and a command socialist economy.

When making a choice to do more of one activity, the highest-valued other choice society does not make is called _ , and it is measured _ .

By specializing in the production of particular goods, a nation is:

If the production possibilities curve were a straight line sloping down from left to right, this would suggest that:

The role of government in shifting the production possibilities curve to the right is considered:

Society's production possibilities curve is primarily concerned with answering the economic question of what goods and services a society can produce.

The model that shows the goods and services the economy is capable of producing is the model of:

The textbook classifies technology as _ and entrepreneurs as _ .

The production possibilities curve shows various combinations of two products that an economy can produce when there is full employment and economic efficiency.

The best example of a market capitalist economy is:

Use the following to answer question(s): Exhibit: Sugar and Freight Trains -(Exhibit: Sugar and Freight Trains) Suppose the economy is producing 180 tons of sugar and 2 freight trains. This implies that:

The law of increasing opportunity cost is associated with the slope of the:

Money is considered to be a factor of production.

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

Use the following to answer question(s): Exhibit: Guns and Butter -(Exhibit: Guns and Butter) The combination of guns and butter at point H:

A person who seeks to earn profits by finding ways to organize factors of production is called a(n):

Two components of labor are:

Use the following to answer question(s): Exhibit: Sugar and Freight Trains -(Exhibit: Sugar and Freight Trains) The downward slope of the production possibilities curve implies:

When moving along a production possibilities curve, the opportunity cost to society of getting more of the good on the horizontal axis:

Any factor of production is capital if it:

Discuss and explain the difference between a market capitalist and a command socialist economy.

When making a choice to do more of one activity, the highest-valued other choice society does not make is called _______ , and it is measured _______ .

By specializing in the production of particular goods, a nation is:

If the production possibilities curve were a straight line sloping down from left to right, this would suggest that:

The role of government in shifting the production possibilities curve to the right is considered:

Society's production possibilities curve is primarily concerned with answering the economic question of what goods and services a society can produce.

The model that shows the goods and services the economy is capable of producing is the model of:

The textbook classifies technology as _______ and entrepreneurs as _______ .

The production possibilities curve shows various combinations of two products that an economy can produce when there is full employment and economic efficiency.

The best example of a market capitalist economy is:

Use the following to answer question(s): Exhibit: Sugar and Freight Trains -(Exhibit: Sugar and Freight Trains) Suppose the economy is producing 180 tons of sugar and 2 freight trains. This implies that:

The law of increasing opportunity cost is associated with the slope of the:

Money is considered to be a factor of production.

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

When making a choice to do more of one activity, the highest-valued other choice society does not make is called _ , and it is measured _ .

The textbook classifies technology as _ and entrepreneurs as _ .