Question 1

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. A

Question 2

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. C

Question 3

If Irene can make either four chairs or one table in an hour and Greg can make either three chairs or two tables in an hour,then

Accepted Answer

A) Irene has the absolute advantage in the production of tables. 
B) Greg has the absolute advantage in the production of chairs. 
C) Irene has the comparative advantage in the production of chairs. 
D) Greg has the comparative advantage in the production of chairs. 
A) Irene has the absolute advantage in the production of tables. 
B) Greg has the absolute advantage in the production of chairs. 
C) Irene has the comparative advantage in the production of chairs. 
D) Greg has the comparative advantage in the production of chairs. C

Question 4

For every choice a person makes it can be assumed that

Accepted Answer

A) the chooser has full knowledge of the situation. 
B) some opportunity cost was involved. 
C) there is a fifty-fifty chance the choice was the wrong one. 
D) a good is involved and satisfaction is gained. 
A) the chooser has full knowledge of the situation. 
B) some opportunity cost was involved. 
C) there is a fifty-fifty chance the choice was the wrong one. 
D) a good is involved and satisfaction is gained.

Question 5

The more society consumes today,

Accepted Answer

A) the more it consumes next year. 
B) the harder it will be to consume less in the future because people will find it hard to adjust to less. 
C) the less society can consume in the future. 
D) the easier it will be to consume less in the future. 
A) the more it consumes next year. 
B) the harder it will be to consume less in the future because people will find it hard to adjust to less. 
C) the less society can consume in the future. 
D) the easier it will be to consume less in the future.

Question 6

Which of the following statements is NOT an assumption underlying the production possibilities curve?

Accepted Answer

A) Resources are fully and efficiently employed. 
B) Technology is fixed. 
C) Production occurs over some specified time period. 
D) The amount of resources available for production can be changed quickly. 
A) Resources are fully and efficiently employed. 
B) Technology is fixed. 
C) Production occurs over some specified time period. 
D) The amount of resources available for production can be changed quickly.

Question 7

-Refer to the above figure.If the farmer is producing 4,000 bushels of beans and 38,000 bushels of wheat,then we know the farmer

Accepted Answer

A) is using resources efficiently. 
B) is producing too much wheat. 
C) is inefficient because point a is the most efficient point on the curve. 
D) must be using more resources than were assumed available in constructing the graph. 
A) is using resources efficiently. 
B) is producing too much wheat. 
C) is inefficient because point a is the most efficient point on the curve. 
D) must be using more resources than were assumed available in constructing the graph.

Question 8

The fact that our wants are unlimited but our resources are limited implies that

Accepted Answer

A) we should limit our wants. 
B) entrepreneurship has failed as an economic system. 
C) we have to make choices. 
D) the only way to make someone better off is to make someone else worse off. 
A) we should limit our wants. 
B) entrepreneurship has failed as an economic system. 
C) we have to make choices. 
D) the only way to make someone better off is to make someone else worse off.

Question 9

The concept of absolute advantage relies on

Accepted Answer

A) the idea of comparative advantage. 
B) the ability to produce more units of an item with a given amount of resources. 
C) the idea of opportunity cost. 
D) the concept of economic efficiency as measured on the production possibility curve. 
A) the idea of comparative advantage. 
B) the ability to produce more units of an item with a given amount of resources. 
C) the idea of opportunity cost. 
D) the concept of economic efficiency as measured on the production possibility curve.

Question 10

The production possibilities curve shifts outward when

Accepted Answer

A) the law of increasing additional cost takes hold. 
B) the economy is producing efficiently. 
C) we produce more consumption goods over productive investment in equipment. 
D) there is an increase in resources or technology. 
A) the law of increasing additional cost takes hold. 
B) the economy is producing efficiently. 
C) we produce more consumption goods over productive investment in equipment. 
D) there is an increase in resources or technology.

Question 11

Opportunity cost is

Accepted Answer

A) the combined value of all the alternatives not selected. 
B) the same thing as the money price of a good. 
C) the value of the next best alternative which was given up. 
D) based on the intrinsic value of the good itself. 
A) the combined value of all the alternatives not selected. 
B) the same thing as the money price of a good. 
C) the value of the next best alternative which was given up. 
D) based on the intrinsic value of the good itself.

Question 12

Which of the following would result in a movement along the production possibilities curve?

