Question 1

If an economy produces only steel and wheat,a new fertilizer will

Accepted Answer

A) cause the production of wheat to increase at every point on a production possibilities curve but not affect the production of steel,that is the curve moves outward on the wheat axis only. 
B) cause the production of both wheat and steel to increase at every point along the production possibilities curve,that is the curve moves outward on both the wheat axis and the steel axis. 
C) not affect the production of either wheat or steel. 
D) cause the production of steel to increase at every point along the production possibilities curve but not affect the production of wheat,that is the curve moves outward on the steel axis only. 
A) cause the production of wheat to increase at every point on a production possibilities curve but not affect the production of steel,that is the curve moves outward on the wheat axis only. 
B) cause the production of both wheat and steel to increase at every point along the production possibilities curve,that is the curve moves outward on both the wheat axis and the steel axis. 
C) not affect the production of either wheat or steel. 
D) cause the production of steel to increase at every point along the production possibilities curve but not affect the production of wheat,that is the curve moves outward on the steel axis only.

Question 2

The production possibilities curve represents

Accepted Answer

A) the total amount of stocks and bonds that exist in the economy. 
B) the trade-off between human capital and physical capital that exists. 
C) all possible combinations of total output that can be produced. 
D) society's needs. 
A) the total amount of stocks and bonds that exist in the economy. 
B) the trade-off between human capital and physical capital that exists. 
C) all possible combinations of total output that can be produced. 
D) society's needs.

Question 3

-Refer to the above figure.How do you describe what is happening as the economy moves from point C to point B?

Accepted Answer

A) Previously unemployed resources are now being devoted to the production of wool. 
B) Previously unemployed resources are now being devoted to the production of bread. 
C) The economy has increased its wool production by 30 bales at an opportunity cost of 250 loaves of bread. 
D) The economy has acquired new resources for making bread. 
A) Previously unemployed resources are now being devoted to the production of wool. 
B) Previously unemployed resources are now being devoted to the production of bread. 
C) The economy has increased its wool production by 30 bales at an opportunity cost of 250 loaves of bread. 
D) The economy has acquired new resources for making bread.

Question 4

With specialization,

Accepted Answer

A) opportunity costs tend to be constant. 
B) there are greater gains in material well being. 
C) there is more emphasis on self-reliance. 
D) society is more productive while individuals are less productive. 
A) opportunity costs tend to be constant. 
B) there are greater gains in material well being. 
C) there is more emphasis on self-reliance. 
D) society is more productive while individuals are less productive.

Question 5

Division of labor

Accepted Answer

A) increases the amount of capital in the economy. 
B) leads to an increase in the amount of output in the economy. 
C) makes economic goods possible. 
D) is not possible for service goods. 
A) increases the amount of capital in the economy. 
B) leads to an increase in the amount of output in the economy. 
C) makes economic goods possible. 
D) is not possible for service goods.

Question 6

-Refer to the above figure.A farmer has 50 acres of land on which to grow wheat or beans.An acre of land yields 400 bushels of beans or 800 bushels of wheat.Which of the following is a possible combination of beans and wheat that can be grown,assuming the land is farmed efficiently?

Accepted Answer

A) 30,000 bushels of each 
B) 15,000 bushels of beans and 10,000 bushels of wheat 
C) 25,000 bushels of beans and 25,000 bushels of wheat 
D) 20,000 bushels of beans and 40,000 bushels of wheat 
A) 30,000 bushels of each 
B) 15,000 bushels of beans and 10,000 bushels of wheat 
C) 25,000 bushels of beans and 25,000 bushels of wheat 
D) 20,000 bushels of beans and 40,000 bushels of wheat

Question 7

Opportunity cost is illustrated on the production possibilities curve by a

Accepted Answer

A) bowed-out shape of the curve. 
B) shift to the right of the curve. 
C) shift to the left of the curve. 
D) movement along the curve. 
A) bowed-out shape of the curve. 
B) shift to the right of the curve. 
C) shift to the left of the curve. 
D) movement along the curve.

Question 8

Which of the following is a true statement?

