Question 1

The argument for an increase in skilled and business migration is based on which of the following?

Accepted Answer

A) It would not only increase the labour supply, but unemployment as well. 
B) It will shift the PPF curve to the left due to the burden these people will place on our economy. 
C) It will shift the PPF curve to the right through increases in labour and technology. 
D) Although the PPF won't shift at all, it may change the mix of production from investment to consumption. 
A) It would not only increase the labour supply, but unemployment as well. 
B) It will shift the PPF curve to the left due to the burden these people will place on our economy. 
C) It will shift the PPF curve to the right through increases in labour and technology. 
D) Although the PPF won't shift at all, it may change the mix of production from investment to consumption. C

Question 2

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 labour 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 in the last period. 
A) an increase in Economagic's labour 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 in the last period. C

Question 3

A point outside a production possibilities curve reflects:

Accepted Answer

A) the law of increasing costs. 
B) future technological innovation. 
C) less than full use of resources and technology. 
D) economic efficiency. 
A) the law of increasing costs. 
B) future technological innovation. 
C) less than full use of resources and technology. 
D) economic efficiency. B

Question 4

Without the increase in immigration after the Second World War,Australia's population would now be around:

Accepted Answer

A) 5 million. 
B) 7 million. 
C) 10 million. 
D) 13 million. 
E) 21 million. 
A) 5 million. 
B) 7 million. 
C) 10 million. 
D) 13 million. 
E) 21 million.

Question 5

The process through which an economy's production possibilities curve shifts outward is:

Accepted Answer

A) full-employment management. 
B) investment. 
C) resource renewal. 
D) out-resourcing. 
A) full-employment management. 
B) investment. 
C) resource renewal. 
D) out-resourcing.

Question 6

The process of accumulating capital is called:

Accepted Answer

A) capitalisation. 
B) loanable funds. 
C) investment. 
D) debt management. 
A) capitalisation. 
B) loanable funds. 
C) investment. 
D) debt management.

Question 7

If a country has a comparative advantage in the production of all goods,it should:

Accepted Answer

A) specialise in the production of goods with the lowest opportunity cost. 
B) specialise in the production of goods with the highest opportunity cost. 
C) specialise in the production of goods with the absolute advantage. 
D) specialise in the production of goods without the absolute advantage. 
E) not specialise at all and produce all the goods itself. 
A) specialise in the production of goods with the lowest opportunity cost. 
B) specialise in the production of goods with the highest opportunity cost. 
C) specialise in the production of goods with the absolute advantage. 
D) specialise in the production of goods without the absolute advantage. 
E) not specialise at all and produce all the goods itself.

Question 8

Other things being equal,a decreased supply of natural resources would be represented on a production possibilities curve by a/an:

Accepted Answer

A) movement off the curve to a point inside the curve. 
B) movement down along the curve. 
C) movement up along the curve. 
D) inward shift of the entire curve. 
A) movement off the curve to a point inside the curve. 
B) movement down along the curve. 
C) movement up along the curve. 
D) inward shift of the entire curve.

Question 9

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

Accepted Answer

A) a decrease in Economania's capital stock. 
B) a decrease in Economania's labour supply. 
C) high unemployment in Economania for the previous time period. 
D) Economania producing all consumer goods in the previous period. 
E) improvement in the health and skill level of Economania's workforce. 
A) a decrease in Economania's capital stock. 
B) a decrease in Economania's labour supply. 
C) high unemployment in Economania for the previous time period. 
D) Economania producing all consumer goods in the previous period. 
E) improvement in the health and skill level of Economania's workforce.

Question 10

Exhibit 2-6 Production possibilities frontier data
  
-As shown in Exhibit 2-6,if the economy reallocates resources from capital goods to consumer goods:

Accepted Answer

A) it gains extra units of capital goods due to technological progress. 
B) it is an inefficient way of using the economy's scarce resources. 
C) it gains extra units of consumer goods but has to sacrifice units of capital goods. 
D) it gains extra units of consumer goods without sacrificing units of capital goods. 
A) it gains extra units of capital goods due to technological progress. 
B) it is an inefficient way of using the economy's scarce resources. 
C) it gains extra units of consumer goods but has to sacrifice units of capital goods. 
D) it gains extra units of consumer goods without sacrificing units of capital goods.

