Question 1

Which situation would most likely cause a nation's production possibilities curve to shift inward?

Accepted Answer

A)  The construction of more capital goods 
B)  An increase in foreign trade 
C)  An increase in the number of skilled immigrant workers 
D)  The destruction from bombing and warfare in a losing military conflict 
A)  The construction of more capital goods 
B)  An increase in foreign trade 
C)  An increase in the number of skilled immigrant workers 
D)  The destruction from bombing and warfare in a losing military conflict

Question 2

If the marginal benefits of the output from resources devoted to the production of a product are greater than the marginal costs,then there has been an overallocation of resources to the production of that product.

Accepted Answer

A) True 
 B)False

Question 3

Refer to the above production possibilities curves.Curve (a)is the current curve for the economy.The movement from curve (a)to curve (b)suggests:

Accepted Answer

A)  a movement from unemployment to full employment. 
B)  an improvement in capital goods technology but not in consumer goods technology. 
C)  an improvement in consumer goods technology but not in capital goods technology. 
D)  a decline in the total output of this society. 
A)  a movement from unemployment to full employment. 
B)  an improvement in capital goods technology but not in consumer goods technology. 
C)  an improvement in consumer goods technology but not in capital goods technology. 
D)  a decline in the total output of this society.

Question 4

An "aggregate":

Accepted Answer

A)  treats a collection of specific units as one unit. 
B)  treats a single unit as if it were a collection of specific units. 
C)  is the primary unit of analysis in microeconomics. 
D)  is too large to analyze using standard macroeconomic theories. 
A)  treats a collection of specific units as one unit. 
B)  treats a single unit as if it were a collection of specific units. 
C)  is the primary unit of analysis in microeconomics. 
D)  is too large to analyze using standard macroeconomic theories.

Question 5

If a production possibilities boundary is a curve concave to the origin and not a straight line,then:

Accepted Answer

A)  resources are equally suited to producing alternative products. 
B)  resources are not equally suited to producing alternative products. 
C)  resources are perfectly interchangeable to alternative uses. 
D)  there are unemployed resources. 
A)  resources are equally suited to producing alternative products. 
B)  resources are not equally suited to producing alternative products. 
C)  resources are perfectly interchangeable to alternative uses. 
D)  there are unemployed resources.

Question 6

The graph above shows the production possibilities curve for an economy producing two goods,X and Y.Which of the points on the graph indicate unemployed resources?

Accepted Answer

A)  D only 
B)  E only 
C)  E and A only 
D)  B and C only 
A)  D only 
B)  E only 
C)  E and A only 
D)  B and C only

Question 7

How is the economic perspective reflected in lines for fast food?

Accepted Answer

A)  Customers select the shortest line because they have perfect information. 
B)  Customers select the shortest line because they believe it will reduce their time cost of obtaining food. 
C)  Lines will typically be of unequal length because of the inefficiencies in counter service. 
D)  The set of food choices is often too complex for customers and thus creates long lines. 
A)  Customers select the shortest line because they have perfect information. 
B)  Customers select the shortest line because they believe it will reduce their time cost of obtaining food. 
C)  Lines will typically be of unequal length because of the inefficiencies in counter service. 
D)  The set of food choices is often too complex for customers and thus creates long lines.

Question 8

As a consequence of the condition of scarcity:

Accepted Answer

A)  there is never enough of anything. 
B)  production has to be centrally planned. 
C)  things that are plentiful have relatively high prices. 
D)  individuals and communities have to make choices from among alternatives. 
A)  there is never enough of anything. 
B)  production has to be centrally planned. 
C)  things that are plentiful have relatively high prices. 
D)  individuals and communities have to make choices from among alternatives.

Question 9

The following economy produces two products.   Refer to the above table.The total opportunity cost of the three units of tanks is:

Accepted Answer

A)  200 units of autos. 
B)  350 units of autos. 
C)  650 units of autos. 
D)  1000 units of autos.
To get 3 units of tanks,this economy had to give up 350 (1,000 - 650 = 350)autos. 
A)  200 units of autos. 
B)  350 units of autos. 
C)  650 units of autos. 
D)  1000 units of autos.
To get 3 units of tanks,this economy had to give up 350 (1,000 - 650 = 350)autos.

