Question 1

Specialization can sometimes create problems such as boredom and repetitive motion injuries.

Accepted Answer

A) True 
 B)False

Question 2

Barter occurs when

Accepted Answer

A) two people share everything 
B) one product is exchanged directly for another product 
C) money is used to buy goods 
D) money is exchanged directly for other money 
E) goods are used to buy money 
A) two people share everything 
B) one product is exchanged directly for another product 
C) money is used to buy goods 
D) money is exchanged directly for other money 
E) goods are used to buy money

Question 3

Exhibit 2-2   According to Exhibit 2-2, if Maria does one fewer load of laundry, how many pages can she type in the time saved on laundry?

Accepted Answer

A) 4 pages 
B) 6 pages 
C) 2/3 of a page 
D) 3/2 of a page 
E) it cannot be determined 
A) 4 pages 
B) 6 pages 
C) 2/3 of a page 
D) 3/2 of a page 
E) it cannot be determined

Question 4

Your opportunity cost of choosing a particular activity

Accepted Answer

A) can be easily and accurately calculated 
B) cannot even be estimated 
C) does not change over time 
D) varies, depending on time and circumstances 
E) is measured by the money you spend on the activity 
A) can be easily and accurately calculated 
B) cannot even be estimated 
C) does not change over time 
D) varies, depending on time and circumstances 
E) is measured by the money you spend on the activity

Question 5

Exhibit 2-7   In Exhibit 2-7, if society moves from point c to point d, society

Accepted Answer

A) gains 100 socks 
B) loses 30 mufflers 
C) is worse off after the change in production 
D) is not operating efficiently 
E) experiences some unemployment of resources 
A) gains 100 socks 
B) loses 30 mufflers 
C) is worse off after the change in production 
D) is not operating efficiently 
E) experiences some unemployment of resources

Question 6

The concave shape of a production possibilities frontier showing possible output levels of good A and good B indicates that if the economy produces more and more of good B,

Accepted Answer

A) larger and larger amounts of good A must be sacrificed 
B) smaller and smaller amounts of good A must be sacrificed 
C) more of good A will be produced 
D) the amount of resources available in the economy must be increased 
E) there must be an improvement in technology 
A) larger and larger amounts of good A must be sacrificed 
B) smaller and smaller amounts of good A must be sacrificed 
C) more of good A will be produced 
D) the amount of resources available in the economy must be increased 
E) there must be an improvement in technology

Question 7

Opportunity cost is always measured in dollar terms, rather than in terms of real goods and services.

Accepted Answer

A) True 
 B)False

Question 8

Exhibit 2-4   Which of the following points in Exhibit 2-4 represents an inefficient use of the economy's resources?

Accepted Answer

A) g 
B) i 
C) f 
D) d 
E) h 
A) g 
B) i 
C) f 
D) d 
E) h

Question 9

Which economic concept does the expression "there's no such thing as a free lunch" reflect?

Accepted Answer

A) opportunity cost 
B) specialization 
C) market exchange 
D) comparative advantage 
E) efficiency 
A) opportunity cost 
B) specialization 
C) market exchange 
D) comparative advantage 
E) efficiency

Question 10

A medium of exchange must be

Accepted Answer

A) approved by the government 
B) socially acceptable in exchange for goods and services 
C) easy to reproduce 
D) used to eliminate specialization and the division of labor 
E) used when a system of barter exists 
A) approved by the government 
B) socially acceptable in exchange for goods and services 
C) easy to reproduce 
D) used to eliminate specialization and the division of labor 
E) used when a system of barter exists

Question 11

An improvement in technology

Accepted Answer

A) will always result in a parallel shift of the production possibilities frontier 
B) will never result in a parallel shift of the production possibilities frontier 
C) will be indicated as a movement along the production possibilities frontier 
D) will shift the production possibilities frontier outward but not necessarily to a parallel position 
E) may not shift the production possibilities frontier 
A) will always result in a parallel shift of the production possibilities frontier 
B) will never result in a parallel shift of the production possibilities frontier 
C) will be indicated as a movement along the production possibilities frontier 
D) will shift the production possibilities frontier outward but not necessarily to a parallel position 
E) may not shift the production possibilities frontier

Question 12

The Sultan of Brunei, one of the world's richest people, does not face the problem of scarcity.

Accepted Answer

A) True 
 B)False

Question 13

A production possibilities frontier will shift outward if there is an improvement in technology.

Accepted Answer

A) True 
 B)False

Question 14

Absolute advantage is based on opportunity cost.

