Question 1

Related to the Economics in Practice on page 26: Which one of the following occurs when an individual enters the paid work force?

Accepted Answer

A)  The opportunity cost of time for housework increases, because time spent on housework could be spent on money-earning activities. 
B)  The opportunity cost of time for housework increases, because money earned at a job can allow individuals to pay someone to do household chores that the individuals used to do themselves. 
C)  The opportunity cost of time for housework decreases, because increased earning power makes individuals less likely to do their own housework. 
D)  The opportunity cost of time for housework decreases, because as more people enter the work force, businesses have greater incentives to develop innovations that make housework more efficient. 
A)  The opportunity cost of time for housework increases, because time spent on housework could be spent on money-earning activities. 
B)  The opportunity cost of time for housework increases, because money earned at a job can allow individuals to pay someone to do household chores that the individuals used to do themselves. 
C)  The opportunity cost of time for housework decreases, because increased earning power makes individuals less likely to do their own housework. 
D)  The opportunity cost of time for housework decreases, because as more people enter the work force, businesses have greater incentives to develop innovations that make housework more efficient.

Question 2

If scarcity was eliminated

Accepted Answer

A)  trade would become unnecessary. 
B)  opportunity costs would increase. 
C)  all nations would have an absolute advantage in producing all products. 
D)  the concept of trade-offs would become irrelevant. 
A)  trade would become unnecessary. 
B)  opportunity costs would increase. 
C)  all nations would have an absolute advantage in producing all products. 
D)  the concept of trade-offs would become irrelevant.

Question 3

Refer to the information provided in Figure 2.6 below to answer the question(s) that follow.   Figure 2.6
-Refer to Figure 2.6. If the economy is at ppf2, a change in consumer taste would be shown by a

Accepted Answer

A)  shift from ppf2 to ppf1. 
B)  movement along ppf1. 
C)  movement along ppf2. 
D)  shift from ppf1 to ppf2. 
A)  shift from ppf2 to ppf1. 
B)  movement along ppf1. 
C)  movement along ppf2. 
D)  shift from ppf1 to ppf2.

Question 4

From 1935 to 2017, the yield per acre for wheat has ________ in the United States.

Accepted Answer

A)  slightly declined 
B)  roughly doubled 
C)  more than tripled 
D)  increased more than 6-fold 
A)  slightly declined 
B)  roughly doubled 
C)  more than tripled 
D)  increased more than 6-fold

Question 5

Price is the coordinating mechanism in a laissez-faire economy.

Accepted Answer

A) True 
 B)False

Question 6

An example of an investment is

Accepted Answer

A)  the purchase of a share of Google stock. 
B)  the purchase of an Exxon Mobil bond. 
C)  the purchase of a Hewlett Packard laser printer for use by a business. 
D)  all of the above. 
A)  the purchase of a share of Google stock. 
B)  the purchase of an Exxon Mobil bond. 
C)  the purchase of a Hewlett Packard laser printer for use by a business. 
D)  all of the above.

Question 7

Advocates of an unregulated market system argue that

Accepted Answer

A)  competition promotes efficiency. 
B)  competition leads to innovation. 
C)  competition leads to product variety and quality. 
D)  all of the above. 
A)  competition promotes efficiency. 
B)  competition leads to innovation. 
C)  competition leads to product variety and quality. 
D)  all of the above.

Question 8

All the combinations of goods and services that can be produced if all of society's resources are used efficiently are represented on an economy's

Accepted Answer

A)  production possibility frontier. 
B)  resource availability diagram. 
C)  factors of production statement. 
D)  allocative allotment graph. 
A)  production possibility frontier. 
B)  resource availability diagram. 
C)  factors of production statement. 
D)  allocative allotment graph.

Question 9

For an economy to produce at a point beyond its current ppf, the economy must

Accepted Answer

A)  waste less. 
B)  be more efficient. 
C)  reduce inputs. 
D)  increase its resource base. 
A)  waste less. 
B)  be more efficient. 
C)  reduce inputs. 
D)  increase its resource base.

Question 10

The economic problem can best be stated as:

Accepted Answer

A)  How can the economy improve technology so as to shift the production possibility frontier up and to the right? 
B)  Given scarce resources, how exactly do societies go about deciding what to produce, how to produce it, and for whom to produce? 
C)  Given the fact that the economy is inefficient, how much and what type of government intervention should be used to improve the efficiency of the economy? 
D)  What is the best rate of economic growth for a society? 
A)  How can the economy improve technology so as to shift the production possibility frontier up and to the right? 
B)  Given scarce resources, how exactly do societies go about deciding what to produce, how to produce it, and for whom to produce? 
C)  Given the fact that the economy is inefficient, how much and what type of government intervention should be used to improve the efficiency of the economy? 
D)  What is the best rate of economic growth for a society?

Question 11

All markets involve buyers and sellers engaging in exchange.

Accepted Answer

A) True 
 B)False

Question 12

Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.   Figure 2.4
-According to Figure 2.4, the point where only motorcycles are produced is

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  E. 
A)  A. 
B)  B. 
C)  C. 
D)  E.

Question 13

Refer to the information provided in Figure 2.3 below to answer the question(s) that follow.   Figure 2.3
-Refer to Figure 2.3. The law of ________ opportunity costs is best depicted by the production possibilities frontier in Panel A.

Accepted Answer

A)  increasing 
B)  constant 
C)  decreasing 
D)  zero 
A)  increasing 
B)  constant 
C)  decreasing 
D)  zero

Question 14

A command economy eliminates markets.

