Question 1

How can economic growth be illustrated?

Accepted Answer

A) by an inward shift of the production possibilities curve 
B) by a movement from a point on the production possibilities curve to a point inside the production possibilities curve 
C) by an outward shift of the production possibilities curve 
D) by a movement along the production possibilities curve 
A) by an inward shift of the production possibilities curve 
B) by a movement from a point on the production possibilities curve to a point inside the production possibilities curve 
C) by an outward shift of the production possibilities curve 
D) by a movement along the production possibilities curve

Question 2

FIGURE 2-4
  
-Refer to Figure 2-4.Which of the following points corresponds to an economy experiencing significant unemployment and/or producing inefficiently?

Accepted Answer

A) Point A 
B) Point C 
C) Point E 
D) Point F 
A) Point A 
B) Point C 
C) Point E 
D) Point F

Question 3

What does a straight-line production possibilities curve illustrate?

Accepted Answer

A) The opportunity cost of production does not vary along the curve. 
B) The output combinations along the curve provide equal levels of satisfaction to consumers. 
C) The opportunity cost of production of the good on the Y-axis increases as you move down along the curve. 
D) The market price of the two goods is the same everywhere along the curve. 
A) The opportunity cost of production does not vary along the curve. 
B) The output combinations along the curve provide equal levels of satisfaction to consumers. 
C) The opportunity cost of production of the good on the Y-axis increases as you move down along the curve. 
D) The market price of the two goods is the same everywhere along the curve.

Question 4

Movement from one point on the production possibilities curve to another leads to more of both goods being produced.

Accepted Answer

A) True 
 B)False

Question 5

A devastating earthquake destroys 10 percent of the population in Vancouver.What is the result?

Accepted Answer

A) Vancouver moves in a southeast direction along its production possibilities curve. 
B) Vancouver's production possibility curve shifts inward. 
C) Vancouver's production possibility curve shifts outward. 
D) Vancouver moves in a northwest direction along its production possibilities curve. