Question 1

The production possibility curve:

Accepted Answer

A)  is convex to the origin. 
B)  is based on the law of diminishing returns. 
C)  is the boundary between attainable and unattainable outputs. 
D)  reflects the mixed economy found with most economic systems. 
A)  is convex to the origin. 
B)  is based on the law of diminishing returns. 
C)  is the boundary between attainable and unattainable outputs. 
D)  reflects the mixed economy found with most economic systems.

Question 2

Economics can best be described as the study of:

Accepted Answer

A)  how to increase the level of productive resources so there is maximum output in society. 
B)  how to use productive resources to maximize income level. 
C)  how people,institutions,and society make choices under conditions of scarcity. 
D)  how business structures influence the allocation of income among firms. 
A)  how to increase the level of productive resources so there is maximum output in society. 
B)  how to use productive resources to maximize income level. 
C)  how people,institutions,and society make choices under conditions of scarcity. 
D)  how business structures influence the allocation of income among firms.

Question 3

The production possibilities curve bows outward from the origin because:

Accepted Answer

A)  opportunity costs decrease as the production of a good increases. 
B)  opportunity costs increase as the production of a good increases. 
C)  more production of one good results in more production of the other good. 
D)  resources are not of uniform quality. 
A)  opportunity costs decrease as the production of a good increases. 
B)  opportunity costs increase as the production of a good increases. 
C)  more production of one good results in more production of the other good. 
D)  resources are not of uniform quality.

Question 4

By using the same ceteris paribus assumptions,economic principles are just as certain and precise as those of the laboratory sciences.

Accepted Answer

A) True 
 B)False

Question 5

Refer to the above production possibilities curves.Curve (a)is the current curve for the economy.Other things being equal,society's current choice of point P on curve (a)will:

Accepted Answer

A)  allow it to achieve more rapid economic growth than would the choice of point N. 
B)  entail a slower rate of economic growth than would the choice of point N. 
C)  entail the same rate of growth as would the choice of point N. 
D)  be unobtainable because it exceeds the productive capacity of the economy. 
A)  allow it to achieve more rapid economic growth than would the choice of point N. 
B)  entail a slower rate of economic growth than would the choice of point N. 
C)  entail the same rate of growth as would the choice of point N. 
D)  be unobtainable because it exceeds the productive capacity of the economy.

Question 6

Refer to the above graph.The selection of which point on the production possibilities curve is most like to result in the largest increase in economic growth over time?

Accepted Answer

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

Question 7

The economizing problem arises from the conflict between having relatively unlimited resources and relatively limited wants.

Accepted Answer

A) True 
 B)False

Question 8

Suppose there are two economies,Alpha and Beta,which have the same production possibilities curves and are on the same point on each curve.If Beta then devotes more resources to investment goods than consumer goods when compared to Alpha,then in the future:

Accepted Answer

A)  Alpha will experience greater economic growth than Beta. 
B)  Beta will experience greater economic growth than Alpha. 
C)  Alpha will not be able to achieve full employment or productive efficiency. 
D)  Beta will not be able to achieve full employment or productive efficiency 
A)  Alpha will experience greater economic growth than Beta. 
B)  Beta will experience greater economic growth than Alpha. 
C)  Alpha will not be able to achieve full employment or productive efficiency. 
D)  Beta will not be able to achieve full employment or productive efficiency

Question 9

If a nation is incurring a trade deficit (it is buying more from abroad-importing,than it is selling abroad-exporting),then it is most likely producing beyond the frontier of its production possibilities curve.

Accepted Answer

A) True 
 B)False

Question 10

After graduating from high school,Ron Willis plans to go to college.The college tuition is $15,000 a year.But,instead of going to college,Ron could take a full-time job paying $20,000.If Ron decides to go to college,what is his opportunity cost for attending for one year?