Question 11

According to the principle of comparative advantage,total output and consumption levels will be highest when goods are produced in nations according to which of the following conditions?

Accepted Answer

A) Opportunity costs are lowest. 
B) Absolute advantages are highest. 
C) Opportunity costs are equal. 
D) Absolute advantages are lowest. 
A) Opportunity costs are lowest. 
B) Absolute advantages are highest. 
C) Opportunity costs are equal. 
D) Absolute advantages are lowest.

Question 12

Exhibit 2-7 Production possibilities frontier
  
-Movement along the production possibilities curve shown in Exhibit 2-7 indicates:

Accepted Answer

A) The law of increasing opportunity costs. 
B) The law of declining opportunity costs. 
C) all inputs are homogeneous including labour. 
D) that not all resources are utilised. 
A) The law of increasing opportunity costs. 
B) The law of declining opportunity costs. 
C) all inputs are homogeneous including labour. 
D) that not all resources are utilised.

Question 13

Exhibit 2-10 Production possibilities frontier
  
-In Exhibit 2-10,which of the following points on the production possibilities curve are unattainable with the resources and technology currently available?

Accepted Answer

A) A, B, C, U. 
B) A, B, C, D, U. 
C) E and W. 
D) B, C, D, U. 
E)  A, B, C, D. 
A) A, B, C, U. 
B) A, B, C, D, U. 
C) E and W. 
D) B, C, D, U. 
E)  A, B, C, D.

Question 14

Exhibit 2-3 Production possibilities curve data
  
-According to the data given in Exhibit 2-3,the production of 140 units of consumer goods and 30 units of capital goods:

Accepted Answer

A) is possible but would be inefficient. 
B) may be a result of unemployment. 
C) may be a result of unused natural resources. 
D) is impossible. 
A) is possible but would be inefficient. 
B) may be a result of unemployment. 
C) may be a result of unused natural resources. 
D) is impossible.

Question 15

Increase in current consumption is necessary for economic growth.

Accepted Answer

A) True 
 B)False

Question 16

All points along the production possibilities frontier are:

Accepted Answer

A) unattainable combinations of two goods. 
B) minimum possible combinations of two goods. 
C) efficient maximum possible combinations of two goods. 
D) a combination of two goods given that not all available resources are used. 
A) unattainable combinations of two goods. 
B) minimum possible combinations of two goods. 
C) efficient maximum possible combinations of two goods. 
D) a combination of two goods given that not all available resources are used.

Question 17

A nation's current location on its production possibilities curve cannot determine the future location of that nation's production possibilities curve.

Accepted Answer

A) True 
 B)False

Question 18

Mikki decides to work five hours the night before her economics exam.She earns an extra $75,but her exam score is 10 points lower than it would have been had she stayed home and studied.Her opportunity cost of working more is the:

Accepted Answer

A) five hours she worked. 
B) $75 she earned. 
C) 10 points she lost on her exam. 
D) time she could have spent watching television. 
E) guilt she feels about neglecting her economics studies. 
A) five hours she worked. 
B) $75 she earned. 
C) 10 points she lost on her exam. 
D) time she could have spent watching television. 
E) guilt she feels about neglecting her economics studies.

Question 19

A point outside a production possibilities curve reflects:

Accepted Answer

A) efficiency. 
B) specialisation. 
C) inefficiency. 
D) unemployment. 
E) an impossible choice. 
A) efficiency. 
B) specialisation. 
C) inefficiency. 
D) unemployment. 
E) an impossible choice.

Question 20

When the opportunity cost of producing laptops increases as more laptops are produced,then:

Accepted Answer

A) no more laptops will be produced. 
B) resources are equally suited to the production of laptops and to other goods. 
C) the production possibilities frontier is a straight line. 
D) the production possibilities frontier becomes positively sloped. 
E) the law of increasing costs is present. 
A) no more laptops will be produced. 
B) resources are equally suited to the production of laptops and to other goods. 
C) the production possibilities frontier is a straight line. 
D) the production possibilities frontier becomes positively sloped. 
E) the law of increasing costs is present.

