Question 1

The opportunity cost of owning a car is

Accepted Answer

A) the price of the car. 
B) filling the tank twice a week. 
C) the cost of getting your car inspected once a year. 
D) the vacation to Hawaii you had to give up in order to make your car payments. 
A) the price of the car. 
B) filling the tank twice a week. 
C) the cost of getting your car inspected once a year. 
D) the vacation to Hawaii you had to give up in order to make your car payments.

Question 2

Our nation

Accepted Answer

A) has sometimes attained productive efficiency. 
B) usually attains productive efficiency. 
C) never attained productive efficiency. 
A) has sometimes attained productive efficiency. 
B) usually attains productive efficiency. 
C) never attained productive efficiency.

Question 3

When business firms get to be too big,they are suffering from ___________________.

Accepted Answer

diseconomi

Question 4

The main reason our standard of living is so much higher than that of India and China is that we have more

Accepted Answer

A) land. 
B) labor. 
C) capital. 
D) money. 
A) land. 
B) labor. 
C) capital. 
D) money.

Question 5

Unlimited wants need not be a problem if

Accepted Answer

A) resources are also unlimited. 
B) resources are flexible in what they can do. 
C) resources are basic energy resources like oil. 
D) resources are human resources such as skilled labor. 
E) resources cannot be captured in a war. 
A) resources are also unlimited. 
B) resources are flexible in what they can do. 
C) resources are basic energy resources like oil. 
D) resources are human resources such as skilled labor. 
E) resources cannot be captured in a war.

Question 6

-In 1944 the U.S.economy was temporarily operating at point ________.

Accepted Answer

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

Question 7

Unemployment means

Accepted Answer

A) the same as underemployment. 
B) a recession. 
C) slow economic growth. 
D) that not all resources are being used. 
A) the same as underemployment. 
B) a recession. 
C) slow economic growth. 
D) that not all resources are being used.

Question 8

The central fact of economics is

Accepted Answer

A) production. 
B) distribution. 
C) equilibrium. 
D) efficiency. 
E) scarcity. 
A) production. 
B) distribution. 
C) equilibrium. 
D) efficiency. 
E) scarcity.

Question 9

If our nation is operating at full production,not only are we using our most ________ technology,but we are utilizing our land,labor,capital and entrepreneurial ability at their most _______________.

Accepted Answer

up-to-date

Question 10

Which of the following does not illustrate the concept of opportunity cost?

Accepted Answer

A) Between 1990 and 1997,the state of California laid off 10,000 of its university employees to have the money to hire 10,000 employees for its prison system. 
B) By reducing its unemployment rate,the United States dramatically increased its production of both civilian and war goods in the early years of World War II. 
C) A computer whiz at M.I.T.gives up her senior year at the university to take a high-paying position at a new company,Socrates.com. 
D) The Secretary of the Interior must choose between enforcing a law that would save the spotted owl,an endangered species or the loss of 500 logging jobs. 
A) Between 1990 and 1997,the state of California laid off 10,000 of its university employees to have the money to hire 10,000 employees for its prison system. 
B) By reducing its unemployment rate,the United States dramatically increased its production of both civilian and war goods in the early years of World War II. 
C) A computer whiz at M.I.T.gives up her senior year at the university to take a high-paying position at a new company,Socrates.com. 
D) The Secretary of the Interior must choose between enforcing a law that would save the spotted owl,an endangered species or the loss of 500 logging jobs.

Question 11

-Which statement is the most accurate?

Accepted Answer

A) A nation's economic capacity expands when the size of the labor force expands. 
B) Our rate of economic growth slows down if we produced too many investment goods and not enough consumer goods. 
C) Our unemployment rate has never fallen below five percent. 
D) We could raise our economic growth rate if Americans would invest less and spend more. 
A) A nation's economic capacity expands when the size of the labor force expands. 
B) Our rate of economic growth slows down if we produced too many investment goods and not enough consumer goods. 
C) Our unemployment rate has never fallen below five percent. 
D) We could raise our economic growth rate if Americans would invest less and spend more.

Question 12

If our unemployment rate is 10 percent and our capacity utilization rate is 70 percent,our economy is in the midst of a ___________.

Accepted Answer

The answer of If our unemployment rate is 10 percent...

Question 13

If you own a building and you decide to use that building to open a restaurant,

Accepted Answer

A) there are no sunk costs involved in this decision. 
B) there is no opportunity cost of using this building for a restaurant because you own it. 
C) the only cost relevant to this decision is the price you paid for the building. 
D) there is an opportunity cost of using this building for a restaurant because it could have been used in other ways. 
A) there are no sunk costs involved in this decision. 
B) there is no opportunity cost of using this building for a restaurant because you own it. 
C) the only cost relevant to this decision is the price you paid for the building. 
D) there is an opportunity cost of using this building for a restaurant because it could have been used in other ways.

