Question 1

What does the slope of the production possibilities curve represent? Explain.

Accepted Answer

It represents the trade-off between two

Question 2

$$\begin{array}{l}
\text { Possibility }\
\begin{array} { l r r r r r r r } 
\hline \text { Good } & \text { A } & \text { B } & \text { C } & \text { D } & \text { E } & \text { F } & \text { G } \
\hline \text { Televisions } & 21 & 20 & 18 & 15 & 11 & 6 & 0 \
\text { Personal computers } & 0 & 1 & 2 & 3 & 4 & 5 & 6\\hline
\end{array}
\end{array}$$
-According to the above table,the opportunity cost of each additional computer in terms of televisions

Accepted Answer

A) remains constant. 
B) falls as more computers are produced. 
C) increases as more computers are produced. 
D) is meaningless because the cost of computers cannot be expressed in terms of televisions. 
A) remains constant. 
B) falls as more computers are produced. 
C) increases as more computers are produced. 
D) is meaningless because the cost of computers cannot be expressed in terms of televisions.

Question 3

The reason that most of the coffee that is consumed in the United States comes from Colombia is that

Accepted Answer

A) Colombia has an absolute advantage in producing coffee relative to the United States. 
B) Colombia has a comparative advantage in producing coffee relative to the United States. 
C) coffee cannot be grown in the United States. 
D) government trade disincentives regarding Colombian coffee make such trade possible. 
A) Colombia has an absolute advantage in producing coffee relative to the United States. 
B) Colombia has a comparative advantage in producing coffee relative to the United States. 
C) coffee cannot be grown in the United States. 
D) government trade disincentives regarding Colombian coffee make such trade possible.

Question 4

Which of the following is NOT an economic good?

Accepted Answer

A) a haircut 
B) broccoli 
C) a sunset 
D) education 
A) a haircut 
B) broccoli 
C) a sunset 
D) education

Question 5

Which of the following is the LEAST scarce?

Accepted Answer

A) college education 
B) medicine 
C) housing 
D) air 
A) college education 
B) medicine 
C) housing 
D) air

Question 6

The production possibilities curve bows outward because

Accepted Answer

A) opportunity costs are decreasing as the production of a good increases. 
B) opportunity costs are increasing as the production of a good increases. 
C) opportunity costs are fixed as the production of a good increases. 
D) resources are of uniform quality. 
A) opportunity costs are decreasing as the production of a good increases. 
B) opportunity costs are increasing as the production of a good increases. 
C) opportunity costs are fixed as the production of a good increases. 
D) resources are of uniform quality.

Question 7

How would you illustrate economic growth with the production possibilities curve? Explain.

Accepted Answer

Economic growth can be illustr

Question 8

When nations specialize in their areas of comparative advantage and then trade with the rest of the world,the result is that

Accepted Answer

A) the average standard of living in the world will go down. 
B) the average standard of living in the world will go up. 
C) the world will move from a point on the production possibilities curve to a point inside the curve. 
D) worldwide economic efficiency will decrease. 
A) the average standard of living in the world will go down. 
B) the average standard of living in the world will go up. 
C) the world will move from a point on the production possibilities curve to a point inside the curve. 
D) worldwide economic efficiency will decrease.

Question 9

If a country's production possibilities curve gets more bowed out over time,it is an indication that

Accepted Answer

A) technological change has taken place. 
B) society is learning to use its resources more efficiently. 
C) the quantity of labor and capital have increased. 
D) resources have become more highly specialized. 
A) technological change has taken place. 
B) society is learning to use its resources more efficiently. 
C) the quantity of labor and capital have increased. 
D) resources have become more highly specialized.

Question 10

You should specialize in the production of a good if you have

Accepted Answer

A) an absolute advantage. 
B) more capital resources than your trading partner. 
C) more human resources than your trading partner. 
D) a comparative advantage. 
A) an absolute advantage. 
B) more capital resources than your trading partner. 
C) more human resources than your trading partner. 
D) a comparative advantage.

Question 11

Scarcity is

Accepted Answer

A) a shortage of goods and services. 
B) poverty and misery. 
C) a situation in which the resources for producing the goods and services that people desire are sufficient to satisfy people's desires. 
D) a situation in which the resources required to produce the goods and services that people desire are insufficient to satisfy all wants. 
A) a shortage of goods and services. 
B) poverty and misery. 
C) a situation in which the resources for producing the goods and services that people desire are sufficient to satisfy people's desires. 
D) a situation in which the resources required to produce the goods and services that people desire are insufficient to satisfy all wants.

Question 12

-Refer to the above figure.Which of the following statements is true?

Accepted Answer

A) Panel A does not represent an economy that is producing efficiently while Panel B does. 
B) Panel A represents an economy that has a lower level of technology than Panel B. 
C) Opportunity costs do not apply to Panel A but apply to Panel B. 
D) In Panel A,equal amounts of Y must be given up to obtain equal increments of X while in Panel B increasingly greater amounts of Y must be given up to obtain equal increments of X. 
A) Panel A does not represent an economy that is producing efficiently while Panel B does. 
B) Panel A represents an economy that has a lower level of technology than Panel B. 
C) Opportunity costs do not apply to Panel A but apply to Panel B. 
D) In Panel A,equal amounts of Y must be given up to obtain equal increments of X while in Panel B increasingly greater amounts of Y must be given up to obtain equal increments of X.

Question 13

Other things being equal,you can make $20,000 a year teaching,$25,000 a year typing,$30,000 a year driving a cab,and $40,000 a year as a chef.You have a comparative advantage in

Accepted Answer

A) teaching. 
B) driving a cab. 
C) being a chef. 
D) one of them but we need more information to know which. 
A) teaching. 
B) driving a cab. 
C) being a chef. 
D) one of them but we need more information to know which.

