Question 1

The term scarcity in economics refers to a situation when:

Accepted Answer

A)  some people have more than they need. 
B)  the supply of something doesn't satisfy everyone's desires for it. 
C)  all wants and needs are satisfied. 
D)  everyone desires less than the amount of something available. 
A)  some people have more than they need. 
B)  the supply of something doesn't satisfy everyone's desires for it. 
C)  all wants and needs are satisfied. 
D)  everyone desires less than the amount of something available.

Question 2

What does the phrase ceteris paribus mean?

Accepted Answer

A)  The teacher has said it. 
B)  out of many, one 
C)  Let the buyer beware. 
D)  other things being equal 
A)  The teacher has said it. 
B)  out of many, one 
C)  Let the buyer beware. 
D)  other things being equal

Question 3

When an economist invokes the ceteris paribus statement, what is she doing?

Accepted Answer

A)  indicating that a mathematical statement is completed 
B)  assuming that an event is about to happen 
C)  assuming that all other factors affecting an event are not changing 
D)  indicating that the outcome of an event is uncertain 
A)  indicating that a mathematical statement is completed 
B)  assuming that an event is about to happen 
C)  assuming that all other factors affecting an event are not changing 
D)  indicating that the outcome of an event is uncertain

Question 4

Producing more of one good does NOT draw resources away from the production of other goods if an economy:

Accepted Answer

A)  is operating on its production possibilities frontier. 
B)  has idle resources. 
C)  operates using a barter system. 
D)  is producing more than what is sustainable. 
A)  is operating on its production possibilities frontier. 
B)  has idle resources. 
C)  operates using a barter system. 
D)  is producing more than what is sustainable.

Question 5

Theo has only 10 minutes to eat breakfast each morning. What is the term for the condition that Theo faces?

Accepted Answer

A)  ceteris paribus 
B)  normative economics 
C)  scarcity 
D)  incentives 
A)  ceteris paribus 
B)  normative economics 
C)  scarcity 
D)  incentives

Question 6

The three fundamental questions are NOT concerned with:

Accepted Answer

A)  who gets what is produced. 
B)  what goods should be produced. 
C)  how well the goods are made. 
D)  how resources are used to produce goods. 
A)  who gets what is produced. 
B)  what goods should be produced. 
C)  how well the goods are made. 
D)  how resources are used to produce goods.

Question 7

Which of the following is an example of normative economics?

Accepted Answer

A)  The city of Portland has one of the highest rates of homelessness in the nation. 
B)  The inflation rate is too high, and the central bank must take measures to lower it. 
C)  The consumer price index is higher this year than it was last year. 
D)  A higher gasoline tax will likely reduce gasoline consumption and improve air quality in our cities. 
A)  The city of Portland has one of the highest rates of homelessness in the nation. 
B)  The inflation rate is too high, and the central bank must take measures to lower it. 
C)  The consumer price index is higher this year than it was last year. 
D)  A higher gasoline tax will likely reduce gasoline consumption and improve air quality in our cities.

Question 8

What model is used by economists to illustrate efficient combinations of the production of two goods within an economy?

Accepted Answer

A)  the production possibilities frontier (PPF) 
B)  maps 
C)  the market model 
D)  cost curves 
A)  the production possibilities frontier (PPF) 
B)  maps 
C)  the market model 
D)  cost curves

Question 9

Use the figure The Production Possibilities Frontier III. Economic growth occurs if there is a change in output from point:
​
Figure: The Production Possibilities Frontier III

Accepted Answer

A)  J to point I. 
B)  J to point H. 
C)  I to point K. 
D)  I to point L. 
A)  J to point I. 
B)  J to point H. 
C)  I to point K. 
D)  I to point L.

