Question 1

-If the economy were producing at point E and moved to point B the opportunity cost in terms of lost production of outboard motors would be

Accepted Answer

A) 16 units of outboard motors. 
B) 14 units of outboard motors. 
C) 12 units of outboard motors. 
D) 10 units of outboard motors. 
A) 16 units of outboard motors. 
B) 14 units of outboard motors. 
C) 12 units of outboard motors. 
D) 10 units of outboard motors.

Question 2

During the Great Depression,our economy operated ______________ the production possibilities frontier.

Accepted Answer

The answer of During the Great Depression,our economy operated ______________...

Question 3

Statement I: Institutional constraints such as "blue laws" or child labor laws put restrictions on our capacity to produce and thus limit our production possibilities curve.
Statement II: We would be operating at full employment with an unemployment rate of five percent and a capacity utilization rate of 85 percent.

Accepted Answer

A) Statement I is true and statement II is false. 
B) Statement II is true and statement I is false. 
C) Both statements are true. 
D) Both statements are false. 
A) Statement I is true and statement II is false. 
B) Statement II is true and statement I is false. 
C) Both statements are true. 
D) Both statements are false.

Question 4

Assuming that a society always operates on its production possibilities curve,an outward shift of the curve implies

Accepted Answer

A) economic growth has occurred. 
B) the society is making more efficient use of its available resources. 
C) consumer demand has increased. 
D) the present value of capital resources has increaseD. 
A) economic growth has occurred. 
B) the society is making more efficient use of its available resources. 
C) consumer demand has increased. 
D) the present value of capital resources has increaseD.

Question 5

-A country producing a combination of 9 units of guns and 6 units of butter would be _____________ (outside/on/inside)the production possibilities curve.

Accepted Answer

The answer of  
-A country producing a combination of...

Question 6

-What is the opportunity cost of going from point C to point D?

Accepted Answer

The answer of  
-What is the opportunity cost of...

Question 7

-Place point Y on the graph to indicate a deep depression.

Accepted Answer

The answer of  
-Place point Y on the graph...

Question 8

-In 1939 the U.S.economy was operating at point _______.

Accepted Answer

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

Question 9

The Other America,which challenged the notion that we had conquered poverty,was written by __________.

Accepted Answer

The answer of The Other America,which challenged the notion that...

Question 10

Referring to a production possibilities curve and the goods being compared,depict the economic event.Suppose the United States was at full employment in 2003 just before invading Iraq.Although the war was won quickly,winning the peace took a decade (guns vs.butter).

Accepted Answer

A) A movement from a point inside the curve to a point on or near the curve 
B) A movement from a point on or near the curve to a point inside the curve 
C) A shift in the entire curve to the right (outward) 
D) A shift in the entire curve to the left (inward) 
E) A movement along the curve 
A) A movement from a point inside the curve to a point on or near the curve 
B) A movement from a point on or near the curve to a point inside the curve 
C) A shift in the entire curve to the right (outward) 
D) A shift in the entire curve to the left (inward) 
E) A movement along the curve

Question 11

An economy operating its plant and equipment at full capacity implies a capacity utilization rate of

Accepted Answer

A) 40 percent. 
B) 70 percent. 
C) 85 percent. 
D) 100 percent. 
A) 40 percent. 
B) 70 percent. 
C) 85 percent. 
D) 100 percent.

Question 12

Which of the following will shift an economy's production possibilities curve outward?

Accepted Answer

A) An improvement in technology 
B) An increase in the unemployment rate 
C) A decrease in land,labor or capital 
D) A decrease in the unemployment rate 
A) An improvement in technology 
B) An increase in the unemployment rate 
C) A decrease in land,labor or capital 
D) A decrease in the unemployment rate

Question 13

According to the law of increasing costs,as the United States expends more of its resources on reducing air pollution,

Accepted Answer

A) the quantity of other goods that must be given up for further reductions in air pollution will decrease. 
B) the quantity of other goods that must be given up for further reductions in air pollution will increase. 
C) the social cost of additional air pollution will increase. 
D) there will be no change in the marginal cost of reducing air pollution. 
A) the quantity of other goods that must be given up for further reductions in air pollution will decrease. 
B) the quantity of other goods that must be given up for further reductions in air pollution will increase. 
C) the social cost of additional air pollution will increase. 
D) there will be no change in the marginal cost of reducing air pollution.

Question 14

The law of increasing costs is based on each of the following,except

Accepted Answer

A) the law of scarcity. 
B) the law of diminishing returns. 
C) diseconomies of scale. 
D) factor suitability. 
A) the law of scarcity. 
B) the law of diminishing returns. 
C) diseconomies of scale. 
D) factor suitability.

Question 15

Assuming the inner curve is our current production possibilities frontier,which of the following points would eventually lead to the greatest level of economic growth?

Accepted Answer

A) Point J 
B) Point N 
C) Point K 
D) Point P 
A) Point J 
B) Point N 
C) Point K 
D) Point P

Question 16

Hypothetical Production Schedule for a Two-Product Economy $\begin{array}{ccc}
&Units~ of&Units~ of\
\text { Points } & \text { Consumer Goods } & \text { Capital Goods } \
\hline \text { A } & 0 & 20 \
\text { B } & 40 & 16 \
\text { C } & 72 & 12 \
\text { D } & 96 & 8 \
\text { E } & 112 & 4 \
\text { F } & 120 & 0
\end{array}$
-If the economy were producing at point C and moves to point B

Accepted Answer

A) 4 units of capital goods are gained,while the capacity to produce 32 consumer goods are lost. 
B) 16 units of capital goods are gained at an opportunity cost of producing 40 consumer goods. 
C) 16 units of capital goods are gained at an opportunity cost of producing 72 consumer goods. 
D) 4 units of capital goods are gained,while the capacity to produce 72 consumer goods are lost. 
A) 4 units of capital goods are gained,while the capacity to produce 32 consumer goods are lost. 
B) 16 units of capital goods are gained at an opportunity cost of producing 40 consumer goods. 
C) 16 units of capital goods are gained at an opportunity cost of producing 72 consumer goods. 
D) 4 units of capital goods are gained,while the capacity to produce 72 consumer goods are lost.

