Question 1

Which of the following would not result in an outward shift of a nation's production possibilities curve?

Accepted Answer

A)  a reduction in the unemployment rate 
B)  a rise in labor productivity 
C)  advances in technology 
D)  an expanding resource base 
A)  a reduction in the unemployment rate 
B)  a rise in labor productivity 
C)  advances in technology 
D)  an expanding resource base

Question 2

An entrepreneur is a person who organizes, manages, and assembles the other factors of production to produce goods and services.

Accepted Answer

A) True 
 B)False

Question 3

A rational person will refrain from taking action if the marginal benefits exceed the marginal costs.

Accepted Answer

A) True 
 B)False

Question 4

The downward-sloping nature of production possibilities curves reflects which basic truth of economics?

Accepted Answer

A)  Money can buy anything people want. 
B)  A lower price means people will buy more. 
C)  When people make choices, they have opportunity costs. 
D)  People are happiest when they have fewest goods. 
A)  Money can buy anything people want. 
B)  A lower price means people will buy more. 
C)  When people make choices, they have opportunity costs. 
D)  People are happiest when they have fewest goods.

Question 5

Economists recognize all of the following as factors of production except

Accepted Answer

A)  entrepreneurship 
B)  capital 
C)  money 
D)  land 
A)  entrepreneurship 
B)  capital 
C)  money 
D)  land

Question 6

"The unemployment rate should be kept lower than 5 percent" is a normative economics statement.

Accepted Answer

A) True 
 B)False

Question 7

If the U.S. reduced its unemployment rate by 2%, this would shift the U.S. production possibilities curve outward.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is not a decision that every society, regardless of its wealth and power, must make regarding the production and distribution of goods and services?

Accepted Answer

A)  How shall incomes be spent to make consumers as happy as possible? 
B)  What goods shall be produced and in what quantities? 
C)  How shall goods be produced? 
D)  For whom shall the goods be produced? 
A)  How shall incomes be spent to make consumers as happy as possible? 
B)  What goods shall be produced and in what quantities? 
C)  How shall goods be produced? 
D)  For whom shall the goods be produced?

Question 9

The terrorist attacks of September 11, 2001 led the U.S. to devote more of its resources to national security, creating an opportunity cost for society in terms of the other goods that were given up.

Accepted Answer

A) True 
 B)False

Question 10

Economics is first and foremost the study of how to make a lot of money for housholds and businesses.

Accepted Answer

A) True 
 B)False

Question 11

A study of the effects of a decrease in income taxes on U.S. consumption spending would essentially be a microeconomics issue.

Accepted Answer

A) True 
 B)False

Question 12

An economy's production possibilities curve assumes a high unemployment rate, fixed resources, and unchanged technology.

Accepted Answer

A) True 
 B)False

Question 13

Because of scarcity of factors of production,

Accepted Answer

A)  only goods in relative abundance are free 
B)  all goods tend to be expensive 
C)  an economy cannot operate at maximum capacity 
D)  economic decisions usually entail opportunity costs 
A)  only goods in relative abundance are free 
B)  all goods tend to be expensive 
C)  an economy cannot operate at maximum capacity 
D)  economic decisions usually entail opportunity costs

Question 14

Which is a question of normative economics?

Accepted Answer

A)  Why do janitors earn less than engineers? 
B)  Does inflation impose hardships on people with fixed incomes? 
C)  What causes growth for the economy? 
D)  Should welfare payments be increased? 
A)  Why do janitors earn less than engineers? 
B)  Does inflation impose hardships on people with fixed incomes? 
C)  What causes growth for the economy? 
D)  Should welfare payments be increased?

Question 15

Economic growth would occur for all of the following reasons except

Accepted Answer

A)  increasing resource base 
B)  increasing money income 
C)  technological advance 
D)  increasing productivity of labor 
A)  increasing resource base 
B)  increasing money income 
C)  technological advance 
D)  increasing productivity of labor

Question 16

Normative economics involve facts while while positive economics involves value judgments.

