Question 1

A university should not disband its football team since it has already paid for the stadium.

Accepted Answer

A) True 
 B)False

Question 2

Exhibit 2.5
​

-Refer to Exhibit 2.5, which shows the production possibilities frontier for capital goods and consumer goods. Suppose an influx of immigrants benefits the production of both consumer goods and capital goods. In this case, which of the graphs best illustrates the impact on the production possibilities frontier?

Accepted Answer

A)  a 
B)  b 
C)  c 
D)  d 
E)  b and d 
A)  a 
B)  b 
C)  c 
D)  d 
E)  b and d

Question 3

If Jason can wash a car in 20 minutes and wash a dog in 10 minutes and Megan can wash a car in 15 minutes and wash a dog in 15 minutes, which of the following statements is true?

Accepted Answer

A)  The opportunity cost of washing a car is greater for Megan. 
B)  The opportunity cost of washing a car is one dog bath for Jason. 
C)  Megan can wash two cars in the time it takes Jason to wash a dog. 
D)  Jason has both a comparative and an absolute advantage in washing a dog. 
E)  The opportunity cost of washing a dog is lower for Megan. 
A)  The opportunity cost of washing a car is greater for Megan. 
B)  The opportunity cost of washing a car is one dog bath for Jason. 
C)  Megan can wash two cars in the time it takes Jason to wash a dog. 
D)  Jason has both a comparative and an absolute advantage in washing a dog. 
E)  The opportunity cost of washing a dog is lower for Megan.

Question 4

Hans can do 4 loads of laundry or type 6 pages in an hour. Heidi can do 12 loads of laundry or type 8 pages in an hour. Which of the following is correct?

Accepted Answer

A)  Heidi has both an absolute and a comparative advantage in typing. 
B)  Heidi has both an absolute and a comparative advantage in doing laundry. 
C)  Heidi has a comparative advantage in both typing and doing laundry. 
D)  Hans has both an absolute and a comparative advantage in typing. 
E)  Hans has an absolute advantage in doing laundry. 
A)  Heidi has both an absolute and a comparative advantage in typing. 
B)  Heidi has both an absolute and a comparative advantage in doing laundry. 
C)  Heidi has a comparative advantage in both typing and doing laundry. 
D)  Hans has both an absolute and a comparative advantage in typing. 
E)  Hans has an absolute advantage in doing laundry.

Question 5

It is possible for one person to have an absolute advantage in two tasks and a comparative advantage in only one.

Accepted Answer

A) True 
 B)False

Question 6

The division of labor increases productivity because _____

Accepted Answer

A)  tasks can be assigned according to individual abilities and skills. 
B)  workers who repeatedly perform the same tasks become bored. 
C)  each worker must learn each of the numerous tasks in the total production process. 
D)  the specialization of labor allows for the introduction of cheaper, less sophisticated production techniques. 
E)  managers can force workers to produce goods that are valued higher than the costs of producing them. 
A)  tasks can be assigned according to individual abilities and skills. 
B)  workers who repeatedly perform the same tasks become bored. 
C)  each worker must learn each of the numerous tasks in the total production process. 
D)  the specialization of labor allows for the introduction of cheaper, less sophisticated production techniques. 
E)  managers can force workers to produce goods that are valued higher than the costs of producing them.

Question 7

Hans can do 4 loads of laundry and type 6 pages per hour. Heidi can do 12 loads of laundry and type 8 pages per hour. Hans and Heidi would both be better off if _____

Accepted Answer

A)  Hans specialized in typing and Heidi in doing laundry, trading with each other for the other service. 
B)  Hans specialized in doing laundry and Heidi in typing, trading with each other for the other service. 
C)  each did their own laundry and typing. 
D)  Heidi did all of the typing and all of the laundry. 
E)  Hans did all of the typing and all of the laundry. 
A)  Hans specialized in typing and Heidi in doing laundry, trading with each other for the other service. 
B)  Hans specialized in doing laundry and Heidi in typing, trading with each other for the other service. 
C)  each did their own laundry and typing. 
D)  Heidi did all of the typing and all of the laundry. 
E)  Hans did all of the typing and all of the laundry.

