Question 1

The main reason that finished goods are scarce is that

Accepted Answer

A)  raw material resources are scarce. 
B)  factories are not operated efficiently. 
C)  distribution systems are clogged. 
D)  taxes are destroying work incentives. 
E)  All of the above are correct. 
A)  raw material resources are scarce. 
B)  factories are not operated efficiently. 
C)  distribution systems are clogged. 
D)  taxes are destroying work incentives. 
E)  All of the above are correct.

Question 2

A production possibilities frontier shows the combinations of various goods that should be produced.

Accepted Answer

A) True 
 B)False

Question 3

What is the basic task that economists expect the market to carry out?

Accepted Answer

A)  deal with the fundamental problem of scarcity 
B)  balance the government's budget 
C)  lessen wants to the level of income available 
D)  meet all human wants 
A)  deal with the fundamental problem of scarcity 
B)  balance the government's budget 
C)  lessen wants to the level of income available 
D)  meet all human wants

Question 4

Every economic decision involves a trade-off because of

Accepted Answer

A)  theory. 
B)  opportunism. 
C)  consumption. 
D)  scarcity. 
E)  efficiency. 
A)  theory. 
B)  opportunism. 
C)  consumption. 
D)  scarcity. 
E)  efficiency.

Question 5

One popular definition of economics is the study of

Accepted Answer

A)  how scarcity increases opportunities to meet ends. 
B)  how markets overcome scarcity. 
C)  one goal and three tasks. 
D)  how to use limited means to meet unlimited wants. 
E)  wants versus needs. 
A)  how scarcity increases opportunities to meet ends. 
B)  how markets overcome scarcity. 
C)  one goal and three tasks. 
D)  how to use limited means to meet unlimited wants. 
E)  wants versus needs.

Question 6

Economics is often described as a science of constrained choice.How do you justify this argument?

Accepted Answer

Economics deals with the allocation of l

Question 7

Opportunity cost is the combined value of all other alternatives that go unchosen.

Accepted Answer

A) True 
 B)False

Question 8

Economists define "efficiency" as the absence of waste.

Accepted Answer

A) True 
 B)False

Question 9

If the budget deficit was eliminated,the federal government would have more money than it could spend.

Accepted Answer

A) True 
 B)False

Question 10

The economic problem of scarcity

Accepted Answer

A)  is unique to a capitalist economy. 
B)  requires that choices be made among alternatives. 
C)  disappears as technology advances. 
D)  affects only less-developed countries. 
A)  is unique to a capitalist economy. 
B)  requires that choices be made among alternatives. 
C)  disappears as technology advances. 
D)  affects only less-developed countries.

Question 11

A market economy allocates resources primarily in accordance with orders from government bureaucrats.

Accepted Answer

A) True 
 B)False

Question 12

A ticket to an Eric Clapton concert costs $45.If you have a ticket,you can "scalp" it (sell it illegally)for $75.To a ticket holder,the opportunity cost of actually attending the concert is

Accepted Answer

A)  $45. 
B)  $50. 
C)  $75. 
D)  $115. 
A)  $45. 
B)  $50. 
C)  $75. 
D)  $115.

Question 13

Figure 3-5  
-At present,faculty in the Economics Department teach introductory and upper-level courses.Which graph in Figure 3-5 represents the change in the production possibilities of the Economics Department after a policy of using graduate students in addition to faculty to teach introductory sections was implemented?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
A)  1 
B)  2 
C)  3 
D)  4

Question 14

All actions and purchases,even those of wealthy people,involve a sacrifice.

Accepted Answer

A) True 
 B)False

Question 15

Is increased capital spending the only way for an economy to expand its production possibilities frontier?

Accepted Answer

A)  No,an economy can also expand by invention and innovation. 
B)  No,an economy can also grow by investment instead of capital spending. 
C)  Yes,more capital is the only way to expand its production possibilities frontier. 
D)  Yes,although more capital clearly has a high opportunity cost. 
E)  Yes,because capital is the only constraining resource that limits growth. 
A)  No,an economy can also expand by invention and innovation. 
B)  No,an economy can also grow by investment instead of capital spending. 
C)  Yes,more capital is the only way to expand its production possibilities frontier. 
D)  Yes,although more capital clearly has a high opportunity cost. 
E)  Yes,because capital is the only constraining resource that limits growth.

Question 16

Which of the following characteristics of a PPF indicates that tradeoffs must be made?

Accepted Answer

A)  the downward slope 
B)  the upward slope 
C)  the constant slope 
D)  the curvature 
A)  the downward slope 
B)  the upward slope 
C)  the constant slope 
D)  the curvature

Question 17

The U.S.government spent over $3.6 trillion in budget year 2010.