Accepted Answer

A) True 
 B)False

Question 17

Table 1.1. U.S. Production Possibilities Curve Data
 $$\begin{array} { l r r r r r r } 
& \text { A } & \text { B } & \text { C } & \text { D } & \text { E } & \text { F } \
\text { Capital goods } & 5 & 4 & 3 & 2 & 1 & 0 \
\text { Consumer goods } & 0 & 12 & 22 & 30 & 36 & 40
\end{array}$$
-Refer to Table 1.1. The data in the table show that the U.S. economy produces under conditions of

Accepted Answer

A)  constant opportunity cost 
B)  increasing opportunity cost 
C)  decreasing opportunity cost 
D)  zero opportunity cost 
A)  constant opportunity cost 
B)  increasing opportunity cost 
C)  decreasing opportunity cost 
D)  zero opportunity cost

Question 18

Macroeconomics addresses all of the following questions except

Accepted Answer

A)  What causes unemployment in the U.S. economy? 
B)  Should the U.S. government adopt policies to reduce consumption? 
C)  How does a decline in interest rates affect the U.S. economy? 
D)  Should I put my savings in a bank account or invest them in the stock market? 
A)  What causes unemployment in the U.S. economy? 
B)  Should the U.S. government adopt policies to reduce consumption? 
C)  How does a decline in interest rates affect the U.S. economy? 
D)  Should I put my savings in a bank account or invest them in the stock market?

Question 19

When the U.S. and its allies imposed economic sanctions against Iraq in 1990, the hope was to

Accepted Answer

A)  force Iraq to operate inside its existing production possibilities curve 
B)  cause Iraq's production possibilities curve to shift outward to the right 
C)  force Iraq to produce under conditions of increasing opportunity cost 
D)  cause Iraq to operate at maximum efficiency in the production of oil 
A)  force Iraq to operate inside its existing production possibilities curve 
B)  cause Iraq's production possibilities curve to shift outward to the right 
C)  force Iraq to produce under conditions of increasing opportunity cost 
D)  cause Iraq to operate at maximum efficiency in the production of oil

Question 20

Table 1.1. U.S. Production Possibilities Curve Data
 $$\begin{array} { l r r r r r r } 
& \text { A } & \text { B } & \text { C } & \text { D } & \text { E } & \text { F } \
\text { Capital goods } & 5 & 4 & 3 & 2 & 1 & 0 \
\text { Consumer goods } & 0 & 12 & 22 & 30 & 36 & 40
\end{array}$$
-Refer to Table 1.1. If the economy were operating at point C, the opportunity cost of producing an additional capital good is

Accepted Answer

A)  6 consumer goods 
B)  8 consumer goods 
C)  10 consumer goods 
D)  12 consumer goods 
A)  6 consumer goods 
B)  8 consumer goods 
C)  10 consumer goods 
D)  12 consumer goods

Which of the following would not result in an outward shift of a nation's production possibilities curve?

An entrepreneur is a person who organizes, manages, and assembles the other factors of production to produce goods and services.

A rational person will refrain from taking action if the marginal benefits exceed the marginal costs.

The downward-sloping nature of production possibilities curves reflects which basic truth of economics?

Economists recognize all of the following as factors of production except

"The unemployment rate should be kept lower than 5 percent" is a normative economics statement.

If the U.S. reduced its unemployment rate by 2%, this would shift the U.S. production possibilities curve outward.

Which of the following is not a decision that every society, regardless of its wealth and power, must make regarding the production and distribution of goods and services?

The terrorist attacks of September 11, 2001 led the U.S. to devote more of its resources to national security, creating an opportunity cost for society in terms of the other goods that were given up.

Economics is first and foremost the study of how to make a lot of money for housholds and businesses.

A study of the effects of a decrease in income taxes on U.S. consumption spending would essentially be a microeconomics issue.

An economy's production possibilities curve assumes a high unemployment rate, fixed resources, and unchanged technology.

