Question 1

If the unemployment rate is 7 percent,our economy is operating

Accepted Answer

A) inside the production possibility curve. 
B) on the production possibility curve. 
C) outside the production possibility curve. 
A) inside the production possibility curve. 
B) on the production possibility curve. 
C) outside the production possibility curve.

Question 2

Every social system confronts scarcity and so must

Accepted Answer

A) produce only free goods. 
B) try to produce outside its production possibilities frontiers. 
C) economize. 
D) allocate goods by government edict. 
A) produce only free goods. 
B) try to produce outside its production possibilities frontiers. 
C) economize. 
D) allocate goods by government edict.

Question 3

-What is the opportunity cost of going from point A to point B?

Accepted Answer

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

Question 4

-Which movement between two points represents economic growth?

Accepted Answer

A) J to K 
B) K to L 
C) L to M 
D) M to N 
A) J to K 
B) K to L 
C) L to M 
D) M to N

Question 5

Which statement is true?

Accepted Answer

A) Scarcity is simply a lack of money. 
B) Our society has been so affluent in the last 50 years that scarcity is only a minor problem. 
C) The economic problem refers to the problem of poverty. 
D) If scarcity did not exist there would be no need to economize. 
A) Scarcity is simply a lack of money. 
B) Our society has been so affluent in the last 50 years that scarcity is only a minor problem. 
C) The economic problem refers to the problem of poverty. 
D) If scarcity did not exist there would be no need to economize.

Question 6

Each of the following statements about capital are correct except

Accepted Answer

A) capital is a "man"-made good used to produce other goods and services. 
B) japan has more capital than any other country in the world. 
C) office buildings and shopping malls are examples of capital. 
D) capital is considered a passive resource. 
A) capital is a "man"-made good used to produce other goods and services. 
B) japan has more capital than any other country in the world. 
C) office buildings and shopping malls are examples of capital. 
D) capital is considered a passive resource.

Question 7

-If we were at point ____ it would be possible to produce more heart transplants and more round-the-world trips.

Accepted Answer

A) P 
B) Q 
C) R 
D) S 
A) P 
B) Q 
C) R 
D) S

Question 8

The Law of Increasing Cost is based upon which of the following?

Accepted Answer

A) If units of a resource are added to a fixed proportion of other resources,eventually marginal output will decline. 
B) Economies of scale eventually outweigh diseconomies of scale. 
C) Resources become more suitable for use in the production process as the output of one good expands. 
D) All of the choices are true. 
A) If units of a resource are added to a fixed proportion of other resources,eventually marginal output will decline. 
B) Economies of scale eventually outweigh diseconomies of scale. 
C) Resources become more suitable for use in the production process as the output of one good expands. 
D) All of the choices are true.

Question 9

Which of the following statements about full employment is true?

Accepted Answer

A) Liberal economists insist that an unemployment rate of 4 percent constitutes full employment. 
B) Conservative economists feel that an unemployment rate of 6 percent is a realistic portrayal of full employment. 
C) Economists cannot agree on what constitutes full employment,thus 5% represents a reasonable compromise. 
D) All of these choices are true. 
A) Liberal economists insist that an unemployment rate of 4 percent constitutes full employment. 
B) Conservative economists feel that an unemployment rate of 6 percent is a realistic portrayal of full employment. 
C) Economists cannot agree on what constitutes full employment,thus 5% represents a reasonable compromise. 
D) All of these choices are true.

Question 10

-A country temporarily producing a combination of 12 units of guns and 5 units of butter would be ________________ (outside/on/inside)the production possibilities curve.

Accepted Answer

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

Question 11

Which is the most accurate statement?

Accepted Answer

A) In order to have full production,there must be full employment. 
B) In order to have full employment,there must be full production. 
C) Both statements are accurate. 
D) Neither statement is accurate. 
A) In order to have full production,there must be full employment. 
B) In order to have full employment,there must be full production. 
C) Both statements are accurate. 
D) Neither statement is accurate.

Question 12

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

Accepted Answer

A) the country's capacity to produce is fixed. 
B) the country is not using its resources efficiently. 
C) the country's capacity to produce has contracted. 
D) All of the choices are true. 
A) the country's capacity to produce is fixed. 
B) the country is not using its resources efficiently. 
C) the country's capacity to produce has contracted. 
D) All of the choices are true.

