Question 1

Labor is the _____ that can be applied to production.

Accepted Answer

A)  the natural environment. 
B)  produced resources. 
C)  financial assets. 
D)  human effort. 
A)  the natural environment. 
B)  produced resources. 
C)  financial assets. 
D)  human effort.

Question 2

A movement along the production possibilities curve would be a result of:

Accepted Answer

A)  unemployment. 
B)  inflation. 
C)  changes in prices. 
D)  changes in the combinations of the two goods produced. 
A)  unemployment. 
B)  inflation. 
C)  changes in prices. 
D)  changes in the combinations of the two goods produced.

Question 3

Government in the United States plays an unimportant role in the economy because the rules for the functioning of the private economy are inherent in the markets themselves.

Accepted Answer

A) True 
 B)False

Question 4

Government's role of protecting property rights is considered:

Accepted Answer

A)  enforcing a legal system. 
B)  providing certain goods and services. 
C)  redistributing income. 
D)  maintaining the money supply. 
A)  enforcing a legal system. 
B)  providing certain goods and services. 
C)  redistributing income. 
D)  maintaining the money supply.

Question 5

The slope of a production possibilities curve is based on opportunity cost.

Accepted Answer

A) True 
 B)False

Question 6

Improvements in technology provide benefits to:

Accepted Answer

A)  consumers, through lower prices. 
B)  workers, although some jobs may be eliminated. 
C)  firms, through lower production costs. 
D)  all of the above. 
A)  consumers, through lower prices. 
B)  workers, although some jobs may be eliminated. 
C)  firms, through lower production costs. 
D)  all of the above.

Question 7

Use the following to answer question(s): 
Exhibit: Production Possibilities Curve for Firms A and B
  
-(Exhibit: Production Possibilities Curve for Firms A and B. In Firm A, the opportunity cost of producing 1 more unit of X in terms of Y:

Accepted Answer

A)  is equal to the opportunity cost in Firm B of producing 1 more unit of X in terms of Y. 
B)  is less than the opportunity cost in Firm B of producing 1 more unit of X in terms of Y. 
C)  is greater than the opportunity cost in Firm B of producing 1 more unit of X in terms of Y. 
D)  cannot be determined. 
A)  is equal to the opportunity cost in Firm B of producing 1 more unit of X in terms of Y. 
B)  is less than the opportunity cost in Firm B of producing 1 more unit of X in terms of Y. 
C)  is greater than the opportunity cost in Firm B of producing 1 more unit of X in terms of Y. 
D)  cannot be determined.

Question 8

Comparative advantage leads to producing at a:

Accepted Answer

A)  higher opportunity cost. 
B)  lower opportunity cost. 
C)  higher dollar cost. 
D)  point where costs just begin to fall. 
A)  higher opportunity cost. 
B)  lower opportunity cost. 
C)  higher dollar cost. 
D)  point where costs just begin to fall.

Question 9

Which of the following is an example of capital?

Accepted Answer

A)  a gravel truck 
B)  a savings account 
C)  a share of General Motors stock 
D)  a lake 
A)  a gravel truck 
B)  a savings account 
C)  a share of General Motors stock 
D)  a lake

Question 10

The best example of an increase in capital is:

Accepted Answer

A)  The discovery of new oil reserves. 
B)  new computer software. 
C)  legal immigration of computer programmers. 
D)  conversion of military facilities to civilian uses. 
A)  The discovery of new oil reserves. 
B)  new computer software. 
C)  legal immigration of computer programmers. 
D)  conversion of military facilities to civilian uses.

Question 11

Economic resources used in the production process are called:

Accepted Answer

A)  free gifts of the natural environment. 
B)  factors of production. 
C)  consumer items. 
D)  money capital. 
A)  free gifts of the natural environment. 
B)  factors of production. 
C)  consumer items. 
D)  money capital.

Question 12

In a market capitalist economy:

Accepted Answer

A)  markets are not competitive. 
B)  individual ownership and decision making are relied upon. 
C)  consumers have few choices. 
D)  the government owns the factors of production. 
A)  markets are not competitive. 
B)  individual ownership and decision making are relied upon. 
C)  consumers have few choices. 
D)  the government owns the factors of production.

Question 13

In enforcing the legal system, the government in a market capitalist economy acts to:

Accepted Answer

A)  enforce contracts. 
B)  enforce property rights. 
C)  discourage fraud. 
D)  do all of the above. 
A)  enforce contracts. 
B)  enforce property rights. 
C)  discourage fraud. 
D)  do all of the above.