Accepted Answer

A) True 
 B)False

Question 15

Refer to the information provided in Figure 2.6 below to answer the question(s) that follow.   Figure 2.6
-Refer to Figure 2.6. Which of the following is most likely to shift the production possibility frontier from ppf1 to ppf2?

Accepted Answer

A)  a change in consumer tastes 
B)  the purchase of stocks on the New York Stock Exchange 
C)  moving resources from capital to consumer goods 
D)  an increase in the general educational level of the population 
A)  a change in consumer tastes 
B)  the purchase of stocks on the New York Stock Exchange 
C)  moving resources from capital to consumer goods 
D)  an increase in the general educational level of the population

Question 16

In terms of the production possibility frontier, an increase in productivity attributable to new technology would best be shown by

Accepted Answer

A)  a movement along the frontier. 
B)  the production possibility frontier shifting outward, away from the origin. 
C)  a movement from a point inside the frontier to a point on it. 
D)  a movement toward the origin. 
A)  a movement along the frontier. 
B)  the production possibility frontier shifting outward, away from the origin. 
C)  a movement from a point inside the frontier to a point on it. 
D)  a movement toward the origin.

Question 17

Production decisions are centralized in a(n)

Accepted Answer

A)  laissez-faire economy. 
B)  command economy. 
C)  invisible-hand economy. 
D)  utopian economy. 
A)  laissez-faire economy. 
B)  command economy. 
C)  invisible-hand economy. 
D)  utopian economy.

Question 18

Refer to the information provided in Figure 2.2 below for the economy of Microland to answer the question(s) that follow.   Figure 2.2
-Refer to Figure 2.2. Point B represents a situation of

Accepted Answer

A)  full employment but production inefficiency. 
B)  less than full employment but production efficiency. 
C)  both full resource employment and production efficiency. 
D)  less than full employment and production inefficiency. 
A)  full employment but production inefficiency. 
B)  less than full employment but production efficiency. 
C)  both full resource employment and production efficiency. 
D)  less than full employment and production inefficiency.

Question 19

As you move down the production possibility frontier, the absolute value of the marginal rate of transformation

Accepted Answer

A)  increases. 
B)  decreases. 
C)  initially increases, then decreases. 
D)  initially decreases, then increases. 
A)  increases. 
B)  decreases. 
C)  initially increases, then decreases. 
D)  initially decreases, then increases.

Question 20

Goods and services of value to households are

Accepted Answer

A)  inputs in the production process. 
B)  outputs in the production process. 
C)  both inputs and outputs in the production process. 
D)  unrelated to the production process. 
A)  inputs in the production process. 
B)  outputs in the production process. 
C)  both inputs and outputs in the production process. 
D)  unrelated to the production process.

Exam 2: The Economic Problem: Scarcity and Choice

Related to the Economics in Practice on page 26: Which one of the following occurs when an individual enters the paid work force?

If scarcity was eliminated

Refer to the information provided in Figure 2.6 below to answer the question(s) that follow. Figure 2.6 -Refer to Figure 2.6. If the economy is at ppf2, a change in consumer taste would be shown by a

From 1935 to 2017, the yield per acre for wheat has ________ in the United States.

Price is the coordinating mechanism in a laissez-faire economy.

An example of an investment is

Advocates of an unregulated market system argue that

All the combinations of goods and services that can be produced if all of society's resources are used efficiently are represented on an economy's

For an economy to produce at a point beyond its current ppf, the economy must

The economic problem can best be stated as:

All markets involve buyers and sellers engaging in exchange.

Refer to the information provided in Figure 2.4 below to answer the question(s) that follow. Figure 2.4 -According to Figure 2.4, the point where only motorcycles are produced is

Refer to the information provided in Figure 2.3 below to answer the question(s) that follow. Figure 2.3 -Refer to Figure 2.3. The law of ________ opportunity costs is best depicted by the production possibilities frontier in Panel A.

A command economy eliminates markets.

Refer to the information provided in Figure 2.6 below to answer the question(s) that follow. Figure 2.6 -Refer to Figure 2.6. Which of the following is most likely to shift the production possibility frontier from ppf1 to ppf2?

In terms of the production possibility frontier, an increase in productivity attributable to new technology would best be shown by

Production decisions are centralized in a(n)

Refer to the information provided in Figure 2.2 below for the economy of Microland to answer the question(s) that follow. Figure 2.2 -Refer to Figure 2.2. Point B represents a situation of

As you move down the production possibility frontier, the absolute value of the marginal rate of transformation

Goods and services of value to households are

The Scope and Method of Economics

Demand, Supply, and Market Equilibrium

Demand and Supply Applications

Elasticity

Household Behavior and Consumer Choice

The Production Process: the Behavior of Profit-Maximizing Firms

Short-Run Costs and Output Decisions

Long-Run Costs and Output Decisions

Input Demand: the Labor and Land Markets

Input Demand: the Capital Market and the Investment Decision

General Equilibrium and the Efficiency of Perfect Competition

Monopoly and Antitrust Policy

Oligopoly

Monopolistic Competition

Externalities, Public Goods, and Common Resources

Uncertainty and Asymmetric Information

Income Distribution and Poverty

Public Finance: the Economics of Taxation

International Trade, Comparative Advantage, and Protectionism

Economic Growth in Developing Economies

Critical Thinking About Research

Filters

Refer to the information provided in Figure 2.6 below to answer the question(s) that follow. Figure 2.6 -Refer to Figure 2.6. If the economy is at ppf^{2, a change in consumer taste would be shown by a}

Refer to the information provided in Figure 2.6 below to answer the question(s) that follow. Figure 2.6 -Refer to Figure 2.6. Which of the following is most likely to shift the production possibility frontier from ppf¹ to ppf²?