Question 1

Opportunity cost:

Accepted Answer

A)  represents the best alternative sacrificed for a chosen alternative. 
B)  has no relationship to the various alternatives that must be given up when a choice is made in the context of scarcity. 
C)  represents the worst alternative sacrificed for a chosen alternative. 
D)  Represents all possible alternatives sacrificed for a chosen alternative. 
A)  represents the best alternative sacrificed for a chosen alternative. 
B)  has no relationship to the various alternatives that must be given up when a choice is made in the context of scarcity. 
C)  represents the worst alternative sacrificed for a chosen alternative. 
D)  Represents all possible alternatives sacrificed for a chosen alternative.

Question 2

Of all the points on the production possibilities curve, only one point represents an efficient point.

Accepted Answer

A) True 
 B)False

Question 3

Exhibit 2-4 Production possibilities curve data $$\begin{array} { | l | r | r | r | r | r | } 
\hline & { \text { A } } &{ \text { B } } & { \text { C } } & \text { D } & \text { E } \
\hline \text { Capital goods } & 0 & 10 & 20 & 30 & 40 \
\text { Consume goods } & 200 & 180 & 140 & 80 & 0 \
\hline
\end{array}$$
-According to the data in Exhibit 2-4, a total output of 140 units of consumer goods and 10 units of capital goods would:

Accepted Answer

A)  be unobtainable in this economy. 
B)  be an efficient way of using the economy's scarce resources. 
C)  result in the maximum use of the economy's labor force. 
D)  result in a less than maximum rate of growth for this economy. 
A)  be unobtainable in this economy. 
B)  be an efficient way of using the economy's scarce resources. 
C)  result in the maximum use of the economy's labor force. 
D)  result in a less than maximum rate of growth for this economy.

Question 4

Which of the following is not true about a production possibilities curve? The curve:

Accepted Answer

A)  indicates the combinations of goods and services that can be produced with given technology. 
B)  indicates the efficient production points. 
C)  indicates the non-efficient production points. 
D)  indicates the feasible (attainable) and non-feasible production points. 
E)  indicates which production point will be chosen. 
A)  indicates the combinations of goods and services that can be produced with given technology. 
B)  indicates the efficient production points. 
C)  indicates the non-efficient production points. 
D)  indicates the feasible (attainable) and non-feasible production points. 
E)  indicates which production point will be chosen.

Question 5

According to marginal analysis, you should spend more time studying economics if the extra benefit from an additional hour of study:

Accepted Answer

A)  is positive. 
B)  outweighs the extra cost. 
C)  exceeds the benefits of the previous hour of study. 
D)  will raise your exam score. 
A)  is positive. 
B)  outweighs the extra cost. 
C)  exceeds the benefits of the previous hour of study. 
D)  will raise your exam score.

Question 6

Marginal analysis examines the effects of additions to or subtractions from a current situation.

Accepted Answer

A) True 
 B)False

Question 7

What to produce, how to produce, and for who to produce are the three fundamental economic questions.

Accepted Answer

A) True 
 B)False

Question 8

In the context of the production possibilities curve, opportunity cost is measured in:

Accepted Answer

A)  dollars paid for the goods. 
B)  the quantity of other goods given up. 
C)  the value of the resources used. 
D)  changing technology. 
E)  units of satisfaction. 
A)  dollars paid for the goods. 
B)  the quantity of other goods given up. 
C)  the value of the resources used. 
D)  changing technology. 
E)  units of satisfaction.

Question 9

Why are all costs really "opportunity costs"?

Accepted Answer

An opportunity cost is what must be give

Question 10

Given a production possibilities curve, a point:

Accepted Answer

A)  inside the curve represents unemployment. 
B)  on the curve represents full employment. 
C)  outside the curve is currently unattainable. 
D)  all of these. 
A)  inside the curve represents unemployment. 
B)  on the curve represents full employment. 
C)  outside the curve is currently unattainable. 
D)  all of these.

Question 11

Which word or phrase best completes the following sentence? Marginal analysis means evaluating _________ changes from a current situation. ​

Accepted Answer

A)  ​positive or negative. 
B)  ​ infinite. 
C)  ​alternating. 
D)  ​ maximum. 
A)  ​positive or negative. 
B)  ​ infinite. 
C)  ​alternating. 
D)  ​ maximum.

