Question 1

-In the above figure,the opportunity cost of moving from point D to point E is

Accepted Answer

A) 75 guitars. 
B) 55 guitars. 
C) 100 ukuleles. 
D) 100 guitars. 
A) 75 guitars. 
B) 55 guitars. 
C) 100 ukuleles. 
D) 100 guitars.

Question 2

A country that must reduce current consumption to increase future consumption possibilities

Accepted Answer

A) must be allocating resources inefficiently. 
B) must be producing along the production possibilities curve. 
C) must be producing outside the production possibilities curve. 
D) must not have private ownership of property. 
A) must be allocating resources inefficiently. 
B) must be producing along the production possibilities curve. 
C) must be producing outside the production possibilities curve. 
D) must not have private ownership of property.

Question 3

There are not enough of four goods to satisfy the wants of people.For good A,this is true when the price is $100.This is true for good B at a price of $10,for good C at a price of $1,and for good D at a price of zero.Which situation reflects scarcity rather than shortage?

Accepted Answer

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

Question 4

Distinguish the concepts of comparative advantage and absolute advantage.

Accepted Answer

Comparative advantage is the ability to

Question 5

A friend says,"I really,really need a new car." As an economist,you're thinking

Accepted Answer

A) Right! Everyone needs a new car. 
B) This is an example of how objectively undefinable needs are.Many would argue that this friend could get along just fine with a reliable used car. 
C) If this friend says she needs a new car,then we must all agree that a new car is a need and not just a want. 
D) that a new car can only be considered a need if at least 51% of the public agrees. 
A) Right! Everyone needs a new car. 
B) This is an example of how objectively undefinable needs are.Many would argue that this friend could get along just fine with a reliable used car. 
C) If this friend says she needs a new car,then we must all agree that a new car is a need and not just a want. 
D) that a new car can only be considered a need if at least 51% of the public agrees.

Question 6

Why is efficiency desirable?

Accepted Answer

A) It results in an equal distribution of income. 
B) It results in zero unemployment. 
C) It makes best use of the finite resources we have. 
D) It is the most politically popular solution. 
A) It results in an equal distribution of income. 
B) It results in zero unemployment. 
C) It makes best use of the finite resources we have. 
D) It is the most politically popular solution.

Question 7

The value of the best alternative sacrificed to obtain something you want is referred to as

Accepted Answer

A) explicit cost. 
B) opportunity cost. 
C) marginal cost. 
D) sunk cost. 
A) explicit cost. 
B) opportunity cost. 
C) marginal cost. 
D) sunk cost.

Question 8

A production possibilities curve will shift inward

Accepted Answer

A) when the unemployment rate increases. 
B) when production is inefficient. 
C) when resources are expanding. 
D) when a war destroys the capital goods of a country. 
A) when the unemployment rate increases. 
B) when production is inefficient. 
C) when resources are expanding. 
D) when a war destroys the capital goods of a country.

Question 9

-In the above figure,the combination of computers and televisions shown by point x

Accepted Answer

A) is not attainable at the point in time for which the graph is drawn. 
B) can be attained only if some of society's resources are unemployed. 
C) suggests that the law of increasing relative costs does not hold. 
D) results only because society allocates its resources inefficiently. 
A) is not attainable at the point in time for which the graph is drawn. 
B) can be attained only if some of society's resources are unemployed. 
C) suggests that the law of increasing relative costs does not hold. 
D) results only because society allocates its resources inefficiently.

Question 10

Scarcity implies that

Accepted Answer

A) the satisfaction of one person's want means another person's want can also be satisfied. 
B) the satisfaction of one person's want means another person will be more than satisfied. 
C) the satisfaction of one person's want means another person's want cannot be satisfied. 
D) no person's wants can be satisfied. 
A) the satisfaction of one person's want means another person's want can also be satisfied. 
B) the satisfaction of one person's want means another person will be more than satisfied. 
C) the satisfaction of one person's want means another person's want cannot be satisfied. 
D) no person's wants can be satisfied.

