Question 1

Most students attending college pay tuition and are unable to hold a full -time job. For these students, tuition is

Accepted Answer

A)  not part of the opportunity cost of going to college. Neither are their forgone earnings from not holding a full-time job. 
B)  part of the opportunity cost of going to college. Their forgone earnings from not holding a full-time job are not part of the opportunity cost of attending college. 
C)  not part of the opportunity cost of going to college, but their forgone earnings from not holding a full-time job are part of the opportunity cost of attending college. 
D)  part of the opportunity cost of going to college. So are their forgone earnings from not holding a full-time job. 
A)  not part of the opportunity cost of going to college. Neither are their forgone earnings from not holding a full-time job. 
B)  part of the opportunity cost of going to college. Their forgone earnings from not holding a full-time job are not part of the opportunity cost of attending college. 
C)  not part of the opportunity cost of going to college, but their forgone earnings from not holding a full-time job are part of the opportunity cost of attending college. 
D)  part of the opportunity cost of going to college. So are their forgone earnings from not holding a full-time job.

Question 2

Tom takes 20 minutes to cook an egg and 5 minutes to make a sandwich. Jerry takes 15 minutes to cook an egg and 3 minutes to make a sandwich. Both individuals will be better off if

Accepted Answer

A)  Jerry trades sandwiches in exchange for eggs. 
B)  Tom trades sandwiches in exchange for eggs. 
C)  they trade, no matter who trades sandwiches and who eggs. 
D)  they donʹt trade. 
A)  Jerry trades sandwiches in exchange for eggs. 
B)  Tom trades sandwiches in exchange for eggs. 
C)  they trade, no matter who trades sandwiches and who eggs. 
D)  they donʹt trade.

Question 3

Susan likes to drink sodas. The ________soda Susan drinks, the ________of the last soda.

Accepted Answer

A)  less; higher the opportunity cost 
B)  less; lower the marginal benefit 
C)  more; lower the marginal benefit 
D)  more; higher the marginal benefit 
A)  less; higher the opportunity cost 
B)  less; lower the marginal benefit 
C)  more; lower the marginal benefit 
D)  more; higher the marginal benefit

Question 4

An economy produces only food and shelter. There are two individuals in the economy: Bill and Mary. Maryʹs opportunity cost of producing 1 unit of shelter is 2 units of food. Billʹs opportunity cost of producing 1 unit of shelter is 4 units of food.

Accepted Answer

A)  Mary has a comparative advantage over Bill in the production of shelter. 
B)  Mary has a comparative advantage over Bill in the production of food. 
C)  Bill has an absolute advantage over Mary in the production of shelter. 
D)  Bill has a comparative advantage over Mary in the production of shelter. 
A)  Mary has a comparative advantage over Bill in the production of shelter. 
B)  Mary has a comparative advantage over Bill in the production of food. 
C)  Bill has an absolute advantage over Mary in the production of shelter. 
D)  Bill has a comparative advantage over Mary in the production of shelter.

Question 5

A country that must decrease production of one good in order to increase the production of another

Accepted Answer

A)  must have private ownership of property. 
B)  must be producing on its production possibilities frontier. 
C)  must be using resources inefficiently. 
D)  must be producing beyond its production possibilities frontier. 
A)  must have private ownership of property. 
B)  must be producing on its production possibilities frontier. 
C)  must be using resources inefficiently. 
D)  must be producing beyond its production possibilities frontier.

Question 6

Consider a production possibilities frontier with corn on the vertical axis and cars on the horizontal. Unusually good weather for growing corn shifts

Accepted Answer

A)  neither the horizontal intercept nor the vertical intercept. 
B)  the horizontal intercept rightward but does not shift the vertical intercept. 
C)  the horizontal intercept rightward and the vertical intercept upward. 
D)  the vertical intercept upward but does not shift the horizontal intercept. 
A)  neither the horizontal intercept nor the vertical intercept. 
B)  the horizontal intercept rightward but does not shift the vertical intercept. 
C)  the horizontal intercept rightward and the vertical intercept upward. 
D)  the vertical intercept upward but does not shift the horizontal intercept.