Accepted Answer

A) A fall in the unemployment rate 
B) Growth in the capital stock 
C) Population growth 
D) A change in the outputs of two goods that a society chooses to produce 
A) A fall in the unemployment rate 
B) Growth in the capital stock 
C) Population growth 
D) A change in the outputs of two goods that a society chooses to produce

Question 13

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 14

Opportunity costs arise from

Accepted Answer

A) choices. 
B) taxes. 
C) mistakes. 
D) regrets. 
A) choices. 
B) taxes. 
C) mistakes. 
D) regrets.

Question 15

An outward bowed production possibilities curve illustrates

Accepted Answer

A) inefficient production. 
B) the law of increasing additional cost. 
C) a lack of scarcity. 
D) zero opportunity cost of moving from inefficient production to currently unobtainable production. 
A) inefficient production. 
B) the law of increasing additional cost. 
C) a lack of scarcity. 
D) zero opportunity cost of moving from inefficient production to currently unobtainable production.

Question 16

In economics,international trade is based on the existence of

Accepted Answer

A) absolute advantage between countries. 
B) relative advantage between countries. 
C) comparative advantage between countries. 
D) output advantage between countries. 
A) absolute advantage between countries. 
B) relative advantage between countries. 
C) comparative advantage between countries. 
D) output advantage between countries.

Question 17

Opportunity cost is defined as

Accepted Answer

A) the value of the next-best alternative that must be sacrificed to attain a want. 
B) the least-costly means to produce output. 
C) the value of the output currently received by an individual or a corporation. 
D) the return from a given unit of labor. 
A) the value of the next-best alternative that must be sacrificed to attain a want. 
B) the least-costly means to produce output. 
C) the value of the output currently received by an individual or a corporation. 
D) the return from a given unit of labor.

Question 18

-Refer to the above figure.Which of the following points indicates an inefficient use of resources?

Accepted Answer

A) a 
B) d 
C) e 
D) More information is needed to answer the question. 
A) a 
B) d 
C) e 
D) More information is needed to answer the question.

Question 19

The most basic concept of economics is

Accepted Answer

A) self-interest. 
B) scarcity. 
C) demand. 
D) rationality. 
A) self-interest. 
B) scarcity. 
C) demand. 
D) rationality.

Question 20

-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) Starting from point A,this economy does not incur any opportunity cost in producing more bread. 
B) Starting from point A,this economy does not incur any opportunity cost in producing more wool. 
C) In moving from point A to point B,the economy produces 30 additional bales of wool at an opportunity cost of 250 loaves of bread. 
D) In moving from point A to point B,the economy is experiencing economic growth. 
A) Starting from point A,this economy does not incur any opportunity cost in producing more bread. 
B) Starting from point A,this economy does not incur any opportunity cost in producing more wool. 
C) In moving from point A to point B,the economy produces 30 additional bales of wool at an opportunity cost of 250 loaves of bread. 
D) In moving from point A to point B,the economy is experiencing economic growth.

Human beings

Division of labor refers to

If Irene can make either four chairs or one table in an hour and Greg can make either three chairs or two tables in an hour,then

For every choice a person makes it can be assumed that

The more society consumes today,

Which of the following statements is NOT an assumption underlying the production possibilities curve?

-Refer to the above figure.If the farmer is producing 4,000 bushels of beans and 38,000 bushels of wheat,then we know the farmer

The fact that our wants are unlimited but our resources are limited implies that

The concept of absolute advantage relies on

The production possibilities curve shifts outward when

Opportunity cost is

Which of the following would result in a movement along the production possibilities curve?

The law of increasing additional cost exists because

Opportunity costs arise from

An outward bowed production possibilities curve illustrates

In economics,international trade is based on the existence of

Opportunity cost is defined as

-Refer to the above figure.Which of the following points indicates an inefficient use of resources?

The most basic concept of economics is

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

The Nature of Economics

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters

Exam 2: Scarcity and the World of Trade-Offs

Human beings

Division of labor refers to

If Irene can make either four chairs or one table in an hour and Greg can make either three chairs or two tables in an hour,then

For every choice a person makes it can be assumed that

The more society consumes today,

Which of the following statements is NOT an assumption underlying the production possibilities curve?

-Refer to the above figure.If the farmer is producing 4,000 bushels of beans and 38,000 bushels of wheat,then we know the farmer

The fact that our wants are unlimited but our resources are limited implies that

The concept of absolute advantage relies on

The production possibilities curve shifts outward when

Opportunity cost is

Which of the following would result in a movement along the production possibilities curve?

The law of increasing additional cost exists because

Opportunity costs arise from

An outward bowed production possibilities curve illustrates

In economics,international trade is based on the existence of

Opportunity cost is defined as

-Refer to the above figure.Which of the following points indicates an inefficient use of resources?

The most basic concept of economics is

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

The Nature of Economics

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters