Question 1

In the United States, the government coordinates most of the economic activity.

Accepted Answer

A) True 
 B)False  False

Question 2

The PPF shifts if

Accepted Answer

A)  the unemployment rate falls. 
B)  people decide they want more of one good and less of another. 
C)  the prices of the goods and services produced rise. 
D)  the resources available to the nation change. 
A)  the unemployment rate falls. 
B)  people decide they want more of one good and less of another. 
C)  the prices of the goods and services produced rise. 
D)  the resources available to the nation change. D

Question 3

-The above table shows production combinations on a country's production possibilities frontier. Which of the following is an example of a point that is unattainable?

Accepted Answer

A)  0 units of good X and 40 units of good Y 
B)  6 units of good X and 28 units of good Y 
C)  10 units of good X and 16 units of good Y 
D)  3 units of good X and 35 units of good Y 
A)  0 units of good X and 40 units of good Y 
B)  6 units of good X and 28 units of good Y 
C)  10 units of good X and 16 units of good Y 
D)  3 units of good X and 35 units of good Y C

Question 4

Suppose the United States discovers a way to produce clean nuclear fuel. The effect of this discovery would be to

Accepted Answer

A)  lead the United States to produce less nuclear fuel. 
B)  force the United States to produce at a point inside its PPF. 
C)  shift the U.S. PPF outward. 
D)  shift the U.S. PPF inward. 
A)  lead the United States to produce less nuclear fuel. 
B)  force the United States to produce at a point inside its PPF. 
C)  shift the U.S. PPF outward. 
D)  shift the U.S. PPF inward.

Question 5

Assuming farmers can plant either corn or soybeans, as U.S. farmers plant more corn to meet rising global demand

Accepted Answer

A)  the opportunity cost of producing corn increases. 
B)  the opportunity cost of producing corn decreases. 
C)  the U.S. PPF for corn and other goods and services shifts outward. 
D)  the United States produces at a point beyond its PPF. 
A)  the opportunity cost of producing corn increases. 
B)  the opportunity cost of producing corn decreases. 
C)  the U.S. PPF for corn and other goods and services shifts outward. 
D)  the United States produces at a point beyond its PPF.

Question 6

A factor market is a market in which

Accepted Answer

A)  households buy goods and services. 
B)  households sell the services of the factors of production they control. 
C)  firms sell the services of the factors of production. 
D)  firms sell goods and services. 
A)  households buy goods and services. 
B)  households sell the services of the factors of production they control. 
C)  firms sell the services of the factors of production. 
D)  firms sell goods and services.

Question 7

Marginal cost is the opportunity cost

Accepted Answer

A)  that your activity imposes on someone else. 
B)  that arises from producing one more unit of a good or service. 
C)  of a good or service that exceeds its benefit. 
D)  of a good or service divided by the number of units produced. 
A)  that your activity imposes on someone else. 
B)  that arises from producing one more unit of a good or service. 
C)  of a good or service that exceeds its benefit. 
D)  of a good or service divided by the number of units produced.

Question 8

The social arrangement that gives John Grisham, the writer of best-selling novels, the ownership of his novels is

Accepted Answer

A)  a market. 
B)  property rights. 
C)  absolute advantage. 
D)  dynamic comparative advantage. 
A)  a market. 
B)  property rights. 
C)  absolute advantage. 
D)  dynamic comparative advantage.

Question 9

The social arrangements that govern the ownership, use, and disposal of property are referred to as

Accepted Answer

A)  the double coincidence of wants. 
B)  capitalism. 
C)  private enterprise. 
D)  property rights. 
A)  the double coincidence of wants. 
B)  capitalism. 
C)  private enterprise. 
D)  property rights.

Question 10

Economic growth is the result of all of the following except

Accepted Answer

A)  technological change. 
B)  capital accumulation. 
C)  opportunity cost. 
D)  investment in human capital. 
A)  technological change. 
B)  capital accumulation. 
C)  opportunity cost. 
D)  investment in human capital.