Question 12

The production possibilities curve depicts the various combinations of two goods that can be:

Accepted Answer

A)  interchanged among two countries. 
B)  produced with a given technology. 
C)  consumed with a given quantity of resources. 
D)  produced with increments in resources and changes in technology. 
E)  consumed as the resources increase. 
A)  interchanged among two countries. 
B)  produced with a given technology. 
C)  consumed with a given quantity of resources. 
D)  produced with increments in resources and changes in technology. 
E)  consumed as the resources increase.

Question 13

Exhibit 2-13 Production possibilities curve  
-In Exhibit 2-13, in terms of efficiency:

Accepted Answer

A)  point A is preferred to point B. 
B)  point A is preferred to point E. 
C)  point A is preferred to point D. 
D)  point B is preferred to point A. 
E)  point B is preferred to point C. 
A)  point A is preferred to point B. 
B)  point A is preferred to point E. 
C)  point A is preferred to point D. 
D)  point B is preferred to point A. 
E)  point B is preferred to point C.

Question 14

Exhibit 2-15 Production possibilities curve  
-In Exhibit 2-15, what can we conclude about point Q?

Accepted Answer

A)  It is efficient. 
B)  It is inefficient. 
C)  It is unattainable. 
D)  It gives maximum future growth. 
E)  It shows underemployed resources. 
A)  It is efficient. 
B)  It is inefficient. 
C)  It is unattainable. 
D)  It gives maximum future growth. 
E)  It shows underemployed resources.

Question 15

The production possibilities curve for the nation of Economagic shifts to the left. This could have been caused by:

Accepted Answer

A)  an increase in Economagic's labor supply. 
B)  innovation in the production of goods in Economagic. 
C)  a war that destroyed some of Economagic's resource base. 
D)  unemployment among Economagic's workers. 
E)  Economagic's choice of more consumption and less capital last period. 
A)  an increase in Economagic's labor supply. 
B)  innovation in the production of goods in Economagic. 
C)  a war that destroyed some of Economagic's resource base. 
D)  unemployment among Economagic's workers. 
E)  Economagic's choice of more consumption and less capital last period.

Question 16

On the production possibilities curve, a movement between points that yields a loss of one good in order to raise the output of another good will maintain efficient production.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statements is true?

Accepted Answer

A)  An opportunity cost is what must be given up in order to get something else. 
B)  The three fundamental economic questions refer to What to produce? How to produce? and When to produce? 
C)  The term "investment" refers to the purchase of stocks and bonds and other financial securities. 
D)  The law of increasing opportunity cost implies that as production of one type of good is expanded then fewer and fewer of other goods must be given up. 
A)  An opportunity cost is what must be given up in order to get something else. 
B)  The three fundamental economic questions refer to What to produce? How to produce? and When to produce? 
C)  The term "investment" refers to the purchase of stocks and bonds and other financial securities. 
D)  The law of increasing opportunity cost implies that as production of one type of good is expanded then fewer and fewer of other goods must be given up.

Question 18

The most efficient point on the production possibilities curve is the midpoint on the curve.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following most accurately indicates the implications of an economy's production possibilities curve?

Accepted Answer

A)  If all the resources of an economy are being used efficiently, more of one good can be produced only if less of another good is produced. 
B)  If all the resources of an economy are being used efficiently, it is generally possible to produce more of one good without having to sacrifice the production of other goods. 
C)  Over time, it is generally impossible for a country to expand its production of goods. 
D)  An economy will automatically move toward a point that lies outside of the production possibilities constraint unless proper government policy constrains production. 
A)  If all the resources of an economy are being used efficiently, more of one good can be produced only if less of another good is produced. 
B)  If all the resources of an economy are being used efficiently, it is generally possible to produce more of one good without having to sacrifice the production of other goods. 
C)  Over time, it is generally impossible for a country to expand its production of goods. 
D)  An economy will automatically move toward a point that lies outside of the production possibilities constraint unless proper government policy constrains production.

Question 20

Susan wishes to buy gasoline and have her car washed. She finds that if she buys 9 gallons of gasoline at $1.50 per gallon, the car wash costs $1, but if she buys 10 gallons of gasoline, the car wash is free. For Susan, the marginal cost of the tenth gallon of gasoline is:

Accepted Answer

A)  zero. 
B)  50 cents. 
C)  $1. 
D)  $1.50. 
A)  zero. 
B)  50 cents. 
C)  $1. 
D)  $1.50.

