Question 1

-Under the current economic situation, which point would represent an unattainable combination of resources?

Accepted Answer

A) Point A 
B) Point D 
C) Point C 
D) Point E

Question 2

Statement I: An outward shift in the production possibilities frontier shows economic growth for a country. Statement II: Our economy generally operates inside the production possibilities frontier.

Accepted Answer

A) Statement I is true and statement II is false. 
B) Statement II is true and statement I is false. 
C) Both statements are true. 
D) Both statements are false.

Question 3

-Place point A on the graph to indicate where our economy operated in 1938.

Accepted Answer

The answer of 
-Place point A on the graph to...

Question 4

Assuming that full employment of labor is considered 5 percent unemployment, in 1998 and 1999 our economy operated ____________ the production possibilities frontier.

Accepted Answer

The answer of Assuming that full employment of labor is...

Question 5

Statement I. The definition of economics is that equilibrium is when supply and demand are equal. Statement II. Human wants are limited because our resources are limited.

Accepted Answer

A) Statement I is true and statement II is false. 
B) Statement II is true and statement I is false. 
C) Both statements are true. 
D) Both statements are false.

Question 6

Hypothetical Production Schedule for a Two-Product Economy 
-If the economy produces 36 consumer goods and 12 capital goods the economy would be producing __________________ (outside/on/inside) the production possibilities curve.

Accepted Answer

The answer of Hypothetical Production Schedule for a Two-Product Economy...

Question 7

Which of the following is not demonstrated by a production possibility curve?

Accepted Answer

A) Scarcity 
B) Opportunity cost 
C) Necessity for choice due to scarcity 
D) Price

Question 8

Hypothetical Production Schedule for a Two-Product Economy 
-If the economy could produce 42 consumer goods and 12 capital goods, given the current production possibilities curve, the economy would be producing ___________________ (outside/on/inside) the curve.

Accepted Answer

The answer of Hypothetical Production Schedule for a Two-Product Economy...

Question 9

"As output of one good expands, the opportunity cost of producing additional units of this good increases," is the law of ____________.

Accepted Answer

The answer of "As output of one good expands, the...

Question 10

Which of the following is an example of opportunity cost?

Accepted Answer

A) The income that could have been earned by working full-time instead of going to college. 
B) The decline in the grades of a student athlete that occurs because she decides to spend more time practicing sports than on her academic work. 
C) The value of other things you could have done with the same time and money it cost you to go to the movies. 
D) The value of the next-best bundle of goods and services that could have been produced instead of using those resources to put astronauts on the moon. 
E) All of the choices are examples of opportunity cost.

Question 11

When business firms get to be too big, they are suffering from ___________________.

Accepted Answer

The answer of When business firms get to be too...

Question 12

If our unemployment rate is 25 percent and our capacity utilization rate is 50 percent, our economy would be in the midst of a ____________.

Accepted Answer

The answer of If our unemployment rate is 25 percent...

Question 13

If the production possibilities frontier were a straight line,

Accepted Answer

A) the Law of Increasing Cost would still apply. 
B) the opportunity cost of producing one good would decrease as more of another good is produced. 
C) the opportunity cost of producing one good would increase as more of another good is produced. 
D) the opportunity cost of producing one good would remain the same as more of another good is produced.

Question 14

-What is the opportunity cost of going from point A to point B?

Accepted Answer

The answer of 
-What is the opportunity cost of going...

Question 15

Statement I. Resources are often referred to as "the means of production." Statement II. Capital is a resource.

Accepted Answer

A) Statement I is true and statement II is false. 
B) Statement II is true and statement I is false. 
C) Both statements are true. 
D) Both statements are false.

Question 16

The study of the efficient allocation of the scarce means of production toward the satisfaction of human wants defines _____________.

Accepted Answer

The answer of The study of the efficient allocation of...

Question 17

Statement I. Full employment and full production mean exactly the same thing. Statement II. You can attain full employment without attaining full production, but you cannot attain full production without attaining full employment.

Accepted Answer

A) Statement I is true and statement II is false. 
B) Statement II is true and statement I is false. 
C) Both statements are true. 
D) Both statements are false.

Question 18

Which statement is true?

Accepted Answer

A) Entrepreneurial ability is abundant in the U.S. 
B) The entrepreneur sets up a business and risks his or her own money. 
C) Land, labor and capital may be considered passive resources. 
D) All of the statements are true.

Question 19

In our economy

Accepted Answer

A) there is no need to economize. 
B) we rarely have to economize. 
C) only the rich have to. 
D) nearly everyone has to economize.

Question 20

Statement I. Technological advance pushes a country's production possibilities frontier outward. Statement II. Our economic growth slowed down from the early 1970s compared to the two decades before the 1970s.

Accepted Answer

A) Statement I is true and statement II is false. 
B) Statement II is true and statement I is false. 
C) Both statements are true. 
D) Both statements are false.

Exam 2: Resource Utilization

-Under the current economic situation, which point would represent an unattainable combination of resources?

Statement I: An outward shift in the production possibilities frontier shows economic growth for a country. Statement II: Our economy generally operates inside the production possibilities frontier.

-Place point A on the graph to indicate where our economy operated in 1938.

Assuming that full employment of labor is considered 5 percent unemployment, in 1998 and 1999 our economy operated ____________ the production possibilities frontier.

Statement I. The definition of economics is that equilibrium is when supply and demand are equal. Statement II. Human wants are limited because our resources are limited.

Hypothetical Production Schedule for a Two-Product Economy -If the economy produces 36 consumer goods and 12 capital goods the economy would be producing __________________ (outside/on/inside) the production possibilities curve.

Which of the following is not demonstrated by a production possibility curve?

Hypothetical Production Schedule for a Two-Product Economy -If the economy could produce 42 consumer goods and 12 capital goods, given the current production possibilities curve, the economy would be producing ___________________ (outside/on/inside) the curve.

"As output of one good expands, the opportunity cost of producing additional units of this good increases," is the law of ____________.

Which of the following is an example of opportunity cost?

When business firms get to be too big, they are suffering from ___________________.

If our unemployment rate is 25 percent and our capacity utilization rate is 50 percent, our economy would be in the midst of a ____________.

If the production possibilities frontier were a straight line,

-What is the opportunity cost of going from point A to point B?

Statement I. Resources are often referred to as "the means of production." Statement II. Capital is a resource.

The study of the efficient allocation of the scarce means of production toward the satisfaction of human wants defines _____________.

Statement I. Full employment and full production mean exactly the same thing. Statement II. You can attain full employment without attaining full production, but you cannot attain full production without attaining full employment.

Which statement is true?

In our economy

Statement I. Technological advance pushes a country's production possibilities frontier outward. Statement II. Our economic growth slowed down from the early 1970s compared to the two decades before the 1970s.