Question 1

Goods that are produced now so that they can be used to produce other goods in the future are called:

Accepted Answer

A)  capital goods. 
B)  consumer goods. 
C)  investment goods. 
D)  normal goods. 
E)  opportunity goods. 
A)  capital goods. 
B)  consumer goods. 
C)  investment goods. 
D)  normal goods. 
E)  opportunity goods.

Question 2

Refer to the following figure to answer the next  questions.  
-Which point in the corresponding figure represents a combination of smoothies and milk shakes that society cannot currently produce?

Accepted Answer

A)  point A 
B)  point B 
C)  point C 
D)  point D 
E)  point E 
A)  point A 
B)  point B 
C)  point C 
D)  point D 
E)  point E

Question 3

One reason that economists make assumptions when designing models is to:

Accepted Answer

A)  exclude variables that do not add predictive power to the model. 
B)  make models more like the real world. 
C)  make models more complex. 
D)  increase endogenous factors. 
E)  ensure that all possible factors are included. 
A)  exclude variables that do not add predictive power to the model. 
B)  make models more like the real world. 
C)  make models more complex. 
D)  increase endogenous factors. 
E)  ensure that all possible factors are included.

Question 4

Suppose that Sheldon and Leonard can either run errands or wash dishes. Their maximum output per hour is listed in the following table. Given the same quantity of resources, at what terms of trade (relative price ratio) could they specialize and trade so that both consume outside their own production possibilities frontier (PPF)?

Accepted Answer

A)  1 errand run per 75 dishes washed 
B)  1 errand run per 30 dishes washed 
C)  1 errand run per 12 dishes washed 
D)  1 errand run per 10 dishes washed 
E)  1 errand run per 6 dishes washed 
A)  1 errand run per 75 dishes washed 
B)  1 errand run per 30 dishes washed 
C)  1 errand run per 12 dishes washed 
D)  1 errand run per 10 dishes washed 
E)  1 errand run per 6 dishes washed

Question 5

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the next questions.  
-What is DiNozzo's opportunity cost for solving a crime?

Accepted Answer

A)  20 solved crimes 
B)  30 solved crimes 
C)  5 solved crimes 
D)  1/20 of a boat 
E)  1/10 of a boat 
A)  20 solved crimes 
B)  30 solved crimes 
C)  5 solved crimes 
D)  1/20 of a boat 
E)  1/10 of a boat

Question 6

Specialization and trade allow individuals to:

Accepted Answer

A)  consume outside their own production possibilities frontier (PPF). 
B)  shift their PPF outward. 
C)  produce more goods with less technology. 
D)  eliminate scarcity. 
E)  produce fewer goods with less technology. 
A)  consume outside their own production possibilities frontier (PPF). 
B)  shift their PPF outward. 
C)  produce more goods with less technology. 
D)  eliminate scarcity. 
E)  produce fewer goods with less technology.

Question 7

The movie Saving Private Ryan is about a military mission to find and recover a particular soldier-Private Ryan. The movie is predominantly about how much was given up in an effort to save this one particular soldier. The main economic theme of the movie is:

Accepted Answer

A)  absolute advantage. 
B)  opportunity cost. 
C)  normative analysis. 
D)  comparative advantage. 
E)  positive advantage. 
A)  absolute advantage. 
B)  opportunity cost. 
C)  normative analysis. 
D)  comparative advantage. 
E)  positive advantage.

Question 8

Refer to the accompanying figure to answer the next  questions.  
-Unemployed resources are evident at:

Accepted Answer

A)  point A. 
B)  point B. 
C)  point C. 
D)  point D. 
E)  points B, C, and E. 
A)  point A. 
B)  point B. 
C)  point C. 
D)  point D. 
E)  points B, C, and E.

Question 9

Refer to the following figures to answer the next  questions.  
-Which allocation point in the short-run production possibilities frontier (PPF) will lead to NO GROWTH in the long-run PPF?

Accepted Answer

A)  point A 
B)  point B 
C)  point C 
D)  point D 
E)  point E 
A)  point A 
B)  point B 
C)  point C 
D)  point D 
E)  point E

Question 10

Which of the following is a positive statement?

Accepted Answer

A)  My dog should lose some weight. 
B)  Legally requiring dogs to have rabies shots will reduce the number of rabid dogs. 
C)  You should take your dog to the veterinarian once a year for a checkup. 
D)  Chihuahuas are cuter than bulldogs. 
E)  All dogs should be required to wear leashes at all times. 
A)  My dog should lose some weight. 
B)  Legally requiring dogs to have rabies shots will reduce the number of rabid dogs. 
C)  You should take your dog to the veterinarian once a year for a checkup. 
D)  Chihuahuas are cuter than bulldogs. 
E)  All dogs should be required to wear leashes at all times.