Question 10

The term "scarcity" in economics can refer to the fact that:

Accepted Answer

A)  economic wants are limited and resources are abused. 
B)  even in the richest country some people go hungry. 
C)  no country can produce enough products to satisfy everybody's economic wants. 
D)  it is impossible to produce too much of any particular good or service in a market economy. 
A)  economic wants are limited and resources are abused. 
B)  even in the richest country some people go hungry. 
C)  no country can produce enough products to satisfy everybody's economic wants. 
D)  it is impossible to produce too much of any particular good or service in a market economy.

Question 11

The overallocation of resources by society to a product means that the:

Accepted Answer

A)  marginal benefit is greater than the marginal cost. 
B)  marginal cost is greater than the marginal benefit. 
C)  entrepreneurs are making too much profit in the economy. 
D)  workers are not being paid adequate wages and salaries. 
A)  marginal benefit is greater than the marginal cost. 
B)  marginal cost is greater than the marginal benefit. 
C)  entrepreneurs are making too much profit in the economy. 
D)  workers are not being paid adequate wages and salaries.

Question 12

Decreases in product prices causes the consumer's:

Accepted Answer

A)  production possibilities curves to shift outward from the origin. 
B)  production possibilities curves to shift inward to the origin. 
C)  budget line to shift outward from the origin. 
D)  budget line to shift inward to the origin. 
A)  production possibilities curves to shift outward from the origin. 
B)  production possibilities curves to shift inward to the origin. 
C)  budget line to shift outward from the origin. 
D)  budget line to shift inward to the origin.

Question 13

Which expression is another way of saying "marginal cost"?

Accepted Answer

A)  total cost 
B)  additional cost 
C)  average cost 
D)  scarcity 
A)  total cost 
B)  additional cost 
C)  average cost 
D)  scarcity

Question 14

The fundamental economic problem is that productive resources are scarce in relation to the demand for them.

Accepted Answer

A) True 
 B)False

Question 15

Refer to the above graph.The total opportunity cost of nine drill presses is:

Accepted Answer

A)  1 unit of bread. 
B)  2 units of bread. 
C)  3 units of bread. 
D)  4 units of bread.
To get 9 drill presses,this economy must give up 3 (4 - 1 = 3)units of bread. 
A)  1 unit of bread. 
B)  2 units of bread. 
C)  3 units of bread. 
D)  4 units of bread.
To get 9 drill presses,this economy must give up 3 (4 - 1 = 3)units of bread.

Question 16

The satisfaction or pleasure one gets from consuming a good or service is called:

Accepted Answer

A)  price. 
B)  utility. 
C)  consumption. 
D)  preferences. 
A)  price. 
B)  utility. 
C)  consumption. 
D)  preferences.

Question 17

The production possibilities table below shows the hypothetical relationship between the production of capital goods and consumer goods in an economy.   Refer to the table above.What is the opportunity cost of producing the first three units of capital goods?

Accepted Answer

A)  6 units of consumer goods 
B)  7 units of consumer goods 
C)  15 units of consumer goods 
D)  22 units of consumer goods
Producing the first three capital goods requires giving up 15 (22 - 7 = 15)consumer goods. 
A)  6 units of consumer goods 
B)  7 units of consumer goods 
C)  15 units of consumer goods 
D)  22 units of consumer goods
Producing the first three capital goods requires giving up 15 (22 - 7 = 15)consumer goods.

Question 18

Points C,D,E,and H on the above graph show:

Accepted Answer

A)  an inefficient allocation of society's scarce resources. 
B)  a constant trade-off between food and clothing. 
C)  possible combinations of food and clothing. 
D)  unattainable combinations of food and clothing. 
A)  an inefficient allocation of society's scarce resources. 
B)  a constant trade-off between food and clothing. 
C)  possible combinations of food and clothing. 
D)  unattainable combinations of food and clothing.

Question 19

The branch of economics that focuses primarily on aggregates is:

Accepted Answer

A)  macroeconomics. 
B)  microeconomics. 
C)  scientific economics. 
D)  consumer economics. 
A)  macroeconomics. 
B)  microeconomics. 
C)  scientific economics. 
D)  consumer economics.

