Question 1

If Chris can produce a service using fewer resources than Pat would,then Chris

Accepted Answer

A)  has an absolute advantage in producing that service 
B)  has a comparative advantage in producing that service 
C)  has both an absolute advantage and a comparative advantage in producing that service 
D)  is productively efficient 
E)  cannot have a comparative advantage in producing that service 
A)  has an absolute advantage in producing that service 
B)  has a comparative advantage in producing that service 
C)  has both an absolute advantage and a comparative advantage in producing that service 
D)  is productively efficient 
E)  cannot have a comparative advantage in producing that service

Question 2

A society is saving lives (productively)efficiently if

Accepted Answer

A)  there are no unemployed resources in the health care sector 
B)  there are no unemployed resources anywhere in the economy 
C)  there is no way to save more lives 
D)  there is no way to save more lives without sacrificing some other goods or services 
E)  the opportunity cost of saving one more life is zero 
A)  there are no unemployed resources in the health care sector 
B)  there are no unemployed resources anywhere in the economy 
C)  there is no way to save more lives 
D)  there is no way to save more lives without sacrificing some other goods or services 
E)  the opportunity cost of saving one more life is zero

Question 3

In deciding to produce more agricultural goods and fewer manufactured goods,a society is addressing the question of

Accepted Answer

A)  where on its production possibilities frontier to operate 
B)  what production methods should be used to produce goods and services 
C)  how will output be allocated among the individuals in the society 
D)  what prices will be charged for goods and services 
E)  the optimal degree of central planning 
A)  where on its production possibilities frontier to operate 
B)  what production methods should be used to produce goods and services 
C)  how will output be allocated among the individuals in the society 
D)  what prices will be charged for goods and services 
E)  the optimal degree of central planning

Question 4

Which of the following is an example of productive inefficiency?

Accepted Answer

A)  Scientists discover a new substance that dramatically increases potential steel production. 
B)  A demographic boom leads to a rise in the number of workers in the labor force. 
C)  The rate of unemployment falls to zero. 
D)  Computer technicians are forced to answer telephones rather than perform their normal duties. 
E)  Due to economic growth,the economy reaches a new point along its production possibilities frontier. 
A)  Scientists discover a new substance that dramatically increases potential steel production. 
B)  A demographic boom leads to a rise in the number of workers in the labor force. 
C)  The rate of unemployment falls to zero. 
D)  Computer technicians are forced to answer telephones rather than perform their normal duties. 
E)  Due to economic growth,the economy reaches a new point along its production possibilities frontier.

Question 5

The concave shape of the production possibilities frontier reflects

Accepted Answer

A)  the law of comparative advantage 
B)  the law of absolute advantage 
C)  the law of increasing opportunity cost 
D)  the simplifying assumption of scarce resources 
E)  productive inefficiency 
A)  the law of comparative advantage 
B)  the law of absolute advantage 
C)  the law of increasing opportunity cost 
D)  the simplifying assumption of scarce resources 
E)  productive inefficiency

Question 6

The production possibilities frontier is useful for demonstrating both scarcity and productive inefficiency.

Accepted Answer

A) True 
 B)False

Question 7

If a society is operating on its production possibilities frontier,and then decides to produce less health care,

Accepted Answer

A)  its standard of living will fall 
B)  its standard of living will improve 
C)  some of its resources will become unemployed 
D)  it will be able to produce more of some other good or service 
E)  the opportunity cost of producing health care will rise 
A)  its standard of living will fall 
B)  its standard of living will improve 
C)  some of its resources will become unemployed 
D)  it will be able to produce more of some other good or service 
E)  the opportunity cost of producing health care will rise

Question 8

Figure 2-3
  
-Figure 2-3 shows the production possibilities frontier for a music processing plant that can produce both compact disks and cassettes.The opportunity cost of moving from point A to point E is