Question 11

Ceteris paribus, if a society is producing at a point on the production possibilities frontier (PPF), it can only increase the production of one good by:

Accepted Answer

A)  also increasing the production of the second good. 
B)  decreasing the production of the second good. 
C)  increasing the price of the second good. 
D)  decreasing the price of the second good. 
E)  reducing the resources available for production. 
A)  also increasing the production of the second good. 
B)  decreasing the production of the second good. 
C)  increasing the price of the second good. 
D)  decreasing the price of the second good. 
E)  reducing the resources available for production.

Question 12

Which of the following is a positive statement?

Accepted Answer

A)  Individuals should make good long-term decisions. 
B)  Corporations should maximize shareholder value. 
C)  Government should reduce the level of unemployment. 
D)  The most important effects of policy happen in the short term. 
E)  The unemployment rate is 8%. 
A)  Individuals should make good long-term decisions. 
B)  Corporations should maximize shareholder value. 
C)  Government should reduce the level of unemployment. 
D)  The most important effects of policy happen in the short term. 
E)  The unemployment rate is 8%.

Question 13

When the opportunity cost of producing a good rises as you produce more of it, you experience:

Accepted Answer

A)  normative economics. 
B)  increasing relative costs. 
C)  downward-sloping demand. 
D)  inferior goods. 
E)  increasing marginal utility. 
A)  normative economics. 
B)  increasing relative costs. 
C)  downward-sloping demand. 
D)  inferior goods. 
E)  increasing marginal utility.

Question 14

A town on the Gulf Coast is battered by a massive hurricane that destroys most of its productive resources. The community's production possibilities frontier (PPF) would show an:

Accepted Answer

A)  inward shift of the PPF. 
B)  outward shift of the PPF. 
C)  outward rotation along the x axis. 
D)  outward rotation along the y axis. 
E)  increase in opportunity cost. 
A)  inward shift of the PPF. 
B)  outward shift of the PPF. 
C)  outward rotation along the x axis. 
D)  outward rotation along the y axis. 
E)  increase in opportunity cost.

Question 15

Which of the following is a positive statement?

Accepted Answer

A)  An economist should test every theory at least twice. 
B)  Increases in the minimum wage cause unemployment. 
C)  We ought to deregulate the mortgage market. 
D)  The government must provide unlimited health care to citizens. 
E)  We should forgo some current consumption in order to invest in the future. 
A)  An economist should test every theory at least twice. 
B)  Increases in the minimum wage cause unemployment. 
C)  We ought to deregulate the mortgage market. 
D)  The government must provide unlimited health care to citizens. 
E)  We should forgo some current consumption in order to invest in the future.

Question 16

Refer to the accompanying figure to answer the next  questions.  
-Given your current resources, you would need even more hours in each day in order to attain:

Accepted Answer

A)  point A. 
B)  point B. 
C)  point C. 
D)  point D. 
E)  point E. 
A)  point A. 
B)  point B. 
C)  point C. 
D)  point D. 
E)  point E.

Question 17

Refer to the following table to answer the next  questions.  
-Given the same quantity of resources, what is Alicia Keys's opportunity cost of producing a New York pizza?

Accepted Answer

A)  5/2 Philly cheesesteaks 
B)  2/5 Philly cheesesteak 
C)  3 Philly cheesesteaks 
D)  1/3 New York pizza 
E)  4/5 New York pizza 
A)  5/2 Philly cheesesteaks 
B)  2/5 Philly cheesesteak 
C)  3 Philly cheesesteaks 
D)  1/3 New York pizza 
E)  4/5 New York pizza

Question 18

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the next questions.  
-What is Gibbs's opportunity cost of solving a crime?

Accepted Answer

A)  20 solved crimes 
B)  30 solved crimes 
C)  5 solved crimes 
D)  1/20 of a boat 
E)  1/10 of a boat 
A)  20 solved crimes 
B)  30 solved crimes 
C)  5 solved crimes 
D)  1/20 of a boat 
E)  1/10 of a boat

Question 19

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between making pizzas and making stromboli. Refer to these figures to answer the next  questions.  
-What is Jim's opportunity cost of making 1 pizza?

Accepted Answer

A)  50 stromboli 
B)  20 stromboli 
C)  2.5 stromboli 
D)  2 stromboli 
E)  1.5 stromboli 
A)  50 stromboli 
B)  20 stromboli 
C)  2.5 stromboli 
D)  2 stromboli 
E)  1.5 stromboli

Question 20

At full employment, a society produces:

Accepted Answer

A)  somewhere within its production possibilities frontier (PPF). 
B)  somewhere outside its PPF. 
C)  at the origin on its PPF graph. 
D)  on its PPF. 
E)  only one good. 
A)  somewhere within its production possibilities frontier (PPF). 
B)  somewhere outside its PPF. 
C)  at the origin on its PPF graph. 
D)  on its PPF. 
E)  only one good.