Accepted Answer

A) Cost is always measured in the nation's currency. 
B) Opportunity cost is an objective measure since the cost of an activity is the same for everyone. 
C) The less alternatives there are the greater the cost. 
D) Opportunity cost is always a foregone opportunity. 
A) Cost is always measured in the nation's currency. 
B) Opportunity cost is an objective measure since the cost of an activity is the same for everyone. 
C) The less alternatives there are the greater the cost. 
D) Opportunity cost is always a foregone opportunity.

Question 9

Look at the following production possibilities table for smartphones and tablets.The table shows the maximum combination of smartphones and tablets of corn that can be produced,when all resources are fully employed.
$$\begin{array} { l r r r r r } 
& \text { Production Possibilities  } \
\text { Good } & \text { A } & \text { B } & \text { C } & \text { D } & \text { E } \
& & & & & \
\hline \text { Smartphones } & 10 & 20 & 30 & 40 & 50 \
\text { Tablets } & 150 & 140 & 120 & 90 & 50 \
\hline
\end{array}$$
Based on the above information,

Accepted Answer

A) there is no trade-off between smartphones and tablets. 
B) the opportunity cost of producing 30 instead of 20 smartphones is 120 tablets. 
C) the opportunity cost of producing 40 instead of 30 smartphones is 30 tablets. 
D) the opportunity cost of producing 90 instead of 50 tablets is 50 smartphones. 
A) there is no trade-off between smartphones and tablets. 
B) the opportunity cost of producing 30 instead of 20 smartphones is 120 tablets. 
C) the opportunity cost of producing 40 instead of 30 smartphones is 30 tablets. 
D) the opportunity cost of producing 90 instead of 50 tablets is 50 smartphones.

Question 10

Scarcity implies that people must

Accepted Answer

A) be miserable. 
B) be selfish. 
C) make choices. 
D) not be selfish. 
A) be miserable. 
B) be selfish. 
C) make choices. 
D) not be selfish.

Question 11

Whenever a society forgoes current consumption to invest in capital goods,

Accepted Answer

A) it will have less to consume next year. 
B) it will be easier for that society to consume less in the future because people will become accustomed to less. 
C) that society can consume more in the future. 
D) it will be forced to produce fewer capital goods in the future. 
A) it will have less to consume next year. 
B) it will be easier for that society to consume less in the future because people will become accustomed to less. 
C) that society can consume more in the future. 
D) it will be forced to produce fewer capital goods in the future.

Question 12

Comparative advantage is

Accepted Answer

A) when a country can produce a good at a lower opportunity cost compared to other countries. 
B) when a country can produce all goods more quickly than any other country. 
C) when the production possibilities curve shifts outward to the right. 
D) only for individuals and not countries. 
A) when a country can produce a good at a lower opportunity cost compared to other countries. 
B) when a country can produce all goods more quickly than any other country. 
C) when the production possibilities curve shifts outward to the right. 
D) only for individuals and not countries.

Question 13

Which of the following is TRUE about comparative advantage?

Accepted Answer

A) Comparative advantage explains trade among nations,but not within nations. 
B) Comparative advantage explains trade within nations,but not among nations. 
C) Comparative advantage explains trade within nations and among nations. 
D) Comparative advantage has nothing to do with trade among nations; it only is concerned with specialization within a firm. 
A) Comparative advantage explains trade among nations,but not within nations. 
B) Comparative advantage explains trade within nations,but not among nations. 
C) Comparative advantage explains trade within nations and among nations. 
D) Comparative advantage has nothing to do with trade among nations; it only is concerned with specialization within a firm.

Question 14

Human beings

Accepted Answer

A) have unlimited wants. 
B) think they have unlimited wants,but really have limited needs. 
C) have limited wants,but unlimited needs. 
D) know what their needs are,but do not know what their wants are. 
A) have unlimited wants. 
B) think they have unlimited wants,but really have limited needs. 
C) have limited wants,but unlimited needs. 
D) know what their needs are,but do not know what their wants are.

Question 15

-In the above figure,what is the opportunity cost of one bushel of corn?

Accepted Answer

A) 1 bushel of soybeans 
B) 0.5 bushel of soybeans 
C) 2 bushels of soybeans 
D) unable to determine 
A) 1 bushel of soybeans 
B) 0.5 bushel of soybeans 
C) 2 bushels of soybeans 
D) unable to determine

Question 16

Explain the difference between human needs and wants.

Accepted Answer

Needs are objectively undefinable.Needs

Question 17

All of the following are resources EXCEPT

Accepted Answer

A) doctors because they perform services. 
B) the land the Statue of Liberty sits on. 
C) the computer in the student computer lab. 
D) money. 
A) doctors because they perform services. 
B) the land the Statue of Liberty sits on. 
C) the computer in the student computer lab. 
D) money.

Question 18

A bowed-outward production possibilities curve demonstrates the concept of

Accepted Answer

A) constant opportunity costs as production shifts from the production of one good to the production of the other good. 
B) decreasing opportunity costs as production shifts from the production of one good to the production of the other good. 
C) increasing opportunity costs as production shifts from the production of one good to the production of the other good. 
D) increasing opportunity costs at first but the opportunity costs steadily decrease as you move down along the curve. 
A) constant opportunity costs as production shifts from the production of one good to the production of the other good. 
B) decreasing opportunity costs as production shifts from the production of one good to the production of the other good. 
C) increasing opportunity costs as production shifts from the production of one good to the production of the other good. 
D) increasing opportunity costs at first but the opportunity costs steadily decrease as you move down along the curve.

Question 19

An efficient point of production is

Accepted Answer

A) a point on the production possibilities curve. 
B) a point inside the production possibilities curve. 
C) the point where scarcity no longer exists. 
D) the point where we are currently producing. 
A) a point on the production possibilities curve. 
B) a point inside the production possibilities curve. 
C) the point where scarcity no longer exists. 
D) the point where we are currently producing.

Question 20

Which of the following items would be considered scarce?

Accepted Answer

A) water 
B) diamonds 
C) potato chips 
D) All of the above are scarce. 
A) water 
B) diamonds 
C) potato chips 
D) All of the above are scarce.

If an economy produces only steel and wheat,a new fertilizer will

The production possibilities curve represents

-Refer to the above figure.How do you describe what is happening as the economy moves from point C to point B?

With specialization,

Division of labor

-Refer to the above figure.A farmer has 50 acres of land on which to grow wheat or beans.An acre of land yields 400 bushels of beans or 800 bushels of wheat.Which of the following is a possible combination of beans and wheat that can be grown,assuming the land is farmed efficiently?

Opportunity cost is illustrated on the production possibilities curve by a

Which of the following is a true statement?

Scarcity implies that people must

Whenever a society forgoes current consumption to invest in capital goods,

Comparative advantage is

Which of the following is TRUE about comparative advantage?

Human beings

-In the above figure,what is the opportunity cost of one bushel of corn?

Explain the difference between human needs and wants.

All of the following are resources EXCEPT

A bowed-outward production possibilities curve demonstrates the concept of

An efficient point of production is

Which of the following items would be considered scarce?

The Nature of Economics

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

Demand and Supply Elasticity

Consumer Choice

Rents, profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters

Exam 2: Scarcity and the World of Trade-Offs

If an economy produces only steel and wheat,a new fertilizer will

The production possibilities curve represents

-Refer to the above figure.How do you describe what is happening as the economy moves from point C to point B?

With specialization,

Division of labor

-Refer to the above figure.A farmer has 50 acres of land on which to grow wheat or beans.An acre of land yields 400 bushels of beans or 800 bushels of wheat.Which of the following is a possible combination of beans and wheat that can be grown,assuming the land is farmed efficiently?

Opportunity cost is illustrated on the production possibilities curve by a

Which of the following is a true statement?

Scarcity implies that people must

Whenever a society forgoes current consumption to invest in capital goods,

Comparative advantage is

Which of the following is TRUE about comparative advantage?

Human beings

-In the above figure,what is the opportunity cost of one bushel of corn?

Explain the difference between human needs and wants.

All of the following are resources EXCEPT

A bowed-outward production possibilities curve demonstrates the concept of

An efficient point of production is

Which of the following items would be considered scarce?

The Nature of Economics

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

Demand and Supply Elasticity

Consumer Choice

Rents, profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters