Question 1

On a straight-line production possibilities frontier,which of the following is true?

Accepted Answer

A) The problem of scarcity does not exist. 
B) Resources are imperfect substitutes. 
C) Opportunity costs are constant. 
D) Technology is rapidly expanding. 
E) Some resources are not being used efficiently. 
A) The problem of scarcity does not exist. 
B) Resources are imperfect substitutes. 
C) Opportunity costs are constant. 
D) Technology is rapidly expanding. 
E) Some resources are not being used efficiently.

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Suppose you have an hour before your next class starts.You can either read a book,get something to eat,or take a nap.The opportunity cost of getting something to eat is:

Accepted Answer

A) the cost of what you eat. 
B) the value of reading and sleeping. 
C) the loss of value from not reading or sleeping. 
D) the net benefit of sleeping for another hour. 
E) impossible to determine because the most preferred alternative is not known. 
A) the cost of what you eat. 
B) the value of reading and sleeping. 
C) the loss of value from not reading or sleeping. 
D) the net benefit of sleeping for another hour. 
E) impossible to determine because the most preferred alternative is not known.

Question 4

The figure below shows the production possibilities frontier for Good A and Good B.In the figure below,which of the following points represents an inefficient use of the economy's resources?

Accepted Answer

A) h. 
B) d. 
C) f. 
D) i. 
E) e. 
A) h. 
B) d. 
C) f. 
D) i. 
E) e.

Question 5

Eileen has a comparative advantage over Jan in piano tuning,but not shoe polishing.Therefore,_____.

Accepted Answer

A) Jan must have an absolute advantage in piano tuning 
B) Eileen must have an absolute advantage in shoe polishing 
C) Jan must have a lower opportunity cost of shoe polishing 
D) Eileen must have an absolute advantage in shoe polishing and in piano tuning 
E) Eileen must have an absolute advantage in piano tuning 
A) Jan must have an absolute advantage in piano tuning 
B) Eileen must have an absolute advantage in shoe polishing 
C) Jan must have a lower opportunity cost of shoe polishing 
D) Eileen must have an absolute advantage in shoe polishing and in piano tuning 
E) Eileen must have an absolute advantage in piano tuning

Question 6

Every economy must answer each of the following questions except one.Which is the exception?

Accepted Answer

A) Which goods will be produced? 
B) Why are these particular goods produced? 
C) Which resources should be used? 
D) How should resources be combined to produce each product? 
E) Who will actually consume the goods produced? 
A) Which goods will be produced? 
B) Why are these particular goods produced? 
C) Which resources should be used? 
D) How should resources be combined to produce each product? 
E) Who will actually consume the goods produced?

Question 7

It is possible for one person to have an absolute advantage in something even if she has no comparative advantage in anything.

Accepted Answer

A) True 
 B)False

Question 8

Suppose you have purchased a nonrefundable plane ticket and,at the last moment,cannot take the trip.You can,however,sell the ticket.If you paid $700 for the ticket,the cost of sending the ticket to someone through overnight mail is $20,and you spend $10 on a courier to get the ticket to the post office for overnight delivery,what is the minimum you should accept for the ticket?

Accepted Answer

A) $700 because that is what the ticket cost 
B) $720 because that is the cost of the ticket and of getting it to the buyer 
C) $730 because that is the total cost of the ticket and getting it to the buyer 
D) More than $730,so that you can make a profit 
E) $30 because the $700 is a sunk cost 
A) $700 because that is what the ticket cost 
B) $720 because that is the cost of the ticket and of getting it to the buyer 
C) $730 because that is the total cost of the ticket and getting it to the buyer 
D) More than $730,so that you can make a profit 
E) $30 because the $700 is a sunk cost

Question 9

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 10

The figure given below shows the production possibilities frontier for education and food.In The opportunity cost of moving from point c to point b is _____.

Accepted Answer

A) 3 units of food 
B) 22 units of education 
C) 1 unit of food 
D) 12 units of education 
E) 62 units of education 
A) 3 units of food 
B) 22 units of education 
C) 1 unit of food 
D) 12 units of education 
E) 62 units of education

Question 11

A production possibilities frontier can shift outward for all of the following reasons except:

Accepted Answer

A) a decrease in the size of the labor force. 
B) an increase in the skills of the labor force. 
C) an improvement in technology. 
D) a larger work force. 
E) a larger capital stock. 
A) a decrease in the size of the labor force. 
B) an increase in the skills of the labor force. 
C) an improvement in technology. 
D) a larger work force. 
E) a larger capital stock.