Question 7

Using the values for the marginal benefit and the marginal cost of a bushel of apples given in the table above, what is the allocatively efficient quantity of apples? Suppose 10 million bushels of apples are produced. Should the quantity be increased or deceased? What if 20 million bushels are produced; should the quantity be increased or decreased?

Accepted Answer

The allocatively efficient quantity of a

Question 8

In the United States, Texas ranks number one in the amount of installed megawatts for wind power generation and Florida ranks number one in the number of beach vacations. These facts point out that

Accepted Answer

A)  Texas definitely has an absolute advantage in wind power generation. 
B)  Florida should produce more wind energy. 
C)  Texas has a comparative advantage in wind power generation. 
D)  Florida can produce wind energy at a lower opportunity cost than can Texas. 
A)  Texas definitely has an absolute advantage in wind power generation. 
B)  Florida should produce more wind energy. 
C)  Texas has a comparative advantage in wind power generation. 
D)  Florida can produce wind energy at a lower opportunity cost than can Texas.

Question 9

Economic growth can be represented by

Accepted Answer

A)  a movement up the production possibilities frontier PPF). 
B)  an outward shift of the production possibilities frontier PPF). 
C)  an inward shift of the production possibilities frontier PPF). 
D)  a movement down the production possibilities frontier PPF). 
A)  a movement up the production possibilities frontier PPF). 
B)  an outward shift of the production possibilities frontier PPF). 
C)  an inward shift of the production possibilities frontier PPF). 
D)  a movement down the production possibilities frontier PPF).

Question 10

Marginal benefit is the benefit

Accepted Answer

A)  of producing a good or service when the total benefit from the good or service exceeds its total cost. 
B)  that your activity provides to someone else. 
C)  that is received from consuming one more unit of a good or service. 
D)  of consuming another good or service divided by the total number of goods or services produced. 
A)  of producing a good or service when the total benefit from the good or service exceeds its total cost. 
B)  that your activity provides to someone else. 
C)  that is received from consuming one more unit of a good or service. 
D)  of consuming another good or service divided by the total number of goods or services produced.

Question 11

Economic growth comes from__________ .

Accepted Answer

A)  people willing to increase their skills in which case, economic growth is free 
B)  capital accumulation and the avoidance of opportunity cost 
C)  producing more goods than people want to consume 
D)  capital accumulation and technological advance 
A)  people willing to increase their skills in which case, economic growth is free 
B)  capital accumulation and the avoidance of opportunity cost 
C)  producing more goods than people want to consume 
D)  capital accumulation and technological advance

Question 12

$$\begin{array} { | l | l | l | } 
\hline \text { Point } & \begin{array} { l } 
\text { Production } \
\text { chocolate } \
\text { bars }
\end{array} & \begin{array} { l } 
\text { Production } \
\text { cans of cola }
\end{array} \
\hline \text { A } & 0 & 100 \
\hline \text { B } & 10 & 90 \
\hline \text { C } & 20 & 70 \
\hline \text { D } & 30 & 40 \
\hline \text { E } & 40 & 0 \
\hline
\end{array}$$
-The above table shows production points on Sweet-Tooth Land?s production possibilities frontier. What is the opportunity cost of one chocolate bar if Sweet-tooth Land moves from point C to point D?

Accepted Answer

A)  1/3 can of cola per chocolate bar 
B)  30 cans of cola per chocolate bar 
C)  10 cans of cola per chocolate bar 
D)  3 cans of cola per chocolate bar 
A)  1/3 can of cola per chocolate bar 
B)  30 cans of cola per chocolate bar 
C)  10 cans of cola per chocolate bar 
D)  3 cans of cola per chocolate bar

Question 13

A person who has an absolute advantage in the production of all goods will

Accepted Answer

A)  also have a comparative advantage in the production of all goods. 
B)  have a production possibilities frontier with a constant slope. 
C)  have a comparative advantage in the production of some goods but not in the production of others. 
D)  not be able to gain from specialization and exchange. 
A)  also have a comparative advantage in the production of all goods. 
B)  have a production possibilities frontier with a constant slope. 
C)  have a comparative advantage in the production of some goods but not in the production of others. 
D)  not be able to gain from specialization and exchange.