Accepted Answer

A)  zero 
B)  30 cassettes 
C)  180 compact disks 
D)  cannot be determined because point E is unattainable under current technology and resources 
E)  80 cassettes 
A)  zero 
B)  30 cassettes 
C)  180 compact disks 
D)  cannot be determined because point E is unattainable under current technology and resources 
E)  80 cassettes

Question 9

In a command system,the decision about what should be produced is made by

Accepted Answer

A)  a central authority 
B)  the market 
C)  repeating what was done in the past 
D)  business firms 
E)  consumers 
A)  a central authority 
B)  the market 
C)  repeating what was done in the past 
D)  business firms 
E)  consumers

Question 10

If an economy's production possibilities frontier shifted to the right,this would illustrate

Accepted Answer

A)  increasing opportunity cost 
B)  decreasing opportunity cost 
C)  a fall in resource utilization 
D)  economic growth 
E)  a rise in resource utilization 
A)  increasing opportunity cost 
B)  decreasing opportunity cost 
C)  a fall in resource utilization 
D)  economic growth 
E)  a rise in resource utilization

Question 11

$$\begin{array} { | c c c } 
\hline & \text { Fiejura 2-11 } \
\hline \text { Jails Fetched } & \text { Jack } & \text { Jill } \
\text { Per Hau } & & \
\text { Boards Sawed } & 20 & 4 \
\text { Per Hau } & 10 & 8 \
\hline
\end{array}$$
-According to the information in Figure 2-11,Jill's opportunity cost of sawing a board is

Accepted Answer

A)  5 pails of water 
B)  1/2 of a pail of water 
C)  4 pails of water 
D)  2 pails of water 
E)  8 pails of water 
A)  5 pails of water 
B)  1/2 of a pail of water 
C)  4 pails of water 
D)  2 pails of water 
E)  8 pails of water

Question 12

Figure 2-2
  
-Assume that U.S.agricultural land is used either to raise cattle for beef or to grow wheat.Figure 2-2 represents the production possibility frontier for beef and wheat.Production at point H is

Accepted Answer

A)  unattainable given currently available technology and resources 
B)  attainable by more fully employing already available resources 
C)  attainable by using better technology which is already available 
D)  attainable if beef production drops to zero 
E)  attainable if all available resources are used to produce wheat 
A)  unattainable given currently available technology and resources 
B)  attainable by more fully employing already available resources 
C)  attainable by using better technology which is already available 
D)  attainable if beef production drops to zero 
E)  attainable if all available resources are used to produce wheat

Question 13

Sven has a comparative advantage over Alice in cooking but not in doing the laundry.Which of the following must be true?

Accepted Answer

A)  Sven must have an absolute advantage in both cooking and doing the laundry. 
B)  Sven has a lower opportunity cost in doing the laundry. 
C)  Sven has an absolute advantage in doing the laundry. 
D)  Alice must have an absolute advantage in cooking. 
E)  Sven must have a lower opportunity cost than Alice for cooking. 
A)  Sven must have an absolute advantage in both cooking and doing the laundry. 
B)  Sven has a lower opportunity cost in doing the laundry. 
C)  Sven has an absolute advantage in doing the laundry. 
D)  Alice must have an absolute advantage in cooking. 
E)  Sven must have a lower opportunity cost than Alice for cooking.

Question 14

Suppose that the country of Utopia produces only steel and coffee.In 1998,Utopia produced 900 tons of steel and 500 pounds of coffee,while in 1999,it produced 1,000 tons of steel and 550 pounds of coffee.Assume that no technological changes occurred in the production of either good and the resource endowment of Utopia did not change.Which of the following is true?