Accepted Answer

A)  $5,000 
B)  $15,000 
C)  $20,000 
D)  $35,000 
A)  $5,000 
B)  $15,000 
C)  $20,000 
D)  $35,000

Question 11

Which question is an illustration of a microeconomic question?

Accepted Answer

A)  Is the quantity of wine purchased in one year dependent upon the price of wine? 
B)  Does government spending influence the total level of employment in the economy? 
C)  Is the purchasing power of the dollar higher or lower today than it was in 2005? 
D)  Is capitalism superior to socialism? 
A)  Is the quantity of wine purchased in one year dependent upon the price of wine? 
B)  Does government spending influence the total level of employment in the economy? 
C)  Is the purchasing power of the dollar higher or lower today than it was in 2005? 
D)  Is capitalism superior to socialism?

Question 12

Economic growth is shown by a shift of the production possibilities curve outward and to the right.

Accepted Answer

A) True 
 B)False

Question 13

Macroeconomics is the study of economics from the standpoint of:

Accepted Answer

A)  individual economic units. 
B)  a typical firm. 
C)  a typical household. 
D)  the overall economy. 
A)  individual economic units. 
B)  a typical firm. 
C)  a typical household. 
D)  the overall economy.

Question 14

When an economy is at full employment and full production,more of any one product:

Accepted Answer

A)  cannot be produced because there is full production. 
B)  can be produced only if there is a general decrease in prices. 
C)  can be produced only if there is less production of some other products. 
D)  cannot be produced unless private enterprise does so rather than government. 
A)  cannot be produced because there is full production. 
B)  can be produced only if there is a general decrease in prices. 
C)  can be produced only if there is less production of some other products. 
D)  cannot be produced unless private enterprise does so rather than government.

Question 15

A movement along the production possibilities curve would imply that:

Accepted Answer

A)  the labor force has grown. 
B)  productivity has increased. 
C)  productivity has declined. 
D)  society has chosen a different set of outputs. 
A)  the labor force has grown. 
B)  productivity has increased. 
C)  productivity has declined. 
D)  society has chosen a different set of outputs.

Question 16

The opportunity cost of a new national park is the:

Accepted Answer

A)  alternative uses for the land and funding for the park. 
B)  cost of constructing park buildings and highways to get to it. 
C)  cost of hiring staff and park rangers to provide services for visitors. 
D)  increased pollution to the wildlife habitat at the park. 
A)  alternative uses for the land and funding for the park. 
B)  cost of constructing park buildings and highways to get to it. 
C)  cost of hiring staff and park rangers to provide services for visitors. 
D)  increased pollution to the wildlife habitat at the park.

Question 17

The production possibilities curve represents which of the following?

Accepted Answer

A)  The amount of goods attainable with variable resources 
B)  The maximum amount of goods attainable with variable resources 
C)  The maximum combinations of goods attainable with fixed resources 
D)  The amount of goods attainable if prices decline 
A)  The amount of goods attainable with variable resources 
B)  The maximum amount of goods attainable with variable resources 
C)  The maximum combinations of goods attainable with fixed resources 
D)  The amount of goods attainable if prices decline

Question 18

Opportunity cost is best defined as:

Accepted Answer

A)  marginal cost minus marginal benefit. 
B)  the value of the best forgone alternative. 
C)  the time spent on an economic activity. 
D)  the money cost of an economic decision. 
A)  marginal cost minus marginal benefit. 
B)  the value of the best forgone alternative. 
C)  the time spent on an economic activity. 
D)  the money cost of an economic decision.

Question 19

From an economic perspective,when a student decides to attend another year of college,the student has concluded that the marginal:

Accepted Answer

A)  costs of attending college have increased that year. 
B)  benefits of attending college have decreased that year. 
C)  benefits of attending college are greater than the marginal costs. 
D)  costs of attending college will be subsidized by someone else such as parents or the government. 
A)  costs of attending college have increased that year. 
B)  benefits of attending college have decreased that year. 
C)  benefits of attending college are greater than the marginal costs. 
D)  costs of attending college will be subsidized by someone else such as parents or the government.