The argument for an increase in skilled and business migration is based on which of the following?

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

A point outside a production possibilities curve reflects:

Without the increase in immigration after the Second World War,Australia's population would now be around:

The process through which an economy's production possibilities curve shifts outward is:

The process of accumulating capital is called:

If a country has a comparative advantage in the production of all goods,it should:

Other things being equal,a decreased supply of natural resources would be represented on a production possibilities curve by a/an:

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

Exhibit 2-6 Production possibilities frontier data -As shown in Exhibit 2-6,if the economy reallocates resources from capital goods to consumer goods:

According to the principle of comparative advantage,total output and consumption levels will be highest when goods are produced in nations according to which of the following conditions?

Exhibit 2-7 Production possibilities frontier -Movement along the production possibilities curve shown in Exhibit 2-7 indicates:

Exhibit 2-10 Production possibilities frontier -In Exhibit 2-10,which of the following points on the production possibilities curve are unattainable with the resources and technology currently available?

Exhibit 2-3 Production possibilities curve data -According to the data given in Exhibit 2-3,the production of 140 units of consumer goods and 30 units of capital goods:

Increase in current consumption is necessary for economic growth.

All points along the production possibilities frontier are:

A nation's current location on its production possibilities curve cannot determine the future location of that nation's production possibilities curve.

Mikki decides to work five hours the night before her economics exam.She earns an extra $75,but her exam score is 10 points lower than it would have been had she stayed home and studied.Her opportunity cost of working more is the:

A point outside a production possibilities curve reflects:

When the opportunity cost of producing laptops increases as more laptops are produced,then:

Thinking like an economist

Market demand and supply

Markets in action

Elasticity of demand and supply

Production costs

Perfect competition

Monopoly

Monopolistic competition and oligopoly

Policy issues: resource taxes and climate change

Measuring the size of the economy

Business cycles and economic growth

Inflation and unemployment

A simple model of the macro economy

The monetary and financial system

Macroeconomic policy I: monetary policy

Macroeconomic policy II: fiscal policy

International trade and finance

Applying graphs to economics

Filters

Exam 2: Production possibilities and opportunity cost

The argument for an increase in skilled and business migration is based on which of the following?

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

A point outside a production possibilities curve reflects:

Without the increase in immigration after the Second World War,Australia's population would now be around:

The process through which an economy's production possibilities curve shifts outward is:

The process of accumulating capital is called:

If a country has a comparative advantage in the production of all goods,it should:

Other things being equal,a decreased supply of natural resources would be represented on a production possibilities curve by a/an:

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

Exhibit 2-6 Production possibilities frontier data -As shown in Exhibit 2-6,if the economy reallocates resources from capital goods to consumer goods:

According to the principle of comparative advantage,total output and consumption levels will be highest when goods are produced in nations according to which of the following conditions?

Exhibit 2-7 Production possibilities frontier -Movement along the production possibilities curve shown in Exhibit 2-7 indicates:

Exhibit 2-10 Production possibilities frontier -In Exhibit 2-10,which of the following points on the production possibilities curve are unattainable with the resources and technology currently available?

Exhibit 2-3 Production possibilities curve data -According to the data given in Exhibit 2-3,the production of 140 units of consumer goods and 30 units of capital goods:

Increase in current consumption is necessary for economic growth.

All points along the production possibilities frontier are:

A nation's current location on its production possibilities curve cannot determine the future location of that nation's production possibilities curve.

Mikki decides to work five hours the night before her economics exam.She earns an extra $75,but her exam score is 10 points lower than it would have been had she stayed home and studied.Her opportunity cost of working more is the:

A point outside a production possibilities curve reflects:

When the opportunity cost of producing laptops increases as more laptops are produced,then:

Thinking like an economist

Market demand and supply

Markets in action

Elasticity of demand and supply

Production costs

Perfect competition

Monopoly

Monopolistic competition and oligopoly

Policy issues: resource taxes and climate change

Measuring the size of the economy

Business cycles and economic growth

Inflation and unemployment

A simple model of the macro economy

The monetary and financial system

Macroeconomic policy I: monetary policy

Macroeconomic policy II: fiscal policy

International trade and finance

Applying graphs to economics

Filters