Question 1

-If our economy were operating on its production possibilities frontier,it would have the best chance of temporarily reaching point F if

Accepted Answer

A) we were at war. 
B) we were in a depression. 
C) we were in a period of inflation. 
D) we invested more in plant and equipment. 
A) we were at war. 
B) we were in a depression. 
C) we were in a period of inflation. 
D) we invested more in plant and equipment.

Question 2

The statement "By the time our grandchildren are born,scarcity will not be a problem" is

Accepted Answer

A) possible only if technology advances at a great pace. 
B) true,because we will learn to limit our wants in the future. 
C) true,because by that time everyone's basic needs will be met. 
D) false,because people always want more than there is available. 
A) possible only if technology advances at a great pace. 
B) true,because we will learn to limit our wants in the future. 
C) true,because by that time everyone's basic needs will be met. 
D) false,because people always want more than there is available.

Question 3

-Place point C on the graph to indicate where our economy operated in 1997.

Accepted Answer

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

Question 4

-Which point shows where our economy would have a 100 percent unemployment rate?

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 5

Each of the following is an example of capital,except

Accepted Answer

A) an office building. 
B) gold in a gold mine. 
C) an assembly line. 
D) a computer system. 
A) an office building. 
B) gold in a gold mine. 
C) an assembly line. 
D) a computer system.

Question 6

Capital refers to

Accepted Answer

A) "man"-made goods used to produce other goods or services. 
B) the work and time for which employees are paid. 
C) natural resources as well as "man"-made goods. 
D) the person who assembles the needed resources to start a business. 
A) "man"-made goods used to produce other goods or services. 
B) the work and time for which employees are paid. 
C) natural resources as well as "man"-made goods. 
D) the person who assembles the needed resources to start a business.

Question 7

Scarcity exists because

Accepted Answer

A) of unlimited resources. 
B) human wants are enormous relative to the means available to satisfy them. 
C) production is limited only by technology and human energy. 
D) advertising creates unnatural desires for surplus goods. 
A) of unlimited resources. 
B) human wants are enormous relative to the means available to satisfy them. 
C) production is limited only by technology and human energy. 
D) advertising creates unnatural desires for surplus goods.

Question 8

Hypothetical Production Schedule for a Two-Product Economy $\begin{array}{ccc}
&Units~ of&Units~ of\
\text { Points } & \text { Consumer Goods } & \text { Capital Goods } \
\hline \mathrm{A} & 0 & 30 \
\mathrm{B} & 15 & 24 \
\mathrm{C} & 27 & 18 \
\mathrm{D} & 36 & 12 \
\mathrm{E} & 42 & 6 \
\mathrm{F} & 45 & 0
\end{array}$
-If the economy produces 27 consumer goods and 12 capital goods,the economy would be producing __________________ (outside/on/inside)the production possibilities curve.

Accepted Answer

The answer of Hypothetical Production Schedule for a Two-Product Economy...

Question 9

Referring to a production possibilities curve and the goods being compared,depict the economic event.The bubonic plague (Black Death)in the 1300s killed one-third of Europe's population (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 10

Which of the following is not demonstrated by a production possibility curve?

Accepted Answer

A) Scarcity 
B) Opportunity cost 
C) Necessity for choice due to scarcity 
D) Price 
A) Scarcity 
B) Opportunity cost 
C) Necessity for choice due to scarcity 
D) Price

Question 11

Resources include

Accepted Answer

A) land,labor and money. 
B) entrepreneurship and capital. 
C) capital and money. 
D) corporations and partnerships. 
E) monopoly and perfect competition. 
A) land,labor and money. 
B) entrepreneurship and capital. 
C) capital and money. 
D) corporations and partnerships. 
E) monopoly and perfect competition.

Question 12

A small economy produces only pizzas and jeans.If resources are used inefficiently in the economy,

Accepted Answer

A) it will be possible to produce more pizzas without decreasing the production of jeans. 
B) the economy will be operating at a point on its production possibilities curve. 
C) the economy will be operating at a point outside its production possibilities curve. 
D) it will not be possible to produce more jeans or pizzas. 
A) it will be possible to produce more pizzas without decreasing the production of jeans. 
B) the economy will be operating at a point on its production possibilities curve. 
C) the economy will be operating at a point outside its production possibilities curve. 
D) it will not be possible to produce more jeans or pizzas.