Question 11

If a country is currently producing inside its production possibilities curve,

Accepted Answer

A) it can increase the production of both goods by putting unemployed resources to work. 
B) it can increase the production of one of the goods only if it reduces the production of the other good. 
C) it is experiencing efficient production of one good but not the other. 
D) None of the above are correct. 
A) it can increase the production of both goods by putting unemployed resources to work. 
B) it can increase the production of one of the goods only if it reduces the production of the other good. 
C) it is experiencing efficient production of one good but not the other. 
D) None of the above are correct.

Question 12

Education and training of workers would best be categorized as

Accepted Answer

A) land. 
B) labor. 
C) physical capital. 
D) human capital. 
A) land. 
B) labor. 
C) physical capital. 
D) human capital.

Question 13

-Refer to the above figure.Which one of the following statements is true with regard to the economy depicted in the graph?

Accepted Answer

A) Point C cannot be produced. 
B) The best production point is 500 loaves of bread and 50 bales of wool. 
C) The total amount of resources it takes to produce 20 bales of wool and 500 loaves of bread is more than the amount of resources needed to produce 50 bales of wool and 250 loaves of bread. 
D) The total amount of resources it takes to produce 20 bales of wool and 500 loaves of bread is the same as the amount of resources needed to produce 50 bales of wool and 250 loaves of bread. 
A) Point C cannot be produced. 
B) The best production point is 500 loaves of bread and 50 bales of wool. 
C) The total amount of resources it takes to produce 20 bales of wool and 500 loaves of bread is more than the amount of resources needed to produce 50 bales of wool and 250 loaves of bread. 
D) The total amount of resources it takes to produce 20 bales of wool and 500 loaves of bread is the same as the amount of resources needed to produce 50 bales of wool and 250 loaves of bread.

Question 14

A straight-line production possibilities curve takes this shape because

Accepted Answer

A) the opportunity cost of producing a good is constant. 
B) the opportunity cost of producing more of a good is decreasing. 
C) resources are better suited for producing one output than another. 
D) resources are fixed. 
A) the opportunity cost of producing a good is constant. 
B) the opportunity cost of producing more of a good is decreasing. 
C) resources are better suited for producing one output than another. 
D) resources are fixed.

Question 15

$$\begin{array} { l c c c c r } 
& \text { A } & \text { B } & \text { C } & \text { D } & \text { E } \
\hline \text { Pizza (Pies) } & 0 & 30 & 60 & 90 & 120 \
\text { Bread (Loaves) } & 300 & 240 & 180 & 120 & 60 \
\hline
\end{array}$$ The above table shows the daily production possibilities for a bakery.
Currently the bakery bakes 60 pizzas and 180 loaves of bread,that is-it is at alternative C.
-Using the above table,moving from alternative C to alternative B,what is the opportunity cost of one loaf of bread?

Accepted Answer

A) 1 pizza pie 
B) 30 pizza pies 
C) 2 pizza pies 
D) 0.5 pizza pie 
A) 1 pizza pie 
B) 30 pizza pies 
C) 2 pizza pies 
D) 0.5 pizza pie

Question 16

In economics,the term physical capital

Accepted Answer

A) refers to funds used by businesses to acquire goods and services. 
B) refers to all manufactured resources used for production. 
C) refers to the process of raising funds through the stock market. 
D) defines the stock of merchandise already produced. 
A) refers to funds used by businesses to acquire goods and services. 
B) refers to all manufactured resources used for production. 
C) refers to the process of raising funds through the stock market. 
D) defines the stock of merchandise already produced.

Question 17

In economics,physical capital includes

Accepted Answer

A) money. 
B) bank accounts. 
C) machinery. 
D) shares of stock. 
A) money. 
B) bank accounts. 
C) machinery. 
D) shares of stock.