Question 20

In a production possibilities table,the most-valued or optimal point for society is determined by:

Accepted Answer

A)  a combination of products at the midpoint of the table. 
B)  a combination of products at the ends of the table. 
C)  the equality of marginal benefits and marginal costs. 
D)  the maximization of opportunity costs. 
A)  a combination of products at the midpoint of the table. 
B)  a combination of products at the ends of the table. 
C)  the equality of marginal benefits and marginal costs. 
D)  the maximization of opportunity costs.

The production possibility curve:

Economics can best be described as the study of:

The production possibilities curve bows outward from the origin because:

By using the same ceteris paribus assumptions,economic principles are just as certain and precise as those of the laboratory sciences.

Refer to the above production possibilities curves.Curve (a)is the current curve for the economy.Other things being equal,society's current choice of point P on curve (a)will:

Refer to the above graph.The selection of which point on the production possibilities curve is most like to result in the largest increase in economic growth over time?

The economizing problem arises from the conflict between having relatively unlimited resources and relatively limited wants.

Suppose there are two economies,Alpha and Beta,which have the same production possibilities curves and are on the same point on each curve.If Beta then devotes more resources to investment goods than consumer goods when compared to Alpha,then in the future:

If a nation is incurring a trade deficit (it is buying more from abroad-importing,than it is selling abroad-exporting),then it is most likely producing beyond the frontier of its production possibilities curve.

After graduating from high school,Ron Willis plans to go to college.The college tuition is $15,000 a year.But,instead of going to college,Ron could take a full-time job paying $20,000.If Ron decides to go to college,what is his opportunity cost for attending for one year?

Which question is an illustration of a microeconomic question?

Economic growth is shown by a shift of the production possibilities curve outward and to the right.

Macroeconomics is the study of economics from the standpoint of:

When an economy is at full employment and full production,more of any one product:

A movement along the production possibilities curve would imply that:

The opportunity cost of a new national park is the:

The production possibilities curve represents which of the following?

Opportunity cost is best defined as:

From an economic perspective,when a student decides to attend another year of college,the student has concluded that the marginal:

In a production possibilities table,the most-valued or optimal point for society is determined by:

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

Exam 1: Limits, Alternatives, and Choices

The production possibility curve:

Economics can best be described as the study of:

The production possibilities curve bows outward from the origin because:

By using the same ceteris paribus assumptions,economic principles are just as certain and precise as those of the laboratory sciences.

Refer to the above production possibilities curves.Curve (a)is the current curve for the economy.Other things being equal,society's current choice of point P on curve (a)will:

Refer to the above graph.The selection of which point on the production possibilities curve is most like to result in the largest increase in economic growth over time?

The economizing problem arises from the conflict between having relatively unlimited resources and relatively limited wants.

Suppose there are two economies,Alpha and Beta,which have the same production possibilities curves and are on the same point on each curve.If Beta then devotes more resources to investment goods than consumer goods when compared to Alpha,then in the future:

If a nation is incurring a trade deficit (it is buying more from abroad-importing,than it is selling abroad-exporting),then it is most likely producing beyond the frontier of its production possibilities curve.

After graduating from high school,Ron Willis plans to go to college.The college tuition is $15,000 a year.But,instead of going to college,Ron could take a full-time job paying $20,000.If Ron decides to go to college,what is his opportunity cost for attending for one year?

Which question is an illustration of a microeconomic question?

Economic growth is shown by a shift of the production possibilities curve outward and to the right.

Macroeconomics is the study of economics from the standpoint of:

When an economy is at full employment and full production,more of any one product:

A movement along the production possibilities curve would imply that:

The opportunity cost of a new national park is the:

The production possibilities curve represents which of the following?

Opportunity cost is best defined as:

From an economic perspective,when a student decides to attend another year of college,the student has concluded that the marginal:

In a production possibilities table,the most-valued or optimal point for society is determined by:

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