Question 10

Use the figure The Production Possibilities Frontier III. What point represents a combination of output that is produced if some resources are idle?
​
Figure: The Production Possibilities Frontier III

Accepted Answer

A)  G 
B)  J 
C)  I 
D)  K 
A)  G 
B)  J 
C)  I 
D)  K

Question 11

Use the figure A Production Possibilities Frontier IV.
​
Figure: A Production Possibilities Frontier IV
   A. What point represents an inefficient use of economic resources?
B. What point represents a combination of goods that is unattainable in this economy?
C. What is the opportunity cost of moving from point A to point B?
D. What Is the opportunity cost of moving from point C to point D?
E. What is the opportunity cost of moving from point E to point C?

Accepted Answer

In part A, point E represents an ineffic

Question 12

What word is used in economics to describe land, workers, and equipment?

Accepted Answer

A)  production 
B)  costs 
C)  resources 
D)  capital 
A)  production 
B)  costs 
C)  resources 
D)  capital

Question 13

Economic growth has occurred if:

Accepted Answer

A)  the maximum amount of production in an economy has increased. 
B)  idle resources have been put to use. 
C)  the amount of resources and technology available has decreased. 
D)  opportunity costs have have decreased. 
A)  the maximum amount of production in an economy has increased. 
B)  idle resources have been put to use. 
C)  the amount of resources and technology available has decreased. 
D)  opportunity costs have have decreased.

Question 14

If opportunity costs are constant, what is the shape of the production possibilities frontier (PPF)?

Accepted Answer

A)  a bowed-in line connecting the axes 
B)  a bowed-out line connecting the axes 
C)  a straight line connecting the axes 
D)  a vertical line on the horizontal axis 
A)  a bowed-in line connecting the axes 
B)  a bowed-out line connecting the axes 
C)  a straight line connecting the axes 
D)  a vertical line on the horizontal axis

Question 15

Economics is best described as the study of:

Accepted Answer

A)  decision making under conditions of scarcity. 
B)  the stock market. 
C)  holding all else equal. 
D)  judgments about the way things should be. 
A)  decision making under conditions of scarcity. 
B)  the stock market. 
C)  holding all else equal. 
D)  judgments about the way things should be.

Question 16

Which of the following is an example of normative economics?

Accepted Answer

A)  The city of Portland has one of the highest rates of homelessness in the nation. 
B)  The trade deficit hit an all-time high last month. 
C)  Unemployment benefits in France are too generous and create a drain on government budgets. 
D)  A higher subsidy for public transportation will likely reduce traffic congestion and improve air quality in our cities. 
A)  The city of Portland has one of the highest rates of homelessness in the nation. 
B)  The trade deficit hit an all-time high last month. 
C)  Unemployment benefits in France are too generous and create a drain on government budgets. 
D)  A higher subsidy for public transportation will likely reduce traffic congestion and improve air quality in our cities.

Question 17

Specialization of resources results in a production possibilities frontier that is a:

Accepted Answer

A)  bowed-in line connecting the axes. 
B)  bowed-out line connecting the axes. 
C)  straight line connecting the axes. 
D)  vertical line on the horizontal axis. 
A)  bowed-in line connecting the axes. 
B)  bowed-out line connecting the axes. 
C)  straight line connecting the axes. 
D)  vertical line on the horizontal axis.

Question 18

Use the table Possible Output Combinations Using All Available Resources I. What is the shape of the production possibilities frontier (PPF) for these combinations of output?
​

Accepted Answer

A)  convex 
B)  concave 
C)  linear 
D)  vertical 
A)  convex 
B)  concave 
C)  linear 
D)  vertical

Question 19

The condition that exists when the supply of something doesn't satisfy everyone's desire for it is known as:

Accepted Answer

A)  scarcity. 
B)  economics. 
C)  efficiency. 
D)  ceteris paribus. 
A)  scarcity. 
B)  economics. 
C)  efficiency. 
D)  ceteris paribus.

Question 20

What is an economy?