Question 13

The opportunity cost of producing one additional truck is

Accepted Answer

A) the profit that could have been earned from selling that truck. 
B) the amount of other goods that could not be produced because productive resources were used instead to produce that truck. 
C) the price of the truck. 
D) all of the choices are true. 
A) the profit that could have been earned from selling that truck. 
B) the amount of other goods that could not be produced because productive resources were used instead to produce that truck. 
C) the price of the truck. 
D) all of the choices are true.

Question 14

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

Accepted Answer

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

Question 15

A movement from point N to point L would represent

Accepted Answer

A) an increase in both consumer goods and capital goods. 
B) a decrease in both consumer goods and capital goods. 
C) an increase in consumer goods,but a decrease in capital goods. 
D) an increase in capital goods,but a decrease in consumer goods. 
A) an increase in both consumer goods and capital goods. 
B) a decrease in both consumer goods and capital goods. 
C) an increase in consumer goods,but a decrease in capital goods. 
D) an increase in capital goods,but a decrease in consumer goods.

Question 16

If our unemployment rate is 25 percent and our capacity utilization rate is 50 percent,our economy would be in the midst of a ____________.

Accepted Answer

The answer of If our unemployment rate is 25 percent...

Question 17

Suppose you had $1,000 to spend.You choose to spend the money on new clothes rather than on a new surfboard,your second choice or 1,000 lottery tickets,your third choice.

Accepted Answer

A) Your opportunity cost of spending the money on clothes is the $1,000 spent. 
B) Your opportunity cost of spending the money on clothes is not buying the surfboard. 
C) Your opportunity cost of spending the money on clothes is not buying the surfboard and the lottery tickets. 
D) There is no opportunity cost in this instance. 
A) Your opportunity cost of spending the money on clothes is the $1,000 spent. 
B) Your opportunity cost of spending the money on clothes is not buying the surfboard. 
C) Your opportunity cost of spending the money on clothes is not buying the surfboard and the lottery tickets. 
D) There is no opportunity cost in this instance.

Question 18

Which statement is true?

Accepted Answer

A) Entrepreneurial ability is in short supply in the U.S. 
B) Land,labor and capital may be considered passive resources. 
C) The concept of opportunity cost is irrelevant when there is scarcity. 
D) None of these statements are true. 
A) Entrepreneurial ability is in short supply in the U.S. 
B) Land,labor and capital may be considered passive resources. 
C) The concept of opportunity cost is irrelevant when there is scarcity. 
D) None of these statements are true.

Question 19

In the context of the global economy,our capacity utilization rate __________________ than it was just a few decades ago.

Accepted Answer

A) is much more important 
B) is much less important 
C) has the same importance 
A) is much more important 
B) is much less important 
C) has the same importance

Question 20

Assuming that full employment of labor is considered 5 percent unemployment,in 1998 and 1999 our economy operated ____________ the production possibilities frontier.

Accepted Answer

The answer of Assuming that full employment of labor is...

Exam 2: Resource Utilization

If the unemployment rate is 7 percent,our economy is operating

Every social system confronts scarcity and so must

-What is the opportunity cost of going from point A to point B?

-Which movement between two points represents economic growth?

Which statement is true?

Each of the following statements about capital are correct except

-If we were at point ____ it would be possible to produce more heart transplants and more round-the-world trips.

The Law of Increasing Cost is based upon which of the following?

Which of the following statements about full employment is true?

-A country temporarily producing a combination of 12 units of guns and 5 units of butter would be ________________ (outside/on/inside)the production possibilities curve.

Which is the most accurate statement?

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

The opportunity cost of producing one additional truck is

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

A movement from point N to point L would represent

If our unemployment rate is 25 percent and our capacity utilization rate is 50 percent,our economy would be in the midst of a ____________.

Suppose you had $1,000 to spend.You choose to spend the money on new clothes rather than on a new surfboard,your second choice or 1,000 lottery tickets,your third choice.

Which statement is true?

In the context of the global economy,our capacity utilization rate __________________ than it was just a few decades ago.

Assuming that full employment of labor is considered 5 percent unemployment,in 1998 and 1999 our economy operated ____________ the production possibilities frontier.

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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