Question 8

Table 2.3
 $$\begin{array}{l}
\text { Table } 2.3\
\begin{array} { | l | l | l | l | l | l | } 
\hline & \text { A } & \text { B } & \text { C } & \text { D } & \text { E } \
\hline \text { Capital goods } & 0 & 1 & 2 & 3 & 4 \
\hline \begin{array} { l } 
\text { Consumer } \
\text { goods }
\end{array} & 40 & 35 & 20 & 7 & 0 \
\hline
\end{array}
\end{array}$$
-Refer to Table 2.3, which shows the production possibilities frontier between the production of capital goods and consumer goods in an economy. What is the opportunity cost of producing 1 unit of capital goods at point B?

Accepted Answer

A)  35 units of capital goods 
B)  15 units of consumer goods 
C)  13 units of consumer goods 
D)  7 units of consumer goods 
E)  5 units of consumer goods 
A)  35 units of capital goods 
B)  15 units of consumer goods 
C)  13 units of consumer goods 
D)  7 units of consumer goods 
E)  5 units of consumer goods

Question 9

The production possibilities frontier represents all desirable combinations of outputs.

Accepted Answer

A) True 
 B)False

Question 10

A rational decision maker engages in an activity if that activity is more attractive than the best alternative.

Accepted Answer

A) True 
 B)False

Question 11

Exhibit 2.1
​
  
-Refer to Exhibit 2.1, which shows the production for rice and T-shirts for two countries: Costa Rica and the United States. If Costa Rica produces exactly half of its total production in each good, what will it produce?

Accepted Answer

A)  100 T-shirts and 100 tons of rice 
B)  200 T-shirts and 200 tons of rice 
C)  250 T-shirts and 250 tons of rice 
D)  300 T-shirts and 300 tons of rice 
E)  400 T-shirts and 400 tons of rice 
A)  100 T-shirts and 100 tons of rice 
B)  200 T-shirts and 200 tons of rice 
C)  250 T-shirts and 250 tons of rice 
D)  300 T-shirts and 300 tons of rice 
E)  400 T-shirts and 400 tons of rice

Question 12

The primary differences in economic structure among different countries relate to the ownership of resources and the manner in which economic activities are coordinated.

Accepted Answer

A) True 
 B)False

Question 13

Pure capitalism and a pure command system are _____

Accepted Answer

A)  two different ways of answering the basic economic questions. 
B)  two terms describing the same method of answering the basic economic questions. 
C)  the only two ways of answering the basic economic questions. 
D)  the most efficient ways of answering the basic economic questions. 
E)  two economic systems where the problem of scarcity does not exist. 
A)  two different ways of answering the basic economic questions. 
B)  two terms describing the same method of answering the basic economic questions. 
C)  the only two ways of answering the basic economic questions. 
D)  the most efficient ways of answering the basic economic questions. 
E)  two economic systems where the problem of scarcity does not exist.

Question 14

A test is scheduled for Monday morning, and you went to a party on Sunday night. If you hadn't attended the party, you could have studied for the test or gone to a movie. Which of the following is true of your opportunity cost?

Accepted Answer

A)  The opportunity cost of going to the movie is zero. 
B)  The opportunity cost of going to the party is the difference between the costs of the movie and the party. 
C)  The opportunity cost of going to the party is the total amount spent on transport to go to the party. 
D)  The opportunity cost of going to the party is the cost of the movie ticket. 
E)  From the above information, it's not possible to determine the opportunity cost of attending the party. 
A)  The opportunity cost of going to the movie is zero. 
B)  The opportunity cost of going to the party is the difference between the costs of the movie and the party. 
C)  The opportunity cost of going to the party is the total amount spent on transport to go to the party. 
D)  The opportunity cost of going to the party is the cost of the movie ticket. 
E)  From the above information, it's not possible to determine the opportunity cost of attending the party.