Opportunity cost:

Of all the points on the production possibilities curve, only one point represents an efficient point.

Exhibit 2-4 Production possibilities curve data A B C D E Capital goods 0 10 20 30 40 Consume goods 200 180 140 80 0 -According to the data in Exhibit 2-4, a total output of 140 units of consumer goods and 10 units of capital goods would:

Which of the following is not true about a production possibilities curve? The curve:

According to marginal analysis, you should spend more time studying economics if the extra benefit from an additional hour of study:

Marginal analysis examines the effects of additions to or subtractions from a current situation.

What to produce, how to produce, and for who to produce are the three fundamental economic questions.

In the context of the production possibilities curve, opportunity cost is measured in:

Why are all costs really "opportunity costs"?

Given a production possibilities curve, a point:

Which word or phrase best completes the following sentence? Marginal analysis means evaluating _________ changes from a current situation.

The production possibilities curve depicts the various combinations of two goods that can be:

Exhibit 2-13 Production possibilities curve -In Exhibit 2-13, in terms of efficiency:

Exhibit 2-15 Production possibilities curve -In Exhibit 2-15, what can we conclude about point Q?

The production possibilities curve for the nation of Economagic shifts to the left. This could have been caused by:

On the production possibilities curve, a movement between points that yields a loss of one good in order to raise the output of another good will maintain efficient production.

Which of the following statements is true?

The most efficient point on the production possibilities curve is the midpoint on the curve.

Which of the following most accurately indicates the implications of an economy's production possibilities curve?

Susan wishes to buy gasoline and have her car washed. She finds that if she buys 9 gallons of gasoline at $1.50 per gallon, the car wash costs $1, but if she buys 10 gallons of gasoline, the car wash is free. For Susan, the marginal cost of the tenth gallon of gasoline is:

Introducing the Economic Way of Thinking

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution, Poverty, and Discrimination

Antitrust and Regulation

Environmental Economics

International Trade and Finance

Economies in Transition

Growth and the

Filters

Exam 2: Production Possibilities, Opportunity Cost, and Economic Growth

Opportunity cost:

Of all the points on the production possibilities curve, only one point represents an efficient point.

Exhibit 2-4 Production possibilities curve data A B C D E Capital goods 0 10 20 30 40 Consume goods 200 180 140 80 0 -According to the data in Exhibit 2-4, a total output of 140 units of consumer goods and 10 units of capital goods would:

Which of the following is not true about a production possibilities curve? The curve:

According to marginal analysis, you should spend more time studying economics if the extra benefit from an additional hour of study:

Marginal analysis examines the effects of additions to or subtractions from a current situation.

What to produce, how to produce, and for who to produce are the three fundamental economic questions.

In the context of the production possibilities curve, opportunity cost is measured in:

Why are all costs really "opportunity costs"?

Given a production possibilities curve, a point:

Which word or phrase best completes the following sentence? Marginal analysis means evaluating _________ changes from a current situation. ​

The production possibilities curve depicts the various combinations of two goods that can be:

Exhibit 2-13 Production possibilities curve -In Exhibit 2-13, in terms of efficiency:

Exhibit 2-15 Production possibilities curve -In Exhibit 2-15, what can we conclude about point Q?

The production possibilities curve for the nation of Economagic shifts to the left. This could have been caused by:

On the production possibilities curve, a movement between points that yields a loss of one good in order to raise the output of another good will maintain efficient production.

Which of the following statements is true?

The most efficient point on the production possibilities curve is the midpoint on the curve.

Which of the following most accurately indicates the implications of an economy's production possibilities curve?

Susan wishes to buy gasoline and have her car washed. She finds that if she buys 9 gallons of gasoline at $1.50 per gallon, the car wash costs $1, but if she buys 10 gallons of gasoline, the car wash is free. For Susan, the marginal cost of the tenth gallon of gasoline is:

Introducing the Economic Way of Thinking

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution, Poverty, and Discrimination

Antitrust and Regulation

Environmental Economics

International Trade and Finance

Economies in Transition

Growth and the

Filters

Which word or phrase best completes the following sentence? Marginal analysis means evaluating _________ changes from a current situation.