Because of scarcity of factors of production,

Which is a question of normative economics?

Economic growth would occur for all of the following reasons except

Normative economics involve facts while while positive economics involves value judgments.

Table 1.1. U.S. Production Possibilities Curve Data A B C D E F Capital goods 5 4 3 2 1 0 Consumer goods 0 12 22 30 36 40 -Refer to Table 1.1. The data in the table show that the U.S. economy produces under conditions of

Macroeconomics addresses all of the following questions except

When the U.S. and its allies imposed economic sanctions against Iraq in 1990, the hope was to

Table 1.1. U.S. Production Possibilities Curve Data A B C D E F Capital goods 5 4 3 2 1 0 Consumer goods 0 12 22 30 36 40 -Refer to Table 1.1. If the economy were operating at point C, the opportunity cost of producing an additional capital good is

Market Transactions: Demand and Supply Analysis

Demand and Supply Applications

Production and the Costs of Production

Competition and Monopoly: Virtues and Vices

Imperfect Competition

Labor Markets

Government and Markets

The Mixed Economy of the United States

Gross Domestic Product and Economic Growth

The Business Cycle, Unemployment, and Inflation

Macroeconomic Instability: Aggregate Demand and Aggregate Supply

Fiscal Policy and the Federal Budget

Money and the Banking System

The Federal Reserve and Monetary Policy

The United States and the Global Economy

International Finance

Economic Systems and Developing Countries

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Exam 1: Scarcity and Choice

Which of the following would not result in an outward shift of a nation's production possibilities curve?

An entrepreneur is a person who organizes, manages, and assembles the other factors of production to produce goods and services.

A rational person will refrain from taking action if the marginal benefits exceed the marginal costs.

The downward-sloping nature of production possibilities curves reflects which basic truth of economics?

Economists recognize all of the following as factors of production except

"The unemployment rate should be kept lower than 5 percent" is a normative economics statement.

If the U.S. reduced its unemployment rate by 2%, this would shift the U.S. production possibilities curve outward.

Which of the following is not a decision that every society, regardless of its wealth and power, must make regarding the production and distribution of goods and services?

The terrorist attacks of September 11, 2001 led the U.S. to devote more of its resources to national security, creating an opportunity cost for society in terms of the other goods that were given up.

Economics is first and foremost the study of how to make a lot of money for housholds and businesses.

A study of the effects of a decrease in income taxes on U.S. consumption spending would essentially be a microeconomics issue.

An economy's production possibilities curve assumes a high unemployment rate, fixed resources, and unchanged technology.

Because of scarcity of factors of production,

Which is a question of normative economics?

Economic growth would occur for all of the following reasons except

Normative economics involve facts while while positive economics involves value judgments.

Table 1.1. U.S. Production Possibilities Curve Data A B C D E F Capital goods 5 4 3 2 1 0 Consumer goods 0 12 22 30 36 40 -Refer to Table 1.1. The data in the table show that the U.S. economy produces under conditions of

Macroeconomics addresses all of the following questions except

When the U.S. and its allies imposed economic sanctions against Iraq in 1990, the hope was to

Table 1.1. U.S. Production Possibilities Curve Data A B C D E F Capital goods 5 4 3 2 1 0 Consumer goods 0 12 22 30 36 40 -Refer to Table 1.1. If the economy were operating at point C, the opportunity cost of producing an additional capital good is

Market Transactions: Demand and Supply Analysis

Demand and Supply Applications

Production and the Costs of Production

Competition and Monopoly: Virtues and Vices

Imperfect Competition

Labor Markets

Government and Markets

The Mixed Economy of the United States

Gross Domestic Product and Economic Growth

The Business Cycle, Unemployment, and Inflation

Macroeconomic Instability: Aggregate Demand and Aggregate Supply

Fiscal Policy and the Federal Budget

Money and the Banking System

The Federal Reserve and Monetary Policy

The United States and the Global Economy

International Finance

Economic Systems and Developing Countries

Filters