Question 12

An outward shift of the production possibilities frontier:

Accepted Answer

A) reflects economic stability. 
B) reflects economic growth. 
C) reflects economic decline. 
D) does not relate to the state of the economy. 
E) is always a parallel shift. 
A) reflects economic stability. 
B) reflects economic growth. 
C) reflects economic decline. 
D) does not relate to the state of the economy. 
E) is always a parallel shift.

Question 13

A test is scheduled for Monday morning,and you went to a party on Sunday night.If you hadn't attended the party,you could have studied for the test or gone to a movie.Which of the following is true regarding your opportunity cost?

Accepted Answer

A) The opportunity cost of going to the movie is studying for the test. 
B) The opportunity cost of going to the party is watching the movie. 
C) The opportunity cost of going to the party is both watching the movie and the study time. 
D) Because you could go to the party only that night,but could go to a movie any time,the opportunity cost of the party is the study time. 
E) From the above information,it's not possible to determine the opportunity cost of attending the party. 
A) The opportunity cost of going to the movie is studying for the test. 
B) The opportunity cost of going to the party is watching the movie. 
C) The opportunity cost of going to the party is both watching the movie and the study time. 
D) Because you could go to the party only that night,but could go to a movie any time,the opportunity cost of the party is the study time. 
E) From the above information,it's not possible to determine the opportunity cost of attending the party.

Question 14

The division of labor facilitates productivity increases for all of the following reasons,except one.Which is the exception?

Accepted Answer

A) It allows people to do those tasks for which they have the greatest natural ability. 
B) Workers get better at tasks the more they repeat them. 
C) The more experience workers gain by specializing in a task,the more likely they will enjoy that task. 
D) More sophisticated production techniques are introduced. 
E) It often permits the introduction of labor-saving machinery. 
A) It allows people to do those tasks for which they have the greatest natural ability. 
B) Workers get better at tasks the more they repeat them. 
C) The more experience workers gain by specializing in a task,the more likely they will enjoy that task. 
D) More sophisticated production techniques are introduced. 
E) It often permits the introduction of labor-saving machinery.

Question 15

The economic question of what will be produced is:

Accepted Answer

A) primarily answered by the government in a system of pure capitalism. 
B) primarily answered by markets in a command economy. 
C) faced by all economies regardless of their wealth. 
D) does not have to be answered by economies possessing great wealth. 
E) cannot be illustrated by the economic concept of the production possibilities frontier. 
A) primarily answered by the government in a system of pure capitalism. 
B) primarily answered by markets in a command economy. 
C) faced by all economies regardless of their wealth. 
D) does not have to be answered by economies possessing great wealth. 
E) cannot be illustrated by the economic concept of the production possibilities frontier.

Question 16

A medium of exchange must be:

Accepted Answer

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

Question 17

On a given production possibilities frontier,which of the following is not assumed to be fixed?

Accepted Answer

A) The amount of labor available 
B) The amount of capital available 
C) The level of technology 
D) The amount of land and natural resources available 
E) Production of each item 
A) The amount of labor available 
B) The amount of capital available 
C) The level of technology 
D) The amount of land and natural resources available 
E) Production of each item

Question 18

Points inside the production possibilities frontier represent:

Accepted Answer

A) full and efficient use of all resources. 
B) inefficiency or unemployment. 
C) currently unattainable combinations of outputs. 
D) currently unattainable combinations of resources. 
E) the most desirable combinations of outputs. 
A) full and efficient use of all resources. 
B) inefficiency or unemployment. 
C) currently unattainable combinations of outputs. 
D) currently unattainable combinations of resources. 
E) the most desirable combinations of outputs.

Question 19

Melissa is a self-employed lawyer who chooses a higher-priced restaurant 2 miles from home over a cheaper restaurant 15 miles from home.Which of the following is the most likely explanation for her behavior?