Question 14

Adam Smith noted in 1776 that

Accepted Answer

A) the wealth of nations comes from the money the nations have accumulated. 
B) the wealth of nations comes from the gold the nations have accumulated. 
C) the wealth of nations comes from the resources that produce the nation's goods and services. 
D) the problem of scarcity had been lickeD. 
A) the wealth of nations comes from the money the nations have accumulated. 
B) the wealth of nations comes from the gold the nations have accumulated. 
C) the wealth of nations comes from the resources that produce the nation's goods and services. 
D) the problem of scarcity had been lickeD.

Question 15

Statement I.As long as we are on our production possibilities frontier,we can produce as many guns and as much butter as we want.
Statement II.In theory,a nation may be on its production possibilities frontier;in practice,no nation has ever attained this economic state.

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 16

Which statement is true?

Accepted Answer

A) On the production possibilities frontier,we have five percent unemployment of labor. 
B) On the production possibilities frontier,85 percent of capital is employed. 
C) If we moved closer to the origin and further away from the production possibilities frontier,unemployment would increase. 
D) To have economic growth,we must push the production possibilities frontier outwarD. 
E) All of the statements are true. 
A) On the production possibilities frontier,we have five percent unemployment of labor. 
B) On the production possibilities frontier,85 percent of capital is employed. 
C) If we moved closer to the origin and further away from the production possibilities frontier,unemployment would increase. 
D) To have economic growth,we must push the production possibilities frontier outwarD. 
E) All of the statements are true.

Question 17

A movement from point J to point M would represent

Accepted Answer

A) an increase in consumer goods,but not capital goods. 
B) an increase in capital goods,but not consumer goods. 
C) an increase in both capital goods and consumer goods. 
D) no increase in either capital goods or consumer goods. 
A) an increase in consumer goods,but not capital goods. 
B) an increase in capital goods,but not consumer goods. 
C) an increase in both capital goods and consumer goods. 
D) no increase in either capital goods or consumer goods.

Question 18

Referring to a production possibilities curve and the goods being compared,depict the economic event.The SARS epidemic spreads rapidly throughout Toronto,Canada claiming millions of lives (capital 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 19

Which statement is true?

Accepted Answer

A) The U.S.standard of living is higher than that of India because we have more capital. 
B) It is easier to attain full production than full employment. 
C) We often operate outside our production possibility frontier. 
D) All of the statements are true. 
E) The U.S.standard of living is higher than that of India because we have more capital AND we often operate outside our production possibility frontier. 
A) The U.S.standard of living is higher than that of India because we have more capital. 
B) It is easier to attain full production than full employment. 
C) We often operate outside our production possibility frontier. 
D) All of the statements are true. 
E) The U.S.standard of living is higher than that of India because we have more capital AND we often operate outside our production possibility frontier.

Question 20

-Which point shows where our economy was temporarily operating during World War II,when we had reduced our unemployment rate to about two percent?

Accepted Answer

A) Point A 
B) Point B 
C) Point C 
D) Point D 
A) Point A 
B) Point B 
C) Point C 
D) Point D

Exam 2: Resource Utilization

The opportunity cost of owning a car is

Our nation

When business firms get to be too big,they are suffering from ___________________.

The main reason our standard of living is so much higher than that of India and China is that we have more

Unlimited wants need not be a problem if

-In 1944 the U.S.economy was temporarily operating at point ________.

Unemployment means

The central fact of economics is

If our nation is operating at full production,not only are we using our most ________ technology,but we are utilizing our land,labor,capital and entrepreneurial ability at their most _______________.

Which of the following does not illustrate the concept of opportunity cost?

-Which statement is the most accurate?

If our unemployment rate is 10 percent and our capacity utilization rate is 70 percent,our economy is in the midst of a ___________.

If you own a building and you decide to use that building to open a restaurant,

Adam Smith noted in 1776 that

Statement I.As long as we are on our production possibilities frontier,we can produce as many guns and as much butter as we want. Statement II.In theory,a nation may be on its production possibilities frontier;in practice,no nation has ever attained this economic state.

Which statement is true?

A movement from point J to point M would represent

Referring to a production possibilities curve and the goods being compared,depict the economic event.The SARS epidemic spreads rapidly throughout Toronto,Canada claiming millions of lives (capital vs.consumer goods).

Which statement is true?

-Which point shows where our economy was temporarily operating during World War II,when we had reduced our unemployment rate to about two percent?

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

Filters

If our nation is operating at full production,not only are we using our most technology,but we are utilizing our land,labor,capital and entrepreneurial ability at their most _______.