Question 17

Referring to a production possibilities curve and the goods being compared,depict the economic event.Millions of immigrants came to the United States in the second half of the 19th century to work on the transcontinental railroad (capital goods vs.consumer goods).

Accepted Answer

A) A movement from a point inside the curve to a point on or near the curve 
B) A movement from a point on or near the curve to a point inside the curve 
C) A shift in the entire curve to the right (outward) 
D) A shift in the entire curve to the left (inward) 
E) A movement along the curve 
A) A movement from a point inside the curve to a point on or near the curve 
B) A movement from a point on or near the curve to a point inside the curve 
C) A shift in the entire curve to the right (outward) 
D) A shift in the entire curve to the left (inward) 
E) A movement along the curve

Question 18

-If the economy were at full employment and now producing at point Y,

Accepted Answer

A) the unemployment rate would increase. 
B) the unemployment rate would decrease. 
C) the production possibilities frontier would have shifted inward. 
D) the production possibilities frontier would have shifted outwarD. 
E) there would be a movement along the frontier. 
A) the unemployment rate would increase. 
B) the unemployment rate would decrease. 
C) the production possibilities frontier would have shifted inward. 
D) the production possibilities frontier would have shifted outwarD. 
E) there would be a movement along the frontier.

Question 19

Hypothetical Production Schedule for a Two-Product Economy $\begin{array}{ccc}
&Units~ of&Units~ of\
\text { Points } & \text { Consumer Goods } & \text { Capital Goods } \
\hline \text { A } & 0 & 20 \
\text { B } & 40 & 16 \
\text { C } & 72 & 12 \
\text { D } & 96 & 8 \
\text { E } & 112 & 4 \
\text { F } & 120 & 0
\end{array}$
-If the economy were producing at point E and moves to point D,

Accepted Answer

A) resources will shift from producing capital goods to producing consumer goods. 
B) resources will shift from producing consumer goods to producing capital goods. 
C) more capital goods can be produced without any sacrifice in consumer goods production. 
D) more consumer goods can be produced without any sacrifice in capital goods production. 
A) resources will shift from producing capital goods to producing consumer goods. 
B) resources will shift from producing consumer goods to producing capital goods. 
C) more capital goods can be produced without any sacrifice in consumer goods production. 
D) more consumer goods can be produced without any sacrifice in capital goods production.

Question 20

If our economy is operating at peak efficiency,it is on its __________________________.

Accepted Answer

production

Exam 2: Resource Utilization

-If the economy were producing at point E and moved to point B the opportunity cost in terms of lost production of outboard motors would be

During the Great Depression,our economy operated ______________ the production possibilities frontier.

Assuming that a society always operates on its production possibilities curve,an outward shift of the curve implies

-A country producing a combination of 9 units of guns and 6 units of butter would be _____________ (outside/on/inside)the production possibilities curve.

-What is the opportunity cost of going from point C to point D?

-Place point Y on the graph to indicate a deep depression.

-In 1939 the U.S.economy was operating at point _______.

The Other America,which challenged the notion that we had conquered poverty,was written by __________.

Referring to a production possibilities curve and the goods being compared,depict the economic event.Suppose the United States was at full employment in 2003 just before invading Iraq.Although the war was won quickly,winning the peace took a decade (guns vs.butter).

An economy operating its plant and equipment at full capacity implies a capacity utilization rate of

Which of the following will shift an economy's production possibilities curve outward?

According to the law of increasing costs,as the United States expends more of its resources on reducing air pollution,

The law of increasing costs is based on each of the following,except

Assuming the inner curve is our current production possibilities frontier,which of the following points would eventually lead to the greatest level of economic growth?

Hypothetical Production Schedule for a Two-Product Economy Units\nobreakspaceof Units\nobreakspaceof Points Consumer Goods Capital Goods A 0 20 B 40 16 C 72 12 D 96 8 E 112 4 F 120 0 -If the economy were producing at point C and moves to point B

Referring to a production possibilities curve and the goods being compared,depict the economic event.Millions of immigrants came to the United States in the second half of the 19th century to work on the transcontinental railroad (capital goods vs.consumer goods).

-If the economy were at full employment and now producing at point Y,

Hypothetical Production Schedule for a Two-Product Economy Units\nobreakspaceof Units\nobreakspaceof Points Consumer Goods Capital Goods A 0 20 B 40 16 C 72 12 D 96 8 E 112 4 F 120 0 -If the economy were producing at point E and moves to point D,

If our economy is operating at peak efficiency,it is on its __________________________.

A Brief Economic History of the United States

The Mixed Economy

Supply and Demand

The Household Consumption Sector

The Business Investment Sector

The Government Sector

The Export-Import Sector

Gross Domestic Product

Economic Fluctuations, unemployment, and Inflation

Classical and Keynesian Economics

Fiscal Policy and the National Debt

Money and Banking

The Federal Reserve and Monetary Policy

A Century of Economic Theory

Economic Growth and Productivity

Demand,supply,and Equilibrium

The Price Elasticities of Demand and Supply

Theory of Consumer Behavior

Cost

Profit, loss, and Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Corporate Mergers and Antitrust

Demand in the Factor Market

Labor Unions

Labor Markets and Wage Rates

Rent, interest, and Profit

Income Distribution and Poverty

International Trade

International Finance

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