Accepted Answer

A) The opportunity cost of her time is very low. 
B) She doesn't take travel time into consideration. 
C) She doesn't like to cook or doesn't know how to cook. 
D) The prices at the more expensive restaurant understate the opportunity cost of eating there. 
E) The higher monetary cost of the more expensive restaurant is offset by the higher opportunity cost of the lower-priced restaurant. 
A) The opportunity cost of her time is very low. 
B) She doesn't take travel time into consideration. 
C) She doesn't like to cook or doesn't know how to cook. 
D) The prices at the more expensive restaurant understate the opportunity cost of eating there. 
E) The higher monetary cost of the more expensive restaurant is offset by the higher opportunity cost of the lower-priced restaurant.

Question 20

In a command economy,_____.

Accepted Answer

A) a dictator makes every economic decision 
B) owners can sell their resources to the highest bidder 
C) no individual or group coordinates the economy 
D) in theory,individual choices are reflected in collective decisions and decisions are made by central planners. 
E) public ownership of resources is combined with free markets to direct economic activity 
A) a dictator makes every economic decision 
B) owners can sell their resources to the highest bidder 
C) no individual or group coordinates the economy 
D) in theory,individual choices are reflected in collective decisions and decisions are made by central planners. 
E) public ownership of resources is combined with free markets to direct economic activity

On a straight-line production possibilities frontier,which of the following is true?

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

Suppose you have an hour before your next class starts.You can either read a book,get something to eat,or take a nap.The opportunity cost of getting something to eat is:

The figure below shows the production possibilities frontier for Good A and Good B.In the figure below,which of the following points represents an inefficient use of the economy's resources?

Eileen has a comparative advantage over Jan in piano tuning,but not shoe polishing.Therefore,_____.

Every economy must answer each of the following questions except one.Which is the exception?

It is possible for one person to have an absolute advantage in something even if she has no comparative advantage in anything.

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

The figure given below shows the production possibilities frontier for education and food.In The opportunity cost of moving from point c to point b is _____.

A production possibilities frontier can shift outward for all of the following reasons except:

An outward shift of the production possibilities frontier:

A test is scheduled for Monday morning,and you went to a party on Sunday night.If you hadn't attended the party,you could have studied for the test or gone to a movie.Which of the following is true regarding your opportunity cost?

The division of labor facilitates productivity increases for all of the following reasons,except one.Which is the exception?

The economic question of what will be produced is:

A medium of exchange must be:

On a given production possibilities frontier,which of the following is not assumed to be fixed?

Points inside the production possibilities frontier represent:

Melissa is a self-employed lawyer who chooses a higher-priced restaurant 2 miles from home over a cheaper restaurant 15 miles from home.Which of the following is the most likely explanation for her behavior?

In a command economy,_____.

The Art and Science of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the U S Economy

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

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Exam 2: Some Tools of Economic Analysis

On a straight-line production possibilities frontier,which of the following is true?

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

Suppose you have an hour before your next class starts.You can either read a book,get something to eat,or take a nap.The opportunity cost of getting something to eat is:

The figure below shows the production possibilities frontier for Good A and Good B.In the figure below,which of the following points represents an inefficient use of the economy's resources?

Eileen has a comparative advantage over Jan in piano tuning,but not shoe polishing.Therefore,_____.

Every economy must answer each of the following questions except one.Which is the exception?

It is possible for one person to have an absolute advantage in something even if she has no comparative advantage in anything.

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

The figure given below shows the production possibilities frontier for education and food.In The opportunity cost of moving from point c to point b is _____.

A production possibilities frontier can shift outward for all of the following reasons except:

An outward shift of the production possibilities frontier:

A test is scheduled for Monday morning,and you went to a party on Sunday night.If you hadn't attended the party,you could have studied for the test or gone to a movie.Which of the following is true regarding your opportunity cost?

The division of labor facilitates productivity increases for all of the following reasons,except one.Which is the exception?

The economic question of what will be produced is:

A medium of exchange must be:

On a given production possibilities frontier,which of the following is not assumed to be fixed?

Points inside the production possibilities frontier represent:

Melissa is a self-employed lawyer who chooses a higher-priced restaurant 2 miles from home over a cheaper restaurant 15 miles from home.Which of the following is the most likely explanation for her behavior?

In a command economy,_____.

The Art and Science of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the U S Economy

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters