Question 1

The production possibility frontier illustrates that:

Accepted Answer

A) the economy will automatically end up at full employment. 
B) an economy's productive capacity increases one-for-one with its population. 
C) if all resources of an economy are being used efficiently,more of one good can be produced only if less of another good is produced. 
D) economic production possibilities have no limit. 
A) the economy will automatically end up at full employment. 
B) an economy's productive capacity increases one-for-one with its population. 
C) if all resources of an economy are being used efficiently,more of one good can be produced only if less of another good is produced. 
D) economic production possibilities have no limit.

Question 2

Use the following to answer question:
 
-(Table: Comparative Advantage I)Use Table: Comparative Advantage I.The opportunity cost of producing 1 box of herring for Sweden is _____ box(es)of cell phones.

Accepted Answer

A) 10 
B) 0.5 
C) 5 
D) 0.1 
A) 10 
B) 0.5 
C) 5 
D) 0.1

Question 3

The importance of an economic model is that it allows us to:

Accepted Answer

A) build a complex and accurate model of how the economy should work. 
B) build an accurate mathematical model of every aspect of the economy. 
C) focus on the effects of only one change at a time. 
D) avoid opportunity costs. 
A) build a complex and accurate model of how the economy should work. 
B) build an accurate mathematical model of every aspect of the economy. 
C) focus on the effects of only one change at a time. 
D) avoid opportunity costs.

Question 4

If the opportunity cost of manufacturing automobiles is lower in the United States than in Britain and the opportunity cost of manufacturing airplanes is higher in the United States than in Britain,then the United States will:

Accepted Answer

A) export both airplanes and automobiles to Britain. 
B) import both airplanes and automobiles from Britain. 
C) export airplanes to Britain and import automobiles from Britain. 
D) import airplanes from Britain and export automobiles to Britain. 
A) export both airplanes and automobiles to Britain. 
B) import both airplanes and automobiles from Britain. 
C) export airplanes to Britain and import automobiles from Britain. 
D) import airplanes from Britain and export automobiles to Britain.

Question 5

Use the following to answer question:
 
-(Figure: Production Possibility Frontier)Use Figure: Production Possibilities Frontier.Which rate of production per period is NOT efficient?

Accepted Answer

A) 18 cars and no computers 
B) 8 cars and 18 computers 
C) 16 cars and 12 computers 
D) no cars and 18 computers 
A) 18 cars and no computers 
B) 8 cars and 18 computers 
C) 16 cars and 12 computers 
D) no cars and 18 computers

Question 6

Use the following to answer question:
 
-(Table: Production Possibilities Schedule II)Use Table: Production Possibilities Schedule II.If an economy is producing at alternative W,the opportunity cost of producing at X is _____ unit(s)of consumer goods per period.

Accepted Answer

A) 0 
B) 1 
C) 4 
D) 18 
A) 0 
B) 1 
C) 4 
D) 18

Question 7

The circular-flow diagram illustrates how firms _____ goods and services and _____ factors of production.

Accepted Answer

A) buy;sell 
B) buy;buy 
C) sell;buy 
D) sell;sell 
A) buy;sell 
B) buy;buy 
C) sell;buy 
D) sell;sell

Question 8

In constructing a model,economists:

Accepted Answer

A) might use a computer simulation. 
B) avoid making any assumptions. 
C) assume that all relevant factors are constantly changing. 
D) are prohibited from using mathematics. 
A) might use a computer simulation. 
B) avoid making any assumptions. 
C) assume that all relevant factors are constantly changing. 
D) are prohibited from using mathematics.

Question 9

Mark and Julie are going to sell brownies and cookies for their third annual fundraiser bake sale.In one day,Mark can make 40 brownies or 20 cookies,and Julie can make 15 brownies or 15 cookies.With specialization,_____ brownies and _____ cookies will be made in one day.

Accepted Answer

A) 15;20 
B) 40;20 
C) 40;15 
D) 55;35 
A) 15;20 
B) 40;20 
C) 40;15 
D) 55;35

Question 10

Which statement is positive?

Accepted Answer

A) The poverty rate should be 4%. 
B) A high rate of economic growth should be a more important goal for the country than should a low rate of unemployment. 
C) The federal government pays for 46% of U.S.health care costs. 
D) Everyone in the country should be covered by national health insurance. 
A) The poverty rate should be 4%. 
B) A high rate of economic growth should be a more important goal for the country than should a low rate of unemployment. 
C) The federal government pays for 46% of U.S.health care costs. 
D) Everyone in the country should be covered by national health insurance.

Question 11

In a single day,George can bake 10 cakes and Greta can bake 5 cakes.We know that _____ has a(n)_____ advantage in baking cakes.

Accepted Answer

A) George;comparative 
B) George;absolute 
C) Greta;comparative 
D) Greta;absolute 
A) George;comparative 
B) George;absolute 
C) Greta;comparative 
D) Greta;absolute

Question 12

Use the following to answer question:
 
-(Table: Production Possibilities Schedule I)Use Table: Production Possibilities Schedule I.The opportunity cost of producing the fourth unit of consumer goods is _____ units of capital goods.

Accepted Answer

A) 2 
B) 4 
C) 6 
D) 8 
A) 2 
B) 4 
C) 6 
D) 8

Question 13

The U.S.production possibility frontier will _____ if there is a large influx of working-age immigrants.

Accepted Answer

A) shift in 
B) shift out 
C) not change 
D) The answer cannot be determined from the information provided. 
A) shift in 
B) shift out 
C) not change 
D) The answer cannot be determined from the information provided.

Question 14

The economy's factors of production are not equally suitable for producing different types of goods.This principle generates:

Accepted Answer

A) economic growth. 
B) technical efficiency. 
C) underuse of resources. 
D) the law of increasing opportunity cost. 
A) economic growth. 
B) technical efficiency. 
C) underuse of resources. 
D) the law of increasing opportunity cost.

Question 15

Use the following to answer question:  
-(Table: Production of Good Z and Good X in Urbanville)Use Table: Production of Good Z and Good X in Urbanville.This table shows the production possibility frontier for Urbanville.Suppose Urbanville is producing 15 of Z and 45 of X;this combination is:

Accepted Answer

A) both allocatively and productively efficient. 
B) productively efficient. 
C) allocatively efficient. 
D) neither productively nor allocatively efficient. 
A) both allocatively and productively efficient. 
B) productively efficient. 
C) allocatively efficient. 
D) neither productively nor allocatively efficient.

Question 16

Use the following to answer question:  
-(Table: Coffee and Salmon Production Possibilities II)Use Table: Coffee and Salmon Production Possibilities II.This table shows the maximum amounts of coffee and salmon,both measured in pounds,that Brazil and Alaska can produce if they just produce one good.Brazil has a comparative advantage in producing:

Accepted Answer

A) coffee only. 
B) salmon only. 
C) both coffee and salmon. 
D) neither coffee nor salmon 
A) coffee only. 
B) salmon only. 
C) both coffee and salmon. 
D) neither coffee nor salmon

Question 17

A mortgage-backed security is an asset that:

Accepted Answer

A) only homeowners are allowed to purchase. 
B) provides earnings to its owner based on payments made by people on their home loans. 
C) the Federal Reserve uses to implement monetary policy. 
D) is an important part of the circular-flow diagram. 
A) only homeowners are allowed to purchase. 
B) provides earnings to its owner based on payments made by people on their home loans. 
C) the Federal Reserve uses to implement monetary policy. 
D) is an important part of the circular-flow diagram.

Question 18

If they produce only hamburgers,in a single day Sarah can produce 10 hamburgers,and Abe can produce 5 hamburgers.If they make milkshakes only,in a single day Sarah can produce 10 milkshakes,and Abe can produce 4 milkshakes.Therefore,_____ has an absolute advantage and a comparative advantage in making _____.

Accepted Answer

A) Sarah;hamburgers. 
B) Sarah;milkshakes. 
C) Abe;hamburgers. 
D) Abe;milkshakes. 
A) Sarah;hamburgers. 
B) Sarah;milkshakes. 
C) Abe;hamburgers. 
D) Abe;milkshakes.

Question 19

In the circular-flow diagram,households receive money for _____ in the _____ market.

Accepted Answer

A) producing and selling goods and services;product 
B) selling resources;product 
C) selling resources;factor 
D) selling goods and services;factor 
A) producing and selling goods and services;product 
B) selling resources;product 
C) selling resources;factor 
D) selling goods and services;factor

Question 20

Use the following to answer question:  
-(Scenario: Linear Production Possibility Frontier)Use Scenario: Linear Production Possibility Frontier.If Largetown's labor resource decreases by 40 hours,the opportunity cost of producing shirts:

Accepted Answer

A) increases. 
B) decreases. 
C) does not change. 
D) may or may not change depending upon the number of pairs of socks it wishes to produce. 
A) increases. 
B) decreases. 
C) does not change. 
D) may or may not change depending upon the number of pairs of socks it wishes to produce.

The production possibility frontier illustrates that:

Use the following to answer question: -(Table: Comparative Advantage I)Use Table: Comparative Advantage I.The opportunity cost of producing 1 box of herring for Sweden is _____ box(es)of cell phones.

The importance of an economic model is that it allows us to:

If the opportunity cost of manufacturing automobiles is lower in the United States than in Britain and the opportunity cost of manufacturing airplanes is higher in the United States than in Britain,then the United States will:

Use the following to answer question: -(Figure: Production Possibility Frontier)Use Figure: Production Possibilities Frontier.Which rate of production per period is NOT efficient?