Accepted Answer

A)  Utopia's opportunity cost of producing additional steel is 50 pounds of coffee. 
B)  Utopia's production must have been productively inefficient in 1998. 
C)  Utopia's opportunity cost of producing additional steel is 1/2 pound of coffee per ton of steel. 
D)  Utopia's opportunity cost of producing additional coffee is 100 tons of steel. 
E)  The production point in 1998 was unattainable given then-current resources and technology. 
A)  Utopia's opportunity cost of producing additional steel is 50 pounds of coffee. 
B)  Utopia's production must have been productively inefficient in 1998. 
C)  Utopia's opportunity cost of producing additional steel is 1/2 pound of coffee per ton of steel. 
D)  Utopia's opportunity cost of producing additional coffee is 100 tons of steel. 
E)  The production point in 1998 was unattainable given then-current resources and technology.

Question 15

An economy is said to be saving lives efficiently

Accepted Answer

A)  if the number of lives saved increases each year 
B)  whenever the cost of saving lives is decreasing 
C)  if it is operating on its production possibilities frontier 
D)  if more resources are devoted to saving lives than to any other activity 
E)  if fewer resources are devoted to saving lives than to any other activity 
A)  if the number of lives saved increases each year 
B)  whenever the cost of saving lives is decreasing 
C)  if it is operating on its production possibilities frontier 
D)  if more resources are devoted to saving lives than to any other activity 
E)  if fewer resources are devoted to saving lives than to any other activity

Question 16

The principle of specialization and exchange implies that

Accepted Answer

A)  total production is highest when individuals specialize according to their absolute advantages 
B)  productive inefficiency increases as producers in society specialize 
C)  exchange can only occur when there is specialization in the economy 
D)  gains from specialization will only occur when society is operating at a point along its production possibilities frontier 
E)  total production is highest when individuals specialize according to their comparative advantages 
A)  total production is highest when individuals specialize according to their absolute advantages 
B)  productive inefficiency increases as producers in society specialize 
C)  exchange can only occur when there is specialization in the economy 
D)  gains from specialization will only occur when society is operating at a point along its production possibilities frontier 
E)  total production is highest when individuals specialize according to their comparative advantages

Question 17

Tax collections in the United States are an example of

Accepted Answer

A)  tradition in a mainly market system 
B)  command in a mainly tradition system 
C)  market in a mainly tradition system 
D)  tradition in a mainly command system 
E)  command in a mainly market system 
A)  tradition in a mainly market system 
B)  command in a mainly tradition system 
C)  market in a mainly tradition system 
D)  tradition in a mainly command system 
E)  command in a mainly market system

Question 18

When individuals concentrate on a limited number of productive activities,this is known as

Accepted Answer

A)  shirking 
B)  productive inefficiency 
C)  exchange 
D)  specialization 
E)  an economic system 
A)  shirking 
B)  productive inefficiency 
C)  exchange 
D)  specialization 
E)  an economic system

Question 19

If the economy is producing a combination of goods inside its production possibilities frontier,then

Accepted Answer

A)  workers are on vacation 
B)  a significant number of workers have little education 
C)  some resources are being wasted 
D)  technology must improve before output can increase 
E)  the opportunity cost of producing more output is greater than the value of the additional output that could be produced 
A)  workers are on vacation 
B)  a significant number of workers have little education 
C)  some resources are being wasted 
D)  technology must improve before output can increase 
E)  the opportunity cost of producing more output is greater than the value of the additional output that could be produced

Question 20

The U.S.system of resource ownership

Accepted Answer

A)  is pure capitalism 
B)  excludes any state ownership of resources 
C)  includes government restrictions on the use of privately owned resources 
D)  is designed to eliminate the problem of scarce resources 
E)  excludes any communal ownership 
A)  is pure capitalism 
B)  excludes any state ownership of resources 
C)  includes government restrictions on the use of privately owned resources 
D)  is designed to eliminate the problem of scarce resources 
E)  excludes any communal ownership

If Chris can produce a service using fewer resources than Pat would,then Chris

A society is saving lives (productively)efficiently if

In deciding to produce more agricultural goods and fewer manufactured goods,a society is addressing the question of

Which of the following is an example of productive inefficiency?