Question 14

Explain the difference between marginal cost and marginal benefit.

Accepted Answer

Marginal benefit is the benefit someone

Question 15

Suppose that a typical German factory can produce 20 cameras or 1 computer in an hour, and that a typical American factory can produce 10 cameras or one computer in an hour. The opportunity cost of 20 cameras in terms of computers in the United States is

Accepted Answer

A)  1/20 of a computer per camera. 
B)  2 computers per camera. 
C)  10 computers per camera. 
D)  1 computer per camera. 
A)  1/20 of a computer per camera. 
B)  2 computers per camera. 
C)  10 computers per camera. 
D)  1 computer per camera.

Question 16

-In the production possibilities frontier depicted in the figure above, which of the following combinations of hats and bananas is inefficient?

Accepted Answer

A)  1 million pounds of bananas and 3 million hats 
B)  4 million pounds of bananas and 4 million hats 
C)  2 million pounds of bananas and 5 million hats 
D)  0 pounds of bananas and 6 million hats 
A)  1 million pounds of bananas and 3 million hats 
B)  4 million pounds of bananas and 4 million hats 
C)  2 million pounds of bananas and 5 million hats 
D)  0 pounds of bananas and 6 million hats

Question 17

-In the production possibilities frontier depicted in the figure above, which of the following combinations of hats and bananas is unattainable?

Accepted Answer

A)  4 million pounds of bananas and 4 million hats 
B)  0 pounds of bananas and 6 million hats 
C)  1 million pounds of bananas and 3 million hats 
D)  2 million pounds of bananas and 5 million hats 
A)  4 million pounds of bananas and 4 million hats 
B)  0 pounds of bananas and 6 million hats 
C)  1 million pounds of bananas and 3 million hats 
D)  2 million pounds of bananas and 5 million hats

Question 18

An increase in the nationʹs capital stock will

Accepted Answer

A)  cause a movement along the PPF up and to the left. 
B)  shift the PPF outward. 
C)  move the nation from producing within the PPF to producing at a point closer to the PPF. 
D)  cause a movement along the PPF down and to the right. 
A)  cause a movement along the PPF up and to the left. 
B)  shift the PPF outward. 
C)  move the nation from producing within the PPF to producing at a point closer to the PPF. 
D)  cause a movement along the PPF down and to the right.

Question 19

BAE, a British defense company, has the contract to produce Tornado aircraft for the Royal Air Force. BAE is producing the aircraft at the lowest possible cost. If the RAF orders one more Tornado, there will be

Accepted Answer

A)  a misallocation of resources. 
B)  a decrease in opportunity costs as average costs decrease. 
C)  an outward shift in the PPF. 
D)  an increase in opportunity cost for Tornados. 
A)  a misallocation of resources. 
B)  a decrease in opportunity costs as average costs decrease. 
C)  an outward shift in the PPF. 
D)  an increase in opportunity cost for Tornados.

Question 20

A situation in which some resources are NOT fully utilized is represented in a production possibilities frontier diagram by

Accepted Answer

A)  the midpoint of the production possibilities frontier. 
B)  a point outside the production possibilities frontier. 
C)  a point inside the production possibilities frontier. 
D)  any point on either the horizontal or the vertical axis. 
A)  the midpoint of the production possibilities frontier. 
B)  a point outside the production possibilities frontier. 
C)  a point inside the production possibilities frontier. 
D)  any point on either the horizontal or the vertical axis.

Most students attending college pay tuition and are unable to hold a full -time job. For these students, tuition is

Tom takes 20 minutes to cook an egg and 5 minutes to make a sandwich. Jerry takes 15 minutes to cook an egg and 3 minutes to make a sandwich. Both individuals will be better off if

Susan likes to drink sodas. The soda Susan drinks, the of the last soda.

