Question 1

A person has a comparative advantage in an activity whenever she

Accepted Answer

A) has an absolute advantage in the activity. 
B) can perform the activity at a lower opportunity cost than another person can. 
C) can do the activity in less time than anyone else. 
D) can do everything better than anyone else. 
A) has an absolute advantage in the activity. 
B) can perform the activity at a lower opportunity cost than another person can. 
C) can do the activity in less time than anyone else. 
D) can do everything better than anyone else.

Question 2

Comparative advantage implies choosing the activity that

Accepted Answer

A) has a high opportunity cost. 
B) is inside the production possibilities frontier. 
C) has the lowest opportunity cost. 
D) does not demand any specialization. 
A) has a high opportunity cost. 
B) is inside the production possibilities frontier. 
C) has the lowest opportunity cost. 
D) does not demand any specialization.

Question 3

In constructing a production possibilities curve,all of the following are assumed EXCEPT

Accepted Answer

A) resources are fully employed. 
B) the quantity and quality of resources being used is fixed. 
C) the state of technology is improving. 
D) the time period involved is fixed. 
A) resources are fully employed. 
B) the quantity and quality of resources being used is fixed. 
C) the state of technology is improving. 
D) the time period involved is fixed.

Question 4

The opportunity cost of going to college for a student receiving a scholarship

Accepted Answer

A) is the income that she would have earned if she did not go to college. 
B) is the risk of dropping out. 
C) is the food and living expenses that she has to purchase while in college. 
D) is zero because she does not have to pay tuition. 
A) is the income that she would have earned if she did not go to college. 
B) is the risk of dropping out. 
C) is the food and living expenses that she has to purchase while in college. 
D) is zero because she does not have to pay tuition.

Question 5

Scarcity exists because

Accepted Answer

A) the majority of people in the world are poor. 
B) people are too greedy and refuse to share what they have with others. 
C) human wants exceed what can be produced with the limited resources available. 
D) not enough new technology is being used to eliminate scarcity. 
A) the majority of people in the world are poor. 
B) people are too greedy and refuse to share what they have with others. 
C) human wants exceed what can be produced with the limited resources available. 
D) not enough new technology is being used to eliminate scarcity.

Question 6

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

Accepted Answer

A) 3. 
B) 4. 
C) 2. 
D) 5. 
A) 3. 
B) 4. 
C) 2. 
D) 5.

Question 7

The division of labor refers to

Accepted Answer

A) the separation of blue-collared workers and white-collared workers. 
B) finding the best order of performing tasks. 
C) the separation of workers into union workers and non-union workers. 
D) the assignment of different workers to different tasks. 
A) the separation of blue-collared workers and white-collared workers. 
B) finding the best order of performing tasks. 
C) the separation of workers into union workers and non-union workers. 
D) the assignment of different workers to different tasks.

Question 8

-In the above figure,as more ukuleles are produced,the opportunity cost in terms of guitars is

Accepted Answer

A) decreasing. 
B) increasing. 
C) constant. 
D) zero. 
A) decreasing. 
B) increasing. 
C) constant. 
D) zero.

Question 9

Explain briefly what will likely happen to society if it chooses to produce more capital goods and fewer consumption goods.

Accepted Answer

Because capital goods enable society to

Question 10

Economic bads are items

Accepted Answer

A) for which the produced quantity is less than the amount desired at a positive price. 
B) for which the desired quantity is less than what nature provides at a zero price. 
C) that individuals desire but which receive social disapproval. 
D) that receive social approval but which governments dislike. 
A) for which the produced quantity is less than the amount desired at a positive price. 
B) for which the desired quantity is less than what nature provides at a zero price. 
C) that individuals desire but which receive social disapproval. 
D) that receive social approval but which governments dislike.

Question 11

For a country that produces two goods: Environmental clean-up goods and space program goods.What economic information is contained in its production possibility curve?

Accepted Answer

@#IMG-DLM& The above figure illustrates the produc

Question 12

Human resources that perform the functions of organizing,managing,and assembling the other factors of production are called

Accepted Answer

A) physical capital. 
B) venture capital. 
C) entrepreneurs. 
D) productive capital. 
A) physical capital. 
B) venture capital. 
C) entrepreneurs. 
D) productive capital.