The concave shape of the production possibilities frontier reflects

The production possibilities frontier is useful for demonstrating both scarcity and productive inefficiency.

If a society is operating on its production possibilities frontier,and then decides to produce less health care,

Figure 2-3 -Figure 2-3 shows the production possibilities frontier for a music processing plant that can produce both compact disks and cassettes.The opportunity cost of moving from point A to point E is

In a command system,the decision about what should be produced is made by

If an economy's production possibilities frontier shifted to the right,this would illustrate

Fiejura 2-11 Jails Fetched Jack Jill Per Hau Boards Sawed 20 4 Per Hau 10 8 -According to the information in Figure 2-11,Jill's opportunity cost of sawing a board is

Figure 2-2 -Assume that U.S.agricultural land is used either to raise cattle for beef or to grow wheat.Figure 2-2 represents the production possibility frontier for beef and wheat.Production at point H is

Sven has a comparative advantage over Alice in cooking but not in doing the laundry.Which of the following must be true?

An economy is said to be saving lives efficiently

The principle of specialization and exchange implies that

Tax collections in the United States are an example of

When individuals concentrate on a limited number of productive activities,this is known as

If the economy is producing a combination of goods inside its production possibilities frontier,then

The U.S.system of resource ownership

What is Economics?

Supply and Demand

Working With Supply and Demand

What Macroeconomics Tries to Explain

Production, Income, and Employment

The Price Level and Inflation

The Classical Long run Model

Economic Growth and Rising Living Standards

Economic Fluctuations

The Short-run Macro Model

Fiscal Policy

Money, Banks, and the Federal Reserve

The Money Market and Monetary Policy

Aggregate Demand and Aggregate Supply

Inflation and Monetary Policy

Exchange Rates and Macroeconomic Policy

Filters

Exam 2: Scarcity, Choice, and Economic Systems

If Chris can produce a service using fewer resources than Pat would,then Chris

A society is saving lives (productively)efficiently if

In deciding to produce more agricultural goods and fewer manufactured goods,a society is addressing the question of

Which of the following is an example of productive inefficiency?

The concave shape of the production possibilities frontier reflects

The production possibilities frontier is useful for demonstrating both scarcity and productive inefficiency.

If a society is operating on its production possibilities frontier,and then decides to produce less health care,

Figure 2-3 -Figure 2-3 shows the production possibilities frontier for a music processing plant that can produce both compact disks and cassettes.The opportunity cost of moving from point A to point E is

In a command system,the decision about what should be produced is made by

If an economy's production possibilities frontier shifted to the right,this would illustrate

Fiejura 2-11 Jails Fetched Jack Jill Per Hau Boards Sawed 20 4 Per Hau 10 8 -According to the information in Figure 2-11,Jill's opportunity cost of sawing a board is

Figure 2-2 -Assume that U.S.agricultural land is used either to raise cattle for beef or to grow wheat.Figure 2-2 represents the production possibility frontier for beef and wheat.Production at point H is

Sven has a comparative advantage over Alice in cooking but not in doing the laundry.Which of the following must be true?

An economy is said to be saving lives efficiently

The principle of specialization and exchange implies that

Tax collections in the United States are an example of

When individuals concentrate on a limited number of productive activities,this is known as

If the economy is producing a combination of goods inside its production possibilities frontier,then

The U.S.system of resource ownership

What is Economics?

Supply and Demand

Working With Supply and Demand

What Macroeconomics Tries to Explain

Production, Income, and Employment

The Price Level and Inflation

The Classical Long run Model

Economic Growth and Rising Living Standards

Economic Fluctuations

The Short-run Macro Model

Fiscal Policy

Money, Banks, and the Federal Reserve

The Money Market and Monetary Policy

Aggregate Demand and Aggregate Supply

Inflation and Monetary Policy

Exchange Rates and Macroeconomic Policy

Filters