Question 13

If the country wanted to produce the maximum total number of units of guns and butter combined,it would produce at point(s)_______________.

Accepted Answer

The answer of If the country wanted to produce the...

Question 14

Opportunity cost can be best defined as

Accepted Answer

A) all sunk costs. 
B) the value of the best alternative given up when making a choice. 
C) the explicit cost of an activity. 
D) the cost of making one additional unit. 
E) the cost of finding profit-making opportunities. 
A) all sunk costs. 
B) the value of the best alternative given up when making a choice. 
C) the explicit cost of an activity. 
D) the cost of making one additional unit. 
E) the cost of finding profit-making opportunities.

Question 15

Our economy is generally operating _________ the production possibilities curve.

Accepted Answer

A) inside 
B) outside 
C) on 
A) inside 
B) outside 
C) on

Question 16

The economic problem is essentially one of deciding how to make the best use of

Accepted Answer

A) limited resources to satisfy limited wants. 
B) unlimited resources to satisfy limited wants. 
C) limited resources to satisfy unlimited wants. 
D) unlimited resources to satisfy unlimited wants. 
A) limited resources to satisfy limited wants. 
B) unlimited resources to satisfy limited wants. 
C) limited resources to satisfy unlimited wants. 
D) unlimited resources to satisfy unlimited wants.

Question 17

If an economy is operating on its production possibility frontier,which of the following statements is true?

Accepted Answer

A) Products are produced using inefficient production technology. 
B) The capacity utilization rate is less than full production. 
C) The economy's labor force is fully employed. 
D) A fall in the price of an input will enable the economy to produce outside the production possibility frontier. 
A) Products are produced using inefficient production technology. 
B) The capacity utilization rate is less than full production. 
C) The economy's labor force is fully employed. 
D) A fall in the price of an input will enable the economy to produce outside the production possibility frontier.

Question 18

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

Accepted Answer

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

Question 19

Which of the following statements about the concept of opportunity cost is true?

Accepted Answer

A) The opportunity cost of a decision only includes monetary outlays. 
B) The opportunity cost of a decision is the next best foregone alternative. 
C) Some decisions have zero opportunity cost. 
D) The opportunity cost of a college education is measured by the payments for tuition and books. 
A) The opportunity cost of a decision only includes monetary outlays. 
B) The opportunity cost of a decision is the next best foregone alternative. 
C) Some decisions have zero opportunity cost. 
D) The opportunity cost of a college education is measured by the payments for tuition and books.

Question 20

-Which of the following will NOT shift an economy's production possibilities curve outward?

Accepted Answer

A) An increase in technology 
B) An improvement in the literacy rate 
C) A reduction in the unemployment rate 
D) An increase in the number of workers available 
A) An increase in technology 
B) An improvement in the literacy rate 
C) A reduction in the unemployment rate 
D) An increase in the number of workers available

Exam 2: Resource Utilization

-If our economy were operating on its production possibilities frontier,it would have the best chance of temporarily reaching point F if

The statement "By the time our grandchildren are born,scarcity will not be a problem" is

-Place point C on the graph to indicate where our economy operated in 1997.

-Which point shows where our economy would have a 100 percent unemployment rate?

Each of the following is an example of capital,except

Capital refers to

Scarcity exists because

Referring to a production possibilities curve and the goods being compared,depict the economic event.The bubonic plague (Black Death)in the 1300s killed one-third of Europe's population (capital goods vs.consumer goods).

Which of the following is not demonstrated by a production possibility curve?

Resources include

A small economy produces only pizzas and jeans.If resources are used inefficiently in the economy,

If the country wanted to produce the maximum total number of units of guns and butter combined,it would produce at point(s)_______________.

Opportunity cost can be best defined as

Our economy is generally operating _________ the production possibilities curve.

The economic problem is essentially one of deciding how to make the best use of

If an economy is operating on its production possibility frontier,which of the following statements is true?

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

Which of the following statements about the concept of opportunity cost is true?

-Which of the following will NOT shift an economy's production possibilities curve outward?

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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