Question 11

A person has a comparative advantage in an activity if that person can

Accepted Answer

A)  produce more goods in a given amount of time than another person. 
B)  produce fewer goods in a given amount of time than another person. 
C)  perform the activity at a lower opportunity cost than anyone else. 
D)  perform that activity at a higher opportunity cost than anyone else. 
A)  produce more goods in a given amount of time than another person. 
B)  produce fewer goods in a given amount of time than another person. 
C)  perform the activity at a lower opportunity cost than anyone else. 
D)  perform that activity at a higher opportunity cost than anyone else.

Question 12

-In the figure above, if the quantity of yogurt produced increases from 2 gallons an hour to 3 gallons an hour, the opportunity cost of a gallon of yogurt in terms of ice cream is

Accepted Answer

A)  half a gallon. 
B)  1 gallon. 
C)  3 gallons. 
D)  4 gallons. 
A)  half a gallon. 
B)  1 gallon. 
C)  3 gallons. 
D)  4 gallons.

Question 13

Economic growth

Accepted Answer

A)  leads to less consumption in the present and increased consumption in the future. 
B)  is free. 
C)  is the major reason we face scarcity. 
D)  allows us to increase our consumption in the present and in the future. 
A)  leads to less consumption in the present and increased consumption in the future. 
B)  is free. 
C)  is the major reason we face scarcity. 
D)  allows us to increase our consumption in the present and in the future.

Question 14

-In the table above, country A is producing 4 units of X and 8 units of Y and country B is producing 4 units of X and 6 units of Y. Regarding the production of good X

Accepted Answer

A)  country A has an absolute advantage. 
B)  country B has an absolute advantage. 
C)  country A has a comparative advantage. 
D)  country B has a comparative advantage. 
A)  country A has an absolute advantage. 
B)  country B has an absolute advantage. 
C)  country A has a comparative advantage. 
D)  country B has a comparative advantage.

Question 15

-In the figure above, the curve is known as the

Accepted Answer

A)  production possibilities frontier. 
B)  substitution options frontier. 
C)  production function. 
D)  opportunity cost curve. 
A)  production possibilities frontier. 
B)  substitution options frontier. 
C)  production function. 
D)  opportunity cost curve.

Question 16

Property rights facilitate the development of trade.

Accepted Answer

A) True 
 B)False

Question 17

A country produces only pencils and erasers. Pencil production is allocatively efficient if the marginal ________ of a pencil equals the marginal ________ of ________.

Accepted Answer

A)  cost; benefit; an eraser 
B)  cost; cost; an eraser 
C)  benefit; benefit; an eraser 
D)  benefit; cost; a pencil 
A)  cost; benefit; an eraser 
B)  cost; cost; an eraser 
C)  benefit; benefit; an eraser 
D)  benefit; cost; a pencil

Question 18

Suppose Joe can prepare 10 sandwiches or 5 pizzas in an hour and Beth can produce 12 sandwiches or 9 pizzas. Which of the following is TRUE?

Accepted Answer

A)  Beth should produce pizza because she has a higher opportunity cost of producing pizza than does Joe. 
B)  Beth should produce pizza because she has a lower opportunity cost of producing pizza than does Joe. 
C)  Joe should produce pizza because he has a higher opportunity cost of producing pizza than does Beth. 
D)  Joe should produce pizza because he has a lower opportunity cost of producing pizza than does Beth. 
A)  Beth should produce pizza because she has a higher opportunity cost of producing pizza than does Joe. 
B)  Beth should produce pizza because she has a lower opportunity cost of producing pizza than does Joe. 
C)  Joe should produce pizza because he has a higher opportunity cost of producing pizza than does Beth. 
D)  Joe should produce pizza because he has a lower opportunity cost of producing pizza than does Beth.