Goods that are produced now so that they can be used to produce other goods in the future are called:

Refer to the following figure to answer the next questions. -Which point in the corresponding figure represents a combination of smoothies and milk shakes that society cannot currently produce?

One reason that economists make assumptions when designing models is to:

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the next questions. -What is DiNozzo's opportunity cost for solving a crime?

Specialization and trade allow individuals to:

The movie Saving Private Ryan is about a military mission to find and recover a particular soldier-Private Ryan. The movie is predominantly about how much was given up in an effort to save this one particular soldier. The main economic theme of the movie is:

Refer to the accompanying figure to answer the next questions. -Unemployed resources are evident at:

Refer to the following figures to answer the next questions. -Which allocation point in the short-run production possibilities frontier (PPF) will lead to NO GROWTH in the long-run PPF?

Which of the following is a positive statement?

Ceteris paribus, if a society is producing at a point on the production possibilities frontier (PPF), it can only increase the production of one good by:

Which of the following is a positive statement?

When the opportunity cost of producing a good rises as you produce more of it, you experience:

A town on the Gulf Coast is battered by a massive hurricane that destroys most of its productive resources. The community's production possibilities frontier (PPF) would show an:

Which of the following is a positive statement?

Refer to the accompanying figure to answer the next questions. -Given your current resources, you would need even more hours in each day in order to attain:

Refer to the following table to answer the next questions. -Given the same quantity of resources, what is Alicia Keys's opportunity cost of producing a New York pizza?

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the next questions. -What is Gibbs's opportunity cost of solving a crime?

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between making pizzas and making stromboli. Refer to these figures to answer the next questions. -What is Jim's opportunity cost of making 1 pizza?

At full employment, a society produces:

The Five Foundations of Economics

The Market at Work: Supply and Demand

Price Controls

The Efficiency of Markets and the Costs of Taxation

Introduction to Macroeconomics and Gross Domestic Product

Unemployment

The Price Level and Inflation

Savings, Interest Rates, and the Market for Loanable Funds

Financial Markets and Securities

Economic Growth and the Wealth of Nations

Growth Theory

The Aggregate Demandaggregate Supply Model

The Great Recession, the Great Depression, and Great Macroeconomic Debates

Federal Budgets: the Tools of Fiscal Policy

Fiscal Policy

Money and the Federal Reserve

Monetary Policy

International Trade

International Finance

Filters

Exam 2: Model Building and Gains From Trade

Goods that are produced now so that they can be used to produce other goods in the future are called:

Refer to the following figure to answer the next questions. -Which point in the corresponding figure represents a combination of smoothies and milk shakes that society cannot currently produce?

One reason that economists make assumptions when designing models is to:

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the next questions. -What is DiNozzo's opportunity cost for solving a crime?

Specialization and trade allow individuals to:

The movie Saving Private Ryan is about a military mission to find and recover a particular soldier-Private Ryan. The movie is predominantly about how much was given up in an effort to save this one particular soldier. The main economic theme of the movie is:

Refer to the accompanying figure to answer the next questions. -Unemployed resources are evident at:

Refer to the following figures to answer the next questions. -Which allocation point in the short-run production possibilities frontier (PPF) will lead to NO GROWTH in the long-run PPF?

Which of the following is a positive statement?

Ceteris paribus, if a society is producing at a point on the production possibilities frontier (PPF), it can only increase the production of one good by:

Which of the following is a positive statement?

When the opportunity cost of producing a good rises as you produce more of it, you experience:

A town on the Gulf Coast is battered by a massive hurricane that destroys most of its productive resources. The community's production possibilities frontier (PPF) would show an:

Which of the following is a positive statement?

Refer to the accompanying figure to answer the next questions. -Given your current resources, you would need even more hours in each day in order to attain:

Refer to the following table to answer the next questions. -Given the same quantity of resources, what is Alicia Keys's opportunity cost of producing a New York pizza?

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the next questions. -What is Gibbs's opportunity cost of solving a crime?

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between making pizzas and making stromboli. Refer to these figures to answer the next questions. -What is Jim's opportunity cost of making 1 pizza?

At full employment, a society produces:

The Five Foundations of Economics

The Market at Work: Supply and Demand

Price Controls

The Efficiency of Markets and the Costs of Taxation

Introduction to Macroeconomics and Gross Domestic Product

Unemployment

The Price Level and Inflation

Savings, Interest Rates, and the Market for Loanable Funds

Financial Markets and Securities

Economic Growth and the Wealth of Nations

Growth Theory

The Aggregate Demandaggregate Supply Model

The Great Recession, the Great Depression, and Great Macroeconomic Debates

Federal Budgets: the Tools of Fiscal Policy

Fiscal Policy

Money and the Federal Reserve

Monetary Policy

International Trade

International Finance

Filters