Accepted Answer

A) True 
 B)False

Question 15

Pure capitalism and a pure command system represent

Accepted Answer

A) two different ways of answering the basic economic questions 
B) two names describing the same method of answering the basic economic questions 
C) the only two ways of answering the basic economic questions 
D) the most efficient ways to answer the basic economic questions 
E) none of the above 
A) two different ways of answering the basic economic questions 
B) two names describing the same method of answering the basic economic questions 
C) the only two ways of answering the basic economic questions 
D) the most efficient ways to answer the basic economic questions 
E) none of the above

Question 16

Comparative advantage is

Accepted Answer

A) the ability of an individual to specialize and produce a greater amount of some good than can another individual 
B) the number of units of one good given up in order to acquire something 
C) the ability of an individual to produce a good at a lower opportunity cost than some other individual can 
D) an expression for the amount of labor a particular individual needs to produce a fixed amount of capital goods 
E) a reference to an individual having the greatest opportunity cost of producing the good and produces it with the fewest resources 
A) the ability of an individual to specialize and produce a greater amount of some good than can another individual 
B) the number of units of one good given up in order to acquire something 
C) the ability of an individual to produce a good at a lower opportunity cost than some other individual can 
D) an expression for the amount of labor a particular individual needs to produce a fixed amount of capital goods 
E) a reference to an individual having the greatest opportunity cost of producing the good and produces it with the fewest resources

Question 17

Exhibit 2-12 Maria and Hans Production Possibilities for Laundry and Typing   According to Exhibit 2-12, Hans and Maria would be better off if

Accepted Answer

A) Hans specialized in typing and Maria in doing laundry 
B) Hans specialized in doing laundry and Maria in typing 
C) each did their own laundry and typing 
D) Maria did all of the typing and all of the laundry 
E) Hans did all of the typing and all of the laundry 
A) Hans specialized in typing and Maria in doing laundry 
B) Hans specialized in doing laundry and Maria in typing 
C) each did their own laundry and typing 
D) Maria did all of the typing and all of the laundry 
E) Hans did all of the typing and all of the laundry

Question 18

In one week, Tetah can knit 15 sweaters or bake 480 cookies.The opportunity cost per cookie for Tetah is

Accepted Answer

A) $15 
B) 15 sweaters 
C) 32 sweaters 
D) 1/32 of a sweater 
E) 480 sweaters 
A) $15 
B) 15 sweaters 
C) 32 sweaters 
D) 1/32 of a sweater 
E) 480 sweaters

Question 19

If Helen gives up the opportunity to bake 40 cakes for each room she paints and Josh can paint one room in the time it takes him to bake 60 cakes, which of the following is true?

Accepted Answer

A) The opportunity cost of painting is higher for Helen. 
B) The opportunity cost of baking cakes is lower for Josh. 
C) The opportunity cost of painting one room is 1/40 of a cake for Helen. 
D) The opportunity cost of baking one cake is 60 rooms painted for Josh. 
E) The opportunity cost of cakes cannot be computed. 
A) The opportunity cost of painting is higher for Helen. 
B) The opportunity cost of baking cakes is lower for Josh. 
C) The opportunity cost of painting one room is 1/40 of a cake for Helen. 
D) The opportunity cost of baking one cake is 60 rooms painted for Josh. 
E) The opportunity cost of cakes cannot be computed.

Question 20

The production possibilities frontier represents all desirable combinations of outputs.

Accepted Answer

A) True 
 B)False

Exam 2: Economic Tools and Economics Systems

Specialization can sometimes create problems such as boredom and repetitive motion injuries.

Barter occurs when

Exhibit 2-2 According to Exhibit 2-2, if Maria does one fewer load of laundry, how many pages can she type in the time saved on laundry?

Your opportunity cost of choosing a particular activity

Exhibit 2-7 In Exhibit 2-7, if society moves from point c to point d, society

The concave shape of a production possibilities frontier showing possible output levels of good A and good B indicates that if the economy produces more and more of good B,

Opportunity cost is always measured in dollar terms, rather than in terms of real goods and services.

Exhibit 2-4 Which of the following points in Exhibit 2-4 represents an inefficient use of the economy's resources?

Which economic concept does the expression "there's no such thing as a free lunch" reflect?

A medium of exchange must be

An improvement in technology

The Sultan of Brunei, one of the world's richest people, does not face the problem of scarcity.

A production possibilities frontier will shift outward if there is an improvement in technology.

Absolute advantage is based on opportunity cost.

Pure capitalism and a pure command system represent

Comparative advantage is

Exhibit 2-12 Maria and Hans Production Possibilities for Laundry and Typing According to Exhibit 2-12, Hans and Maria would be better off if

In one week, Tetah can knit 15 sweaters or bake 480 cookies.The opportunity cost per cookie for Tetah is

If Helen gives up the opportunity to bake 40 cakes for each room she paints and Josh can paint one room in the time it takes him to bake 60 cakes, which of the following is true?

The production possibilities frontier represents all desirable combinations of outputs.

The Art and Science of Economic Analysis

Appendix--Understanding Graphs

Economic Decision Makers

Demand, Supply, and Markets

Elasticity of Demand and Supply

Appendix--Price Elasticity and Tax Incidence

Consumer Choice and Demand

Appendix--Indifference Curves and Utility Maximization

Production and Cost in the Firm

A--Perfect Competition

B--Perfect Competition

A--Monopoly

B--Monopoly

Monopolistic Competition and Oligopoly

Resource Markets

Labor Markets and Labor Unions

Capital, Interest, and Corporate Finance

Transaction Costs, Imperfect Information, and Behavioral Economics

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Externalities and the Environment

Income Distribution and Poverty

International Trade

International Finance

Economic Development

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