Question 14

Use the following to answer question(s): 
Exhibit: Production Possibilities Curve-Military and Civilian Goods
  
-(Exhibit: Production Possibilities Curve-Military and Civilian Goods) A movement from point G to point U could be a representation of what happened during:

Accepted Answer

A)  World War II. 
B)  the Great Depression. 
C)  the postwar expansion following World War II. 
D)  a period of rapid economic growth. 
A)  World War II. 
B)  the Great Depression. 
C)  the postwar expansion following World War II. 
D)  a period of rapid economic growth.

Question 15

International trade is possible in part through:

Accepted Answer

A)  inefficiently employing resources. 
B)  restricting the rate of growth of output. 
C)  generalization in the production of all goods. 
D)  specialization in the production of goods. 
A)  inefficiently employing resources. 
B)  restricting the rate of growth of output. 
C)  generalization in the production of all goods. 
D)  specialization in the production of goods.

Question 16

Discuss and explain the rationale underlying the law of increasing opportunity cost.

Accepted Answer

The law of increasing opportunity cost s

Question 17

The law of increasing opportunity cost results in a constant slope of the production possibilities curve.

Accepted Answer

A) True 
 B)False

Question 18

Specialization arises because

Accepted Answer

A)  some people don't like doing some tasks. 
B)  differences in the costs of production give some producers a comparative advantage in the production of particular goods or services. 
C)  the government directs resources into certain activities. 
D)  inefficient production forces producers to trade. 
A)  some people don't like doing some tasks. 
B)  differences in the costs of production give some producers a comparative advantage in the production of particular goods or services. 
C)  the government directs resources into certain activities. 
D)  inefficient production forces producers to trade.

Question 19

If all factors of production that are available for use under current market conditions are being utilized, then the economy has:

Accepted Answer

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

Question 20

Economists are generally in support of:

Accepted Answer

A)  government restrictions on trade. 
B)  free international trade. 
C)  tariffs to restrict trade. 
D)  subsidizing exports. 
A)  government restrictions on trade. 
B)  free international trade. 
C)  tariffs to restrict trade. 
D)  subsidizing exports.

Labor is the _____ that can be applied to production.

A movement along the production possibilities curve would be a result of:

Government in the United States plays an unimportant role in the economy because the rules for the functioning of the private economy are inherent in the markets themselves.

Government's role of protecting property rights is considered:

The slope of a production possibilities curve is based on opportunity cost.

Improvements in technology provide benefits to:

Use the following to answer question(s): Exhibit: Production Possibilities Curve for Firms A and B -(Exhibit: Production Possibilities Curve for Firms A and B. In Firm A, the opportunity cost of producing 1 more unit of X in terms of Y:

Comparative advantage leads to producing at a:

Which of the following is an example of capital?

The best example of an increase in capital is:

Economic resources used in the production process are called:

In a market capitalist economy:

In enforcing the legal system, the government in a market capitalist economy acts to:

Use the following to answer question(s): Exhibit: Production Possibilities Curve-Military and Civilian Goods -(Exhibit: Production Possibilities Curve-Military and Civilian Goods) A movement from point G to point U could be a representation of what happened during:

International trade is possible in part through:

Discuss and explain the rationale underlying the law of increasing opportunity cost.

The law of increasing opportunity cost results in a constant slope of the production possibilities curve.

Specialization arises because

If all factors of production that are available for use under current market conditions are being utilized, then the economy has:

Economists are generally in support of:

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

Labor is the _____ that can be applied to production.

A movement along the production possibilities curve would be a result of:

Government in the United States plays an unimportant role in the economy because the rules for the functioning of the private economy are inherent in the markets themselves.

Government's role of protecting property rights is considered:

The slope of a production possibilities curve is based on opportunity cost.

Improvements in technology provide benefits to:

Use the following to answer question(s): Exhibit: Production Possibilities Curve for Firms A and B -(Exhibit: Production Possibilities Curve for Firms A and B. In Firm A, the opportunity cost of producing 1 more unit of X in terms of Y:

Comparative advantage leads to producing at a:

Which of the following is an example of capital?

The best example of an increase in capital is:

Economic resources used in the production process are called:

In a market capitalist economy:

In enforcing the legal system, the government in a market capitalist economy acts to:

Use the following to answer question(s): Exhibit: Production Possibilities Curve-Military and Civilian Goods -(Exhibit: Production Possibilities Curve-Military and Civilian Goods) A movement from point G to point U could be a representation of what happened during:

International trade is possible in part through:

Discuss and explain the rationale underlying the law of increasing opportunity cost.

The law of increasing opportunity cost results in a constant slope of the production possibilities curve.

Specialization arises because

If all factors of production that are available for use under current market conditions are being utilized, then the economy has:

Economists are generally in support of:

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