Use the following to answer question: -(Table: Production Possibilities Schedule II)Use Table: Production Possibilities Schedule II.If an economy is producing at alternative W,the opportunity cost of producing at X is _____ unit(s)of consumer goods per period.

The circular-flow diagram illustrates how firms _ goods and services and _ factors of production.

In constructing a model,economists:

Mark and Julie are going to sell brownies and cookies for their third annual fundraiser bake sale.In one day,Mark can make 40 brownies or 20 cookies,and Julie can make 15 brownies or 15 cookies.With specialization,_ brownies and _ cookies will be made in one day.

Which statement is positive?

In a single day,George can bake 10 cakes and Greta can bake 5 cakes.We know that _ has a(n)_ advantage in baking cakes.

Use the following to answer question: -(Table: Production Possibilities Schedule I)Use Table: Production Possibilities Schedule I.The opportunity cost of producing the fourth unit of consumer goods is _____ units of capital goods.

The U.S.production possibility frontier will _____ if there is a large influx of working-age immigrants.

The economy's factors of production are not equally suitable for producing different types of goods.This principle generates:

Use the following to answer question: -(Table: Production of Good Z and Good X in Urbanville)Use Table: Production of Good Z and Good X in Urbanville.This table shows the production possibility frontier for Urbanville.Suppose Urbanville is producing 15 of Z and 45 of X;this combination is:

A mortgage-backed security is an asset that:

In the circular-flow diagram,households receive money for _ in the _ market.

Use the following to answer question: -(Scenario: Linear Production Possibility Frontier)Use Scenario: Linear Production Possibility Frontier.If Largetown's labor resource decreases by 40 hours,the opportunity cost of producing shirts:

First Principles

Consumer and Producer Surplus

Supply and Demand

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Behind the Supply Curve: Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Graphs in Economics

Consumer Preferences and Consumer Choice

Filters

Exam 2: Economic Models: Trade-Offs and Trade

The production possibility frontier illustrates that:

Use the following to answer question: -(Table: Comparative Advantage I)Use Table: Comparative Advantage I.The opportunity cost of producing 1 box of herring for Sweden is _____ box(es)of cell phones.

The importance of an economic model is that it allows us to:

If the opportunity cost of manufacturing automobiles is lower in the United States than in Britain and the opportunity cost of manufacturing airplanes is higher in the United States than in Britain,then the United States will:

Use the following to answer question: -(Figure: Production Possibility Frontier)Use Figure: Production Possibilities Frontier.Which rate of production per period is NOT efficient?

Use the following to answer question: -(Table: Production Possibilities Schedule II)Use Table: Production Possibilities Schedule II.If an economy is producing at alternative W,the opportunity cost of producing at X is _____ unit(s)of consumer goods per period.

The circular-flow diagram illustrates how firms _____ goods and services and _____ factors of production.

In constructing a model,economists:

Mark and Julie are going to sell brownies and cookies for their third annual fundraiser bake sale.In one day,Mark can make 40 brownies or 20 cookies,and Julie can make 15 brownies or 15 cookies.With specialization,_____ brownies and _____ cookies will be made in one day.

Which statement is positive?

In a single day,George can bake 10 cakes and Greta can bake 5 cakes.We know that _____ has a(n)_____ advantage in baking cakes.

Use the following to answer question: -(Table: Production Possibilities Schedule I)Use Table: Production Possibilities Schedule I.The opportunity cost of producing the fourth unit of consumer goods is _____ units of capital goods.

The U.S.production possibility frontier will _____ if there is a large influx of working-age immigrants.

The economy's factors of production are not equally suitable for producing different types of goods.This principle generates:

Use the following to answer question: -(Table: Production of Good Z and Good X in Urbanville)Use Table: Production of Good Z and Good X in Urbanville.This table shows the production possibility frontier for Urbanville.Suppose Urbanville is producing 15 of Z and 45 of X;this combination is:

A mortgage-backed security is an asset that:

In the circular-flow diagram,households receive money for _____ in the _____ market.

Use the following to answer question: -(Scenario: Linear Production Possibility Frontier)Use Scenario: Linear Production Possibility Frontier.If Largetown's labor resource decreases by 40 hours,the opportunity cost of producing shirts:

First Principles

Consumer and Producer Surplus

Supply and Demand

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Behind the Supply Curve: Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Graphs in Economics

Consumer Preferences and Consumer Choice

Filters

The circular-flow diagram illustrates how firms _ goods and services and _ factors of production.

Mark and Julie are going to sell brownies and cookies for their third annual fundraiser bake sale.In one day,Mark can make 40 brownies or 20 cookies,and Julie can make 15 brownies or 15 cookies.With specialization,_ brownies and _ cookies will be made in one day.

In a single day,George can bake 10 cakes and Greta can bake 5 cakes.We know that _ has a(n)_ advantage in baking cakes.

In the circular-flow diagram,households receive money for _ in the _ market.