Question 14

Scarcity and shortages differ in that

Accepted Answer

A) scarcity is caused by natural disasters and shortages are caused by mistakes people make. 
B) scarcity is a condition of human life while shortages are usually temporary phenomena related to an imbalance between the amount desired and the amount produced. 
C) scarcity is a type of shortage but shortage is a broader concept. 
D) shortages apply to resource markets while scarcity applies to product markets. 
A) scarcity is caused by natural disasters and shortages are caused by mistakes people make. 
B) scarcity is a condition of human life while shortages are usually temporary phenomena related to an imbalance between the amount desired and the amount produced. 
C) scarcity is a type of shortage but shortage is a broader concept. 
D) shortages apply to resource markets while scarcity applies to product markets.

Question 15

Which of the following is NOT an economic resource?

Accepted Answer

A) Money 
B) Low-skilled labor 
C) Coal 
D) An engineer 
A) Money 
B) Low-skilled labor 
C) Coal 
D) An engineer

Question 16

The law of increasing additional cost exists because

Accepted Answer

A) resources are not perfectly adaptable to both production processes. 
B) the demand for the product increases. 
C) the cost of resources of the products increase. 
D) the cost of resources of the products decrease. 
A) resources are not perfectly adaptable to both production processes. 
B) the demand for the product increases. 
C) the cost of resources of the products increase. 
D) the cost of resources of the products decrease.

Question 17

The opportunity cost of a decision is the

Accepted Answer

A) value of the best alternative not chosen. 
B) value of all the alternatives not chosen. 
C) cost of making the wrong choice. 
D) cost incurred by others who are unhappy with your decision. 
A) value of the best alternative not chosen. 
B) value of all the alternatives not chosen. 
C) cost of making the wrong choice. 
D) cost incurred by others who are unhappy with your decision.

Question 18

If the production of capital goods is shown along the horizontal axis of a production possibilities curve,and the production of consumer goods is shown along the vertical axis of a production possibilities curve,and the economy desires to have a rapid rate of economic growth,then the economy should produce at a point

Accepted Answer

A) near the middle of the curve dividing resources equally between the production of consumer and capital goods. 
B) at a point near the vertical axis concentrating on the production of consumer goods. 
C) at a point near the horizontal axis concentrating on the production of capital goods. 
D) at a point inside the curve allowing the economy to adjust rapidly to changes in economic activity. 
A) near the middle of the curve dividing resources equally between the production of consumer and capital goods. 
B) at a point near the vertical axis concentrating on the production of consumer goods. 
C) at a point near the horizontal axis concentrating on the production of capital goods. 
D) at a point inside the curve allowing the economy to adjust rapidly to changes in economic activity.

Question 19

Specialization occurs because

Accepted Answer

A) society trades current consumption for future consumption. 
B) the production possibilities curve tends to be linear. 
C) people have different skills. 
D) society produces made the production possibilities curve. 
A) society trades current consumption for future consumption. 
B) the production possibilities curve tends to be linear. 
C) people have different skills. 
D) society produces made the production possibilities curve.

Question 20

A production point that lies outside the Production Possibilities Curve (PPC)

Accepted Answer

A) denotes inefficiency. 
B) indicates unemployment. 
C) is currently not attainable. 
D) can never be reached,even in future periods. 
A) denotes inefficiency. 
B) indicates unemployment. 
C) is currently not attainable. 
D) can never be reached,even in future periods.

What does the slope of the production possibilities curve represent? Explain.

Possibility Good A B C D E F G Televisions 21 20 18 15 11 6 0 Personal computers 0 1 2 3 4 5 6 -According to the above table,the opportunity cost of each additional computer in terms of televisions

The reason that most of the coffee that is consumed in the United States comes from Colombia is that

Which of the following is NOT an economic good?

Which of the following is the LEAST scarce?

The production possibilities curve bows outward because

How would you illustrate economic growth with the production possibilities curve? Explain.

When nations specialize in their areas of comparative advantage and then trade with the rest of the world,the result is that

If a country's production possibilities curve gets more bowed out over time,it is an indication that

You should specialize in the production of a good if you have

Scarcity is

-Refer to the above figure.Which of the following statements is true?

Other things being equal,you can make $20,000 a year teaching,$25,000 a year typing,$30,000 a year driving a cab,and $40,000 a year as a chef.You have a comparative advantage in

Scarcity and shortages differ in that

Which of the following is NOT an economic resource?

The law of increasing additional cost exists because

The opportunity cost of a decision is the

Specialization occurs because

A production point that lies outside the Production Possibilities Curve (PPC)

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

What does the slope of the production possibilities curve represent? Explain.

Possibility Good A B C D E F G Televisions 21 20 18 15 11 6 0 Personal computers 0 1 2 3 4 5 6 -According to the above table,the opportunity cost of each additional computer in terms of televisions

The reason that most of the coffee that is consumed in the United States comes from Colombia is that

Which of the following is NOT an economic good?

Which of the following is the LEAST scarce?

The production possibilities curve bows outward because

How would you illustrate economic growth with the production possibilities curve? Explain.

When nations specialize in their areas of comparative advantage and then trade with the rest of the world,the result is that

If a country's production possibilities curve gets more bowed out over time,it is an indication that

You should specialize in the production of a good if you have

Scarcity is

-Refer to the above figure.Which of the following statements is true?

Other things being equal,you can make $20,000 a year teaching,$25,000 a year typing,$30,000 a year driving a cab,and $40,000 a year as a chef.You have a comparative advantage in

Scarcity and shortages differ in that

Which of the following is NOT an economic resource?

The law of increasing additional cost exists because

The opportunity cost of a decision is the

Specialization occurs because

A production point that lies outside the Production Possibilities Curve (PPC)

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