Accepted Answer

A)  a banking system 
B)  a system of coordinating the production and distribution of goods and services 
C)  the movement of goods and services between countries 
D)  the coordination of a buyer of a good and a seller of a good 
A)  a banking system 
B)  a system of coordinating the production and distribution of goods and services 
C)  the movement of goods and services between countries 
D)  the coordination of a buyer of a good and a seller of a good

The term scarcity in economics refers to a situation when:

What does the phrase ceteris paribus mean?

When an economist invokes the ceteris paribus statement, what is she doing?

Producing more of one good does NOT draw resources away from the production of other goods if an economy:

Theo has only 10 minutes to eat breakfast each morning. What is the term for the condition that Theo faces?

The three fundamental questions are NOT concerned with:

Which of the following is an example of normative economics?

What model is used by economists to illustrate efficient combinations of the production of two goods within an economy?

Use the figure The Production Possibilities Frontier III. Economic growth occurs if there is a change in output from point: Figure: The Production Possibilities Frontier III

Use the figure The Production Possibilities Frontier III. What point represents a combination of output that is produced if some resources are idle? Figure: The Production Possibilities Frontier III

What word is used in economics to describe land, workers, and equipment?

Economic growth has occurred if:

If opportunity costs are constant, what is the shape of the production possibilities frontier (PPF)?

Economics is best described as the study of:

Which of the following is an example of normative economics?

Specialization of resources results in a production possibilities frontier that is a:

Use the table Possible Output Combinations Using All Available Resources I. What is the shape of the production possibilities frontier (PPF) for these combinations of output?

The condition that exists when the supply of something doesn't satisfy everyone's desire for it is known as:

What is an economy?

Extension: Understanding Graphs

Markets and Economies

Demand

Supply

Market Equilibrium

Elasticity

Consumer Behavior

Production Costs

Perfect Competition

Market Power

Factor Markets

Market Failure and Government Failure

Measuring an Economys Performance

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money and Banking

Monetary Policy

Economic Growth and Development

International Trade and Finance

Filters

Exam 1: Foundations of Economics

The term scarcity in economics refers to a situation when:

What does the phrase ceteris paribus mean?

When an economist invokes the ceteris paribus statement, what is she doing?

Producing more of one good does NOT draw resources away from the production of other goods if an economy:

Theo has only 10 minutes to eat breakfast each morning. What is the term for the condition that Theo faces?

The three fundamental questions are NOT concerned with:

Which of the following is an example of normative economics?

What model is used by economists to illustrate efficient combinations of the production of two goods within an economy?

Use the figure The Production Possibilities Frontier III. Economic growth occurs if there is a change in output from point: ​ Figure: The Production Possibilities Frontier III

Use the figure The Production Possibilities Frontier III. What point represents a combination of output that is produced if some resources are idle? ​ Figure: The Production Possibilities Frontier III

What word is used in economics to describe land, workers, and equipment?

Economic growth has occurred if:

If opportunity costs are constant, what is the shape of the production possibilities frontier (PPF)?

Economics is best described as the study of:

Which of the following is an example of normative economics?

Specialization of resources results in a production possibilities frontier that is a:

Use the table Possible Output Combinations Using All Available Resources I. What is the shape of the production possibilities frontier (PPF) for these combinations of output? ​

The condition that exists when the supply of something doesn't satisfy everyone's desire for it is known as:

What is an economy?

Extension: Understanding Graphs

Markets and Economies

Demand

Supply

Market Equilibrium

Elasticity

Consumer Behavior

Production Costs

Perfect Competition

Market Power

Factor Markets

Market Failure and Government Failure

Measuring an Economys Performance

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money and Banking

Monetary Policy

Economic Growth and Development

International Trade and Finance

Filters

Use the figure The Production Possibilities Frontier III. Economic growth occurs if there is a change in output from point: Figure: The Production Possibilities Frontier III

Use the figure The Production Possibilities Frontier III. What point represents a combination of output that is produced if some resources are idle? Figure: The Production Possibilities Frontier III

Use the table Possible Output Combinations Using All Available Resources I. What is the shape of the production possibilities frontier (PPF) for these combinations of output?