Question 1

A poker player wins some cash.Which use of the money would most naturally be considered an investment?

Accepted Answer

A)  buying a round of drinks for everyone at a bar 
B)  using the money to play more poker 
C)  paying off debts owed to bookies 
D)  shopping for groceries 
E)  buying a book of tips for poker players 
A)  buying a round of drinks for everyone at a bar 
B)  using the money to play more poker 
C)  paying off debts owed to bookies 
D)  shopping for groceries 
E)  buying a book of tips for poker players

Question 2

Which of the following would NOT lead to an outward shift of a future production possibilities frontier (PPF)?

Accepted Answer

A)  population growth 
B)  increased investment today 
C)  an increase in technology 
D)  the discovery of new resources 
E)  a decline in life expectancy 
A)  population growth 
B)  increased investment today 
C)  an increase in technology 
D)  the discovery of new resources 
E)  a decline in life expectancy

Question 3

The figure depicts a shift in a society's production possibilities frontier (PPF)for the manufacture of trains and planes: train-manufacturing capacity expands while plane-manufacturing capacity shrinks. Refer to this figure to answer the following questions.
 
-Which point represents an output that was efficient before the shift but is inefficient afterward?

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 4

Which statement best describes absolute advantage?

Accepted Answer

A)  DiNozzo has an absolute advantage in the production of wooden boats. 
B)  DiNozzo has an absolute advantage in both. 
C)  Gibbs has an absolute advantage in solving crimes,whereas DiNozzo has an absolute advantage in making wooden boats. 
D)  Gibbs has an absolute advantage in both. 
E)  Gibbs has an absolute advantage in making wooden boats,whereas DiNozzo has an absolute advantage in solving crimes. 
A)  DiNozzo has an absolute advantage in the production of wooden boats. 
B)  DiNozzo has an absolute advantage in both. 
C)  Gibbs has an absolute advantage in solving crimes,whereas DiNozzo has an absolute advantage in making wooden boats. 
D)  Gibbs has an absolute advantage in both. 
E)  Gibbs has an absolute advantage in making wooden boats,whereas DiNozzo has an absolute advantage in solving crimes.

Question 5

Mikhail and Stefan 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 following questions.
  
-What is Stefan'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 6

Consider the production possibilities frontier (PPF)shown in the figure below to answer the following questions. use the figure above to answer the following questions : 
  
-The set of efficient points is best described as

Accepted Answer

A)  only area O: points outside the PPF. 
B)  points on the PPF only. 
C)  only area I: points inside the PPF. 
D)  area I: inside the PPF and points on the PPF. 
E)  area O: outside the PPF and points on the PPF. 
A)  only area O: points outside the PPF. 
B)  points on the PPF only. 
C)  only area I: points inside the PPF. 
D)  area I: inside the PPF and points on the PPF. 
E)  area O: outside the PPF and points on the PPF.

Question 7

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 8

Car companies build wind tunnels to test the aerodynamics and the handling capabilities of their car designs.The many variables that can be precisely controlled inside the wind tunnel are considered ________ factors.

Accepted Answer

A)  normative 
B)  positive 
C)  comparative 
D)  endogenous 
E)  exogenous 
A)  normative 
B)  positive 
C)  comparative 
D)  endogenous 
E)  exogenous

Question 9

To determine which of two producers has a comparative advantage,one would need to know their

Accepted Answer

A)  increasing relative costs. 
B)  opportunity costs of production for both goods. 
C)  normative beliefs. 
D)  zero-sum games. 
E)  levels of investment. 
A)  increasing relative costs. 
B)  opportunity costs of production for both goods. 
C)  normative beliefs. 
D)  zero-sum games. 
E)  levels of investment.

Question 10

Economists use the scientific method and the tools of economics to study

Accepted Answer

A)  only the decisions of individuals. 
B)  only the decisions of business firms. 
C)  only economic growth and gross domestic product (GDP). 
D)  only the production possibilities curve. 
E)  anything around them; the world is the economist's laboratory. 
A)  only the decisions of individuals. 
B)  only the decisions of business firms. 
C)  only economic growth and gross domestic product (GDP). 
D)  only the production possibilities curve. 
E)  anything around them; the world is the economist's laboratory.

Question 11

use the figures below  to answer the following questions : the production possibilities frontier (PPF)curves,which compare the ancient production of agricultural products to art and literature
A.   B.   C.   D.   E.  
-Suppose the plow is invented and agricultural productivity greatly increases.Which of the following graphs best depicts how this would affect the PPF?

Accepted Answer

A)  Graph A 
B)  Graph B 
C)  Graph C 
D)  Graph D 
E)  Graph E 
A)  Graph A 
B)  Graph B 
C)  Graph C 
D)  Graph D 
E)  Graph E

Question 12

Consider the production possibilities frontier (PPF)shown in the figure below to answer the following questions. use the figure above to answer the following questions : 
  
-Given current resources and technology,the unattainable range is best described as

Accepted Answer

A)  only area O: points outside the PPF. 
B)  points on the PPF only. 
C)  only area I: points inside the PPF. 
D)  area I: inside the PPF and points on the PPF. 
E)  area O: outside the PPF and points on the PPF. 
A)  only area O: points outside the PPF. 
B)  points on the PPF only. 
C)  only area I: points inside the PPF. 
D)  area I: inside the PPF and points on the PPF. 
E)  area O: outside the PPF and points on the PPF.

Question 13

Nadine is considering the "dress well,test well" theory,which argues that one performs better on exams when one dresses nicer than one does when wearing sweatpants.If Nadine wants to test this theory over the course of the semester,which of the following would be an endogenous factor in her experiment?

Accepted Answer

A)  her innate ability in the subject 
B)  the difficulty of the exam 
C)  the relative mix of multiple-choice and short-answer questions 
D)  her clothing choice for the exam 
E)  the amount of time Nadine spends studying for the exam 
A)  her innate ability in the subject 
B)  the difficulty of the exam 
C)  the relative mix of multiple-choice and short-answer questions 
D)  her clothing choice for the exam 
E)  the amount of time Nadine spends studying for the exam

Question 14

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 15

If Bo and Kenzi were to specialize and trade,at what exchange rate would they find some quantity of trade to be mutually beneficial?

Accepted Answer

A)  3 pizzas for 1 stromboli 
B)  1 pizza for 1 stromboli 
C)  10 pizzas for 2 stromboli 
D)  1 pizza for 1/2 stromboli 
E)  1 pizza for 1/4 stromboli 
A)  3 pizzas for 1 stromboli 
B)  1 pizza for 1 stromboli 
C)  10 pizzas for 2 stromboli 
D)  1 pizza for 1/2 stromboli 
E)  1 pizza for 1/4 stromboli

Question 16

use the figure below  to answer the following questions : the accompanying figure  
  
-How is opportunity cost illustrated?

Accepted Answer

A)  a move from point A to point B 
B)  a move from point A to point C 
C)  a move from point C to point D 
D)  a move from point B to point C 
E)  a move from point D to point E 
A)  a move from point A to point B 
B)  a move from point A to point C 
C)  a move from point C to point D 
D)  a move from point B to point C 
E)  a move from point D to point E

Question 17

What assumptions do economists make when developing a production possibilities frontier (PPF)?

Accepted Answer

To simplify the complexity of the real w

Question 18

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 19

Consider the following scenario to answer the following questions: Kukla makes tables,with an opportunity cost of 3 rugs per every 4 tables.Zola makes rugs,with an opportunity cost of 2 tables per every 3 rugs.
-Ollie proposes that Kukla give Zola 2 tables in exchange for 1 rug.What are Kukla's and Zola's reactions?

Accepted Answer

A)  Kukla likes the proposal,but Zola does not. 
B)  Zola likes the proposal,but Kukla does not. 
C)  Kukla and Zola both like the proposal. 
D)  Neither Kukla nor Zola likes the proposal. 
E)  Ollie's proposal is not feasible. 
A)  Kukla likes the proposal,but Zola does not. 
B)  Zola likes the proposal,but Kukla does not. 
C)  Kukla and Zola both like the proposal. 
D)  Neither Kukla nor Zola likes the proposal. 
E)  Ollie's proposal is not feasible.