Question 18

Extremely cold winter weather has destroyed oranges in Florida.The freeze has caused

Accepted Answer

A) scarcity because there are less oranges now than people want. 
B) scarcity because people have to switch to other types of citrus fruits. 
C) a shortage because people cannot obtain as many oranges as they wish to buy at the pre-freeze price. 
D) a shortage because the orange growers will have less income. 
A) scarcity because there are less oranges now than people want. 
B) scarcity because people have to switch to other types of citrus fruits. 
C) a shortage because people cannot obtain as many oranges as they wish to buy at the pre-freeze price. 
D) a shortage because the orange growers will have less income.

Question 19

Economic goods are

Accepted Answer

A) abundant goods,about which we must constantly make decisions about their best use. 
B) all imaginable items from which individuals derive satisfaction or happiness. 
C) goods that are scarce,for which the quantity demanded exceeds the quantity supplied at a zero price. 
D) goods that are scarce,for which the quantity demanded exceeds the quantity supplied at any price. 
A) abundant goods,about which we must constantly make decisions about their best use. 
B) all imaginable items from which individuals derive satisfaction or happiness. 
C) goods that are scarce,for which the quantity demanded exceeds the quantity supplied at a zero price. 
D) goods that are scarce,for which the quantity demanded exceeds the quantity supplied at any price.

Question 20

How is economic growth shown by the production possibilities curve?

Accepted Answer

A) By shifting the curve to the right. 
B) By moving the curve to the left. 
C) By moving up the existing curve. 
D) By changing the shape of the curve from a straight line to one that is bowed. 
A) By shifting the curve to the right. 
B) By moving the curve to the left. 
C) By moving up the existing curve. 
D) By changing the shape of the curve from a straight line to one that is bowed.

-In the above figure,the opportunity cost of moving from point D to point E is

A country that must reduce current consumption to increase future consumption possibilities

There are not enough of four goods to satisfy the wants of people.For good A,this is true when the price is $100.This is true for good B at a price of $10,for good C at a price of $1,and for good D at a price of zero.Which situation reflects scarcity rather than shortage?

Distinguish the concepts of comparative advantage and absolute advantage.

A friend says,"I really,really need a new car." As an economist,you're thinking

Why is efficiency desirable?

The value of the best alternative sacrificed to obtain something you want is referred to as

A production possibilities curve will shift inward

-In the above figure,the combination of computers and televisions shown by point x

Scarcity implies that

If a country is currently producing inside its production possibilities curve,

Education and training of workers would best be categorized as

-Refer to the above figure.Which one of the following statements is true with regard to the economy depicted in the graph?

A straight-line production possibilities curve takes this shape because

In economics,the term physical capital

In economics,physical capital includes

Extremely cold winter weather has destroyed oranges in Florida.The freeze has caused

Economic goods are

How is economic growth shown by the production possibilities curve?

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

-In the above figure,the opportunity cost of moving from point D to point E is

A country that must reduce current consumption to increase future consumption possibilities

There are not enough of four goods to satisfy the wants of people.For good A,this is true when the price is $100.This is true for good B at a price of $10,for good C at a price of $1,and for good D at a price of zero.Which situation reflects scarcity rather than shortage?

Distinguish the concepts of comparative advantage and absolute advantage.

A friend says,"I really,really need a new car." As an economist,you're thinking

Why is efficiency desirable?

The value of the best alternative sacrificed to obtain something you want is referred to as

A production possibilities curve will shift inward

-In the above figure,the combination of computers and televisions shown by point x

Scarcity implies that

If a country is currently producing inside its production possibilities curve,

Education and training of workers would best be categorized as

-Refer to the above figure.Which one of the following statements is true with regard to the economy depicted in the graph?

A straight-line production possibilities curve takes this shape because

In economics,the term physical capital

In economics,physical capital includes

Extremely cold winter weather has destroyed oranges in Florida.The freeze has caused

Economic goods are

How is economic growth shown by the production possibilities curve?

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