An economy produces only food and shelter. There are two individuals in the economy: Bill and Mary. Maryʹs opportunity cost of producing 1 unit of shelter is 2 units of food. Billʹs opportunity cost of producing 1 unit of shelter is 4 units of food.

A country that must decrease production of one good in order to increase the production of another

Consider a production possibilities frontier with corn on the vertical axis and cars on the horizontal. Unusually good weather for growing corn shifts

In the United States, Texas ranks number one in the amount of installed megawatts for wind power generation and Florida ranks number one in the number of beach vacations. These facts point out that

Economic growth can be represented by

Marginal benefit is the benefit

Economic growth comes from__________ .

Point Production chocolate bars Production cans of cola A 0 100 B 10 90 C 20 70 D 30 40 E 40 0 -The above table shows production points on Sweet-Tooth Land?s production possibilities frontier. What is the opportunity cost of one chocolate bar if Sweet-tooth Land moves from point C to point D?

A person who has an absolute advantage in the production of all goods will

Explain the difference between marginal cost and marginal benefit.

Suppose that a typical German factory can produce 20 cameras or 1 computer in an hour, and that a typical American factory can produce 10 cameras or one computer in an hour. The opportunity cost of 20 cameras in terms of computers in the United States is

-In the production possibilities frontier depicted in the figure above, which of the following combinations of hats and bananas is inefficient?

-In the production possibilities frontier depicted in the figure above, which of the following combinations of hats and bananas is unattainable?

An increase in the nationʹs capital stock will

BAE, a British defense company, has the contract to produce Tornado aircraft for the Royal Air Force. BAE is producing the aircraft at the lowest possible cost. If the RAF orders one more Tornado, there will be

A situation in which some resources are NOT fully utilized is represented in a production possibilities frontier diagram by

What Is Economics

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: the Keynesian Model

U.S Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Review

Filters

Exam 2: The Economic Problem

Most students attending college pay tuition and are unable to hold a full -time job. For these students, tuition is

Tom takes 20 minutes to cook an egg and 5 minutes to make a sandwich. Jerry takes 15 minutes to cook an egg and 3 minutes to make a sandwich. Both individuals will be better off if

Susan likes to drink sodas. The ________soda Susan drinks, the ________of the last soda.

An economy produces only food and shelter. There are two individuals in the economy: Bill and Mary. Maryʹs opportunity cost of producing 1 unit of shelter is 2 units of food. Billʹs opportunity cost of producing 1 unit of shelter is 4 units of food.

A country that must decrease production of one good in order to increase the production of another

Consider a production possibilities frontier with corn on the vertical axis and cars on the horizontal. Unusually good weather for growing corn shifts

In the United States, Texas ranks number one in the amount of installed megawatts for wind power generation and Florida ranks number one in the number of beach vacations. These facts point out that

Economic growth can be represented by

Marginal benefit is the benefit

Economic growth comes from__________ .

Point Production chocolate bars Production cans of cola A 0 100 B 10 90 C 20 70 D 30 40 E 40 0 -The above table shows production points on Sweet-Tooth Land?s production possibilities frontier. What is the opportunity cost of one chocolate bar if Sweet-tooth Land moves from point C to point D?

A person who has an absolute advantage in the production of all goods will

Explain the difference between marginal cost and marginal benefit.

Suppose that a typical German factory can produce 20 cameras or 1 computer in an hour, and that a typical American factory can produce 10 cameras or one computer in an hour. The opportunity cost of 20 cameras in terms of computers in the United States is

-In the production possibilities frontier depicted in the figure above, which of the following combinations of hats and bananas is inefficient?

-In the production possibilities frontier depicted in the figure above, which of the following combinations of hats and bananas is unattainable?

An increase in the nationʹs capital stock will

BAE, a British defense company, has the contract to produce Tornado aircraft for the Royal Air Force. BAE is producing the aircraft at the lowest possible cost. If the RAF orders one more Tornado, there will be

A situation in which some resources are NOT fully utilized is represented in a production possibilities frontier diagram by

What Is Economics

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: the Keynesian Model

U.S Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Review

Filters

Susan likes to drink sodas. The soda Susan drinks, the of the last soda.