Question 20

Why is the concept of ceteris paribus important for model building?

Accepted Answer

Ceteris paribus means "other things bein

A poker player wins some cash.Which use of the money would most naturally be considered an investment?

Which of the following would NOT lead to an outward shift of a future production possibilities frontier (PPF)?

Which statement best describes absolute advantage?

Mikhail and Stefan 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 following questions. -What is Stefan's opportunity cost of a painting?

Consider the production possibilities frontier (PPF)shown in the figure below to answer the following questions. use the figure above to answer the following questions : -The set of efficient points is best described as

Economic growth can be depicted on a production possibilities frontier (PPF)as an

Car companies build wind tunnels to test the aerodynamics and the handling capabilities of their car designs.The many variables that can be precisely controlled inside the wind tunnel are considered ________ factors.

To determine which of two producers has a comparative advantage,one would need to know their

Economists use the scientific method and the tools of economics to study

Consider the production possibilities frontier (PPF)shown in the figure below to answer the following questions. use the figure above to answer the following questions : -Given current resources and technology,the unattainable range is best described as

A model without any simplifying assumptions

If Bo and Kenzi were to specialize and trade,at what exchange rate would they find some quantity of trade to be mutually beneficial?

use the figure below to answer the following questions : the accompanying figure -How is opportunity cost illustrated?

What assumptions do economists make when developing a production possibilities frontier (PPF)?

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

Why is the concept of ceteris paribus important for model building?

Five Foundations of Economics

The Market at Work: Supply and Demand

Elasticity

Market Outcomes and Tax Incidence

Price Controls

Market Inefficiencies: Externalities and Public Goods

Business Costs and Production

Firms in a Competitive Market

Understanding Monopoly

Price Discrimination

Monopolistic Competition and Advertising

Oligopoly and Strategic Behavior

The Demand and Supply of Resources

Income,inequality,and Poverty

Consumer Choice

Behavioral Economics and Risk Taking

Health Insurance and Health Care

International Trade

Filters

Exam 2: Model Building and Gains From Trade

A poker player wins some cash.Which use of the money would most naturally be considered an investment?

Which of the following would NOT lead to an outward shift of a future production possibilities frontier (PPF)?

Which statement best describes absolute advantage?

Mikhail and Stefan 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 following questions. -What is Stefan's opportunity cost of a painting?

Consider the production possibilities frontier (PPF)shown in the figure below to answer the following questions. use the figure above to answer the following questions : -The set of efficient points is best described as

Economic growth can be depicted on a production possibilities frontier (PPF)as an

Car companies build wind tunnels to test the aerodynamics and the handling capabilities of their car designs.The many variables that can be precisely controlled inside the wind tunnel are considered ________ factors.

To determine which of two producers has a comparative advantage,one would need to know their

Economists use the scientific method and the tools of economics to study

Consider the production possibilities frontier (PPF)shown in the figure below to answer the following questions. use the figure above to answer the following questions : -Given current resources and technology,the unattainable range is best described as

A model without any simplifying assumptions

If Bo and Kenzi were to specialize and trade,at what exchange rate would they find some quantity of trade to be mutually beneficial?

use the figure below to answer the following questions : the accompanying figure -How is opportunity cost illustrated?

What assumptions do economists make when developing a production possibilities frontier (PPF)?

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

Why is the concept of ceteris paribus important for model building?

Five Foundations of Economics

The Market at Work: Supply and Demand

Elasticity

Market Outcomes and Tax Incidence

Price Controls

Market Inefficiencies: Externalities and Public Goods

Business Costs and Production

Firms in a Competitive Market

Understanding Monopoly

Price Discrimination

Monopolistic Competition and Advertising

Oligopoly and Strategic Behavior

The Demand and Supply of Resources

Income,inequality,and Poverty

Consumer Choice

Behavioral Economics and Risk Taking

Health Insurance and Health Care

International Trade

Filters