Question 13

Wants

Accepted Answer

A) is another term for needs. 
B) refer to services while needs refer to goods. 
C) is the term used by economists instead of needs because needs are not objectively definable. 
D) are used by economists and refer to the same thing as needs when used by psychologists. 
A) is another term for needs. 
B) refer to services while needs refer to goods. 
C) is the term used by economists instead of needs because needs are not objectively definable. 
D) are used by economists and refer to the same thing as needs when used by psychologists.

Question 14

Division of labor refers to

Accepted Answer

A) dividing tasks up into several subtasks and having one person perform these subtasks in a certain order. 
B) the separation of hourly workers from salaried workers. 
C) assigning different workers to different tasks. 
D) separating union workers from nonunion workers. 
A) dividing tasks up into several subtasks and having one person perform these subtasks in a certain order. 
B) the separation of hourly workers from salaried workers. 
C) assigning different workers to different tasks. 
D) separating union workers from nonunion workers.

Question 15

Steve and Karen decide to attend the same concert when they are each given free tickets to it.We know that

Accepted Answer

A) both bear the same opportunity cost because they are seeing the same thing. 
B) both bear the same opportunity cost because the tickets have the same face value. 
C) both bear an opportunity cost that depends on what each person is giving up to attend the concert. 
D) neither bears an opportunity cost since the tickets were given free to them. 
A) both bear the same opportunity cost because they are seeing the same thing. 
B) both bear the same opportunity cost because the tickets have the same face value. 
C) both bear an opportunity cost that depends on what each person is giving up to attend the concert. 
D) neither bears an opportunity cost since the tickets were given free to them.

Question 16

"Economics deals with human needs." Do you agree or disagree? Why?

Accepted Answer

Disagree.The concept of needs

Question 17

Efficiency is defined as

Accepted Answer

A) the maximum consumption of goods. 
B) the production of goods and services. 
C) production of output at minimum cost. 
D) arriving at one's destination quickly. 
A) the maximum consumption of goods. 
B) the production of goods and services. 
C) production of output at minimum cost. 
D) arriving at one's destination quickly.

Question 18

What causes the production possibility curve to be bowed out?

Accepted Answer

A bowed production possibility curve ind

Question 19

A typical economic good has which one of the following characteristics?

Accepted Answer

A) The desired quantity exceeds the quantity available at a zero price. 
B) The quantity available exceeds the desired quantity at a zero price. 
C) It uses no resources to produce. 
D) It is never scarce. 
A) The desired quantity exceeds the quantity available at a zero price. 
B) The quantity available exceeds the desired quantity at a zero price. 
C) It uses no resources to produce. 
D) It is never scarce.

Question 20

The use of goods and services for personal satisfaction is known as

Accepted Answer

A) the law of increasing relative cost. 
B) specialization. 
C) comparative advantage. 
D) consumption. 
A) the law of increasing relative cost. 
B) specialization. 
C) comparative advantage. 
D) consumption.

Exam 2: Scarcity and the World of Trade-Offs

A person has a comparative advantage in an activity whenever she

Comparative advantage implies choosing the activity that

In constructing a production possibilities curve,all of the following are assumed EXCEPT

The opportunity cost of going to college for a student receiving a scholarship

Scarcity exists because

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 -When the economy moves from point D to E in the above table,the opportunity cost of a computer in terms of televisions is

The division of labor refers to

-In the above figure,as more ukuleles are produced,the opportunity cost in terms of guitars is

Explain briefly what will likely happen to society if it chooses to produce more capital goods and fewer consumption goods.

Economic bads are items

For a country that produces two goods: Environmental clean-up goods and space program goods.What economic information is contained in its production possibility curve?

Human resources that perform the functions of organizing,managing,and assembling the other factors of production are called

Wants

Division of labor refers to

Steve and Karen decide to attend the same concert when they are each given free tickets to it.We know that

"Economics deals with human needs." Do you agree or disagree? Why?

Efficiency is defined as

What causes the production possibility curve to be bowed out?

A typical economic good has which one of the following characteristics?

The use of goods and services for personal satisfaction is known as

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

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