Question 19

-The figure above illustrates that if this country wishes to have F2 - F1 additional food by moving from point A to point B, it will

Accepted Answer

A)  have to find additional workers, because the country already is operating on its production possibilities frontier. 
B)  be unable to do so until additional technological progress is made. 
C)  have to sacrifice C1 - C2 clothing in order to free the resources necessary to produce the additional food. 
D)  require that all the unemployed resources in the country be put to work. 
A)  have to find additional workers, because the country already is operating on its production possibilities frontier. 
B)  be unable to do so until additional technological progress is made. 
C)  have to sacrifice C1 - C2 clothing in order to free the resources necessary to produce the additional food. 
D)  require that all the unemployed resources in the country be put to work.

Question 20

Explain why the production possibilities frontier bows outward.

Accepted Answer

The bowed outward PPF reflects increasin

In the United States, the government coordinates most of the economic activity.

The PPF shifts if

-The above table shows production combinations on a country's production possibilities frontier. Which of the following is an example of a point that is unattainable?

Suppose the United States discovers a way to produce clean nuclear fuel. The effect of this discovery would be to

Assuming farmers can plant either corn or soybeans, as U.S. farmers plant more corn to meet rising global demand

A factor market is a market in which

Marginal cost is the opportunity cost

The social arrangement that gives John Grisham, the writer of best-selling novels, the ownership of his novels is

The social arrangements that govern the ownership, use, and disposal of property are referred to as

Economic growth is the result of all of the following except

A person has a comparative advantage in an activity if that person can

-In the figure above, if the quantity of yogurt produced increases from 2 gallons an hour to 3 gallons an hour, the opportunity cost of a gallon of yogurt in terms of ice cream is

Economic growth

-In the table above, country A is producing 4 units of X and 8 units of Y and country B is producing 4 units of X and 6 units of Y. Regarding the production of good X

-In the figure above, the curve is known as the

Property rights facilitate the development of trade.

A country produces only pencils and erasers. Pencil production is allocatively efficient if the marginal of a pencil equals the marginal of .

Suppose Joe can prepare 10 sandwiches or 5 pizzas in an hour and Beth can produce 12 sandwiches or 9 pizzas. Which of the following is TRUE?

-The figure above illustrates that if this country wishes to have F₂ - F₁ additional food by moving from point A to point B, it will

Explain why the production possibilities frontier bows outward.

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 Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 2: The Economic Problem

In the United States, the government coordinates most of the economic activity.

The PPF shifts if

-The above table shows production combinations on a country's production possibilities frontier. Which of the following is an example of a point that is unattainable?

Suppose the United States discovers a way to produce clean nuclear fuel. The effect of this discovery would be to

Assuming farmers can plant either corn or soybeans, as U.S. farmers plant more corn to meet rising global demand

A factor market is a market in which

Marginal cost is the opportunity cost

The social arrangement that gives John Grisham, the writer of best-selling novels, the ownership of his novels is

The social arrangements that govern the ownership, use, and disposal of property are referred to as

Economic growth is the result of all of the following except

A person has a comparative advantage in an activity if that person can

-In the figure above, if the quantity of yogurt produced increases from 2 gallons an hour to 3 gallons an hour, the opportunity cost of a gallon of yogurt in terms of ice cream is

Economic growth

-In the table above, country A is producing 4 units of X and 8 units of Y and country B is producing 4 units of X and 6 units of Y. Regarding the production of good X

-In the figure above, the curve is known as the

Property rights facilitate the development of trade.

A country produces only pencils and erasers. Pencil production is allocatively efficient if the marginal ________ of a pencil equals the marginal ________ of ________.

Suppose Joe can prepare 10 sandwiches or 5 pizzas in an hour and Beth can produce 12 sandwiches or 9 pizzas. Which of the following is TRUE?

-The figure above illustrates that if this country wishes to have F2 - F1 additional food by moving from point A to point B, it will

Explain why the production possibilities frontier bows outward.

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 Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

A country produces only pencils and erasers. Pencil production is allocatively efficient if the marginal of a pencil equals the marginal of .

-The figure above illustrates that if this country wishes to have F₂ - F₁ additional food by moving from point A to point B, it will