Question 15

Which of the following is a characteristic of a pure command economy?

Accepted Answer

A)  All resources are privately owned. 
B)  Economic activity is coordinated by the price system. 
C)  Competitive markets guide resources to their highest-valued uses. 
D)  Centralized economic planning is used to answer the basic economic questions. 
E)  Economic choices are voluntary and are based on rational self-interest. 
A)  All resources are privately owned. 
B)  Economic activity is coordinated by the price system. 
C)  Competitive markets guide resources to their highest-valued uses. 
D)  Centralized economic planning is used to answer the basic economic questions. 
E)  Economic choices are voluntary and are based on rational self-interest.

Question 16

In economics, the total cost of an item is measured as _____

Accepted Answer

A)  the dollar cost of the item. 
B)  the time spent obtaining the item. 
C)  what you gave up to get the item. 
D)  the implicit cost of the item. 
E)  the explicit cost of the item. 
A)  the dollar cost of the item. 
B)  the time spent obtaining the item. 
C)  what you gave up to get the item. 
D)  the implicit cost of the item. 
E)  the explicit cost of the item.

Question 17

A point inside the production possibilities frontier illustrates a situation in which resources are not fully employed.

Accepted Answer

A) True 
 B)False

Question 18

Hans can do 4 loads of laundry and type 6 pages per hour. Heidi can do 12 loads of laundry and type 8 pages per hour. Heidi's opportunity cost of typing one page is _____

Accepted Answer

A)  equal to 4 loads of laundry. 
B)  equal to 6 loads of laundry. 
C)  equal to 3/2 of a load of laundry. 
D)  equal to 2/3 of a load of laundry. 
E)  impossible to compute without additional information. 
A)  equal to 4 loads of laundry. 
B)  equal to 6 loads of laundry. 
C)  equal to 3/2 of a load of laundry. 
D)  equal to 2/3 of a load of laundry. 
E)  impossible to compute without additional information.

Question 19

The law of comparative advantage states that the person who _____ should produce the good.

Accepted Answer

A)  has the lowest opportunity cost of producing a good 
B)  can produce a good using the fewest resources 
C)  can produce a good using the most expensive resources 
D)  has the most desire for a good 
E)  has produced a particular good in the past 
A)  has the lowest opportunity cost of producing a good 
B)  can produce a good using the fewest resources 
C)  can produce a good using the most expensive resources 
D)  has the most desire for a good 
E)  has produced a particular good in the past

Question 20

Which system is characterized by the private ownership of resources and the use of prices to coordinate economic activity in unregulated markets?

Accepted Answer

A)  a pure command system 
B)  a transitional system 
C)  a traditional system 
D)  a pure capitalist system 
E)  a mixed system 
A)  a pure command system 
B)  a transitional system 
C)  a traditional system 
D)  a pure capitalist system 
E)  a mixed system

A university should not disband its football team since it has already paid for the stadium.

If Jason can wash a car in 20 minutes and wash a dog in 10 minutes and Megan can wash a car in 15 minutes and wash a dog in 15 minutes, which of the following statements is true?

Hans can do 4 loads of laundry or type 6 pages in an hour. Heidi can do 12 loads of laundry or type 8 pages in an hour. Which of the following is correct?

It is possible for one person to have an absolute advantage in two tasks and a comparative advantage in only one.

The division of labor increases productivity because _____

Hans can do 4 loads of laundry and type 6 pages per hour. Heidi can do 12 loads of laundry and type 8 pages per hour. Hans and Heidi would both be better off if _____

The production possibilities frontier represents all desirable combinations of outputs.

A rational decision maker engages in an activity if that activity is more attractive than the best alternative.

Exhibit 2.1 -Refer to Exhibit 2.1, which shows the production for rice and T-shirts for two countries: Costa Rica and the United States. If Costa Rica produces exactly half of its total production in each good, what will it produce?

The primary differences in economic structure among different countries relate to the ownership of resources and the manner in which economic activities are coordinated.