Accepted Answer

A) True 
 B)False

Question 18

If production involves constant opportunity cost,the production possibilities curve

Accepted Answer

A)  is "bowed inward." 
B)  is a straight line. 
C)  is "bowed outward." 
D)  is a wavy line. 
E)  has an unpredictable shape. 
A)  is "bowed inward." 
B)  is a straight line. 
C)  is "bowed outward." 
D)  is a wavy line. 
E)  has an unpredictable shape.

Question 19

Do markets solve all of society's problems?

Accepted Answer

A)  Yes,markets are efficient and work well under nearly all circumstances. 
B)  Yes,markets solve the problems of production and distribution. 
C)  No,they do not solve problems such as unemployment and inflation. 
D)  No,they hardly solve any problems at all. 
E)  Uncertain,economic theory has no answer to this question. 
A)  Yes,markets are efficient and work well under nearly all circumstances. 
B)  Yes,markets solve the problems of production and distribution. 
C)  No,they do not solve problems such as unemployment and inflation. 
D)  No,they hardly solve any problems at all. 
E)  Uncertain,economic theory has no answer to this question.

Question 20

The scarcity of physical resources is far more fundamental to the study of economics than the scarcity of funds.

Accepted Answer

A) True 
 B)False

The main reason that finished goods are scarce is that

A production possibilities frontier shows the combinations of various goods that should be produced.

What is the basic task that economists expect the market to carry out?

Every economic decision involves a trade-off because of

One popular definition of economics is the study of

Economics is often described as a science of constrained choice.How do you justify this argument?

Opportunity cost is the combined value of all other alternatives that go unchosen.

Economists define "efficiency" as the absence of waste.

If the budget deficit was eliminated,the federal government would have more money than it could spend.

The economic problem of scarcity

A market economy allocates resources primarily in accordance with orders from government bureaucrats.

A ticket to an Eric Clapton concert costs $45.If you have a ticket,you can "scalp" it (sell it illegally)for $75.To a ticket holder,the opportunity cost of actually attending the concert is

All actions and purchases,even those of wealthy people,involve a sacrifice.

Is increased capital spending the only way for an economy to expand its production possibilities frontier?

Which of the following characteristics of a PPF indicates that tradeoffs must be made?

The U.S.government spent over $3.6 trillion in budget year 2010.

If production involves constant opportunity cost,the production possibilities curve

Do markets solve all of society's problems?

The scarcity of physical resources is far more fundamental to the study of economics than the scarcity of funds.

What Is Economics

The Economy Myth and Reality

Supply and Demand An Initial Look

An Introduction To Macroeconomics

The Goals Of Macroeconomic Policy

Economic Growth Theory And Policy

Aggregate Demand and The Powerful Consumer

Demand Side Equilibrium Unemployment Or Inflation

Bringing In The Supply Side Unemployment and Inflation

Managing Aggregate Demand Fiscal Policy

Money and The Banking System

Monetary Policy Conventional and Unconventional

The Financial Crisis and The Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits In The Short and Long Run

The Trade Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System Order Or Disorder

Exchange Rates and The Macroeconomy

Filters

Exam 3: The Fundamental Economic Problem Scarcity and Choice

The main reason that finished goods are scarce is that

A production possibilities frontier shows the combinations of various goods that should be produced.

What is the basic task that economists expect the market to carry out?

Every economic decision involves a trade-off because of

One popular definition of economics is the study of

Economics is often described as a science of constrained choice.How do you justify this argument?

Opportunity cost is the combined value of all other alternatives that go unchosen.

Economists define "efficiency" as the absence of waste.

If the budget deficit was eliminated,the federal government would have more money than it could spend.

The economic problem of scarcity

A market economy allocates resources primarily in accordance with orders from government bureaucrats.

A ticket to an Eric Clapton concert costs $45.If you have a ticket,you can "scalp" it (sell it illegally)for $75.To a ticket holder,the opportunity cost of actually attending the concert is

All actions and purchases,even those of wealthy people,involve a sacrifice.

Is increased capital spending the only way for an economy to expand its production possibilities frontier?

Which of the following characteristics of a PPF indicates that tradeoffs must be made?

The U.S.government spent over $3.6 trillion in budget year 2010.

If production involves constant opportunity cost,the production possibilities curve

Do markets solve all of society's problems?

The scarcity of physical resources is far more fundamental to the study of economics than the scarcity of funds.

What Is Economics

The Economy Myth and Reality

Supply and Demand An Initial Look

An Introduction To Macroeconomics

The Goals Of Macroeconomic Policy

Economic Growth Theory And Policy

Aggregate Demand and The Powerful Consumer

Demand Side Equilibrium Unemployment Or Inflation

Bringing In The Supply Side Unemployment and Inflation

Managing Aggregate Demand Fiscal Policy

Money and The Banking System

Monetary Policy Conventional and Unconventional

The Financial Crisis and The Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits In The Short and Long Run

The Trade Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System Order Or Disorder

Exchange Rates and The Macroeconomy

Filters