Question 20

The following economy produces two products.   Refer to the above table.The opportunity cost of each additional tank in terms of autos:

Accepted Answer

A)  remains constant. 
B)  falls as more tanks are produced. 
C)  increases as more tanks are produced. 
D)  cannot be measured because there is no currency. 
A)  remains constant. 
B)  falls as more tanks are produced. 
C)  increases as more tanks are produced. 
D)  cannot be measured because there is no currency.

Which situation would most likely cause a nation's production possibilities curve to shift inward?

If the marginal benefits of the output from resources devoted to the production of a product are greater than the marginal costs,then there has been an overallocation of resources to the production of that product.

Refer to the above production possibilities curves.Curve (a)is the current curve for the economy.The movement from curve (a)to curve (b)suggests:

An "aggregate":

If a production possibilities boundary is a curve concave to the origin and not a straight line,then:

The graph above shows the production possibilities curve for an economy producing two goods,X and Y.Which of the points on the graph indicate unemployed resources?

How is the economic perspective reflected in lines for fast food?

As a consequence of the condition of scarcity:

The following economy produces two products. Refer to the above table.The total opportunity cost of the three units of tanks is:

The term "scarcity" in economics can refer to the fact that:

The overallocation of resources by society to a product means that the:

Decreases in product prices causes the consumer's:

Which expression is another way of saying "marginal cost"?

The fundamental economic problem is that productive resources are scarce in relation to the demand for them.

Refer to the above graph.The total opportunity cost of nine drill presses is:

The satisfaction or pleasure one gets from consuming a good or service is called:

The production possibilities table below shows the hypothetical relationship between the production of capital goods and consumer goods in an economy. Refer to the table above.What is the opportunity cost of producing the first three units of capital goods?

Points C,D,E,and H on the above graph show:

The branch of economics that focuses primarily on aggregates is:

The following economy produces two products. Refer to the above table.The opportunity cost of each additional tank in terms of autos:

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Elasticity of Demand and Supply

Market Failures: Public Goods and Externalities

Businesses and Their Costs

Pure Competition

Pure Monopoly

Monopolistic Competition and Oligopoly

Wage Determination

Income Inequality and Poverty

Public Finance: Expenditures and Taxes

International Trade and Exchange Rates

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Exam 1: Limits, Alternatives, and Choices

Which situation would most likely cause a nation's production possibilities curve to shift inward?

If the marginal benefits of the output from resources devoted to the production of a product are greater than the marginal costs,then there has been an overallocation of resources to the production of that product.

Refer to the above production possibilities curves.Curve (a)is the current curve for the economy.The movement from curve (a)to curve (b)suggests:

An "aggregate":

If a production possibilities boundary is a curve concave to the origin and not a straight line,then:

The graph above shows the production possibilities curve for an economy producing two goods,X and Y.Which of the points on the graph indicate unemployed resources?

How is the economic perspective reflected in lines for fast food?

As a consequence of the condition of scarcity:

The following economy produces two products. Refer to the above table.The total opportunity cost of the three units of tanks is:

The term "scarcity" in economics can refer to the fact that:

The overallocation of resources by society to a product means that the:

Decreases in product prices causes the consumer's:

Which expression is another way of saying "marginal cost"?

The fundamental economic problem is that productive resources are scarce in relation to the demand for them.

Refer to the above graph.The total opportunity cost of nine drill presses is:

The satisfaction or pleasure one gets from consuming a good or service is called:

The production possibilities table below shows the hypothetical relationship between the production of capital goods and consumer goods in an economy. Refer to the table above.What is the opportunity cost of producing the first three units of capital goods?

Points C,D,E,and H on the above graph show:

The branch of economics that focuses primarily on aggregates is:

The following economy produces two products. Refer to the above table.The opportunity cost of each additional tank in terms of autos:

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Elasticity of Demand and Supply

Market Failures: Public Goods and Externalities

Businesses and Their Costs

Pure Competition

Pure Monopoly

Monopolistic Competition and Oligopoly

Wage Determination

Income Inequality and Poverty

Public Finance: Expenditures and Taxes

International Trade and Exchange Rates

Filters