Pure capitalism and a pure command system are _____

A test is scheduled for Monday morning, and you went to a party on Sunday night. If you hadn't attended the party, you could have studied for the test or gone to a movie. Which of the following is true of your opportunity cost?

Which of the following is a characteristic of a pure command economy?

In economics, the total cost of an item is measured as _____

A point inside the production possibilities frontier illustrates a situation in which resources are not fully employed.

Hans can do 4 loads of laundry and type 6 pages per hour. Heidi can do 12 loads of laundry and type 8 pages per hour. Heidi's opportunity cost of typing one page is _____

The law of comparative advantage states that the person who _____ should produce the good.

Which system is characterized by the private ownership of resources and the use of prices to coordinate economic activity in unregulated markets?

The Art and Science of Economic Analysis.

Economic Decision Makers.

Demand, Supply, and Markets.

Introduction to Macroeconomics.

Tracking the U. S. Economy.

Unemployment and Inflation.

Productivity and Growth.

Aggregate Demand.

Aggregate Supply.

Fiscal Policy.

Federal Budgets and Public Policy.

Money and the Financial System.

Banking and the Money Supply.

Monetary Theory and Policy.

Macro Policy Debate: Active or Passive?

International Trade.

International Finance.

Economic Development.

Filters

Exam 2: Economic Tools and Economic Systems.

A university should not disband its football team since it has already paid for the stadium.

If Jason can wash a car in 20 minutes and wash a dog in 10 minutes and Megan can wash a car in 15 minutes and wash a dog in 15 minutes, which of the following statements is true?

Hans can do 4 loads of laundry or type 6 pages in an hour. Heidi can do 12 loads of laundry or type 8 pages in an hour. Which of the following is correct?

It is possible for one person to have an absolute advantage in two tasks and a comparative advantage in only one.

The division of labor increases productivity because _____

Hans can do 4 loads of laundry and type 6 pages per hour. Heidi can do 12 loads of laundry and type 8 pages per hour. Hans and Heidi would both be better off if _____

The production possibilities frontier represents all desirable combinations of outputs.

A rational decision maker engages in an activity if that activity is more attractive than the best alternative.

Exhibit 2.1 ​ -Refer to Exhibit 2.1, which shows the production for rice and T-shirts for two countries: Costa Rica and the United States. If Costa Rica produces exactly half of its total production in each good, what will it produce?

The primary differences in economic structure among different countries relate to the ownership of resources and the manner in which economic activities are coordinated.

Pure capitalism and a pure command system are _____

A test is scheduled for Monday morning, and you went to a party on Sunday night. If you hadn't attended the party, you could have studied for the test or gone to a movie. Which of the following is true of your opportunity cost?

Which of the following is a characteristic of a pure command economy?

In economics, the total cost of an item is measured as _____

A point inside the production possibilities frontier illustrates a situation in which resources are not fully employed.

Hans can do 4 loads of laundry and type 6 pages per hour. Heidi can do 12 loads of laundry and type 8 pages per hour. Heidi's opportunity cost of typing one page is _____

The law of comparative advantage states that the person who _____ should produce the good.

Which system is characterized by the private ownership of resources and the use of prices to coordinate economic activity in unregulated markets?

The Art and Science of Economic Analysis.

Economic Decision Makers.

Demand, Supply, and Markets.

Introduction to Macroeconomics.

Tracking the U. S. Economy.

Unemployment and Inflation.

Productivity and Growth.

Aggregate Demand.

Aggregate Supply.

Fiscal Policy.

Federal Budgets and Public Policy.

Money and the Financial System.

Banking and the Money Supply.

Monetary Theory and Policy.

Macro Policy Debate: Active or Passive?

International Trade.

International Finance.

Economic Development.

Filters

Exhibit 2.1 -Refer to Exhibit 2.1, which shows the production for rice and T-shirts for two countries: Costa Rica and the United States. If Costa Rica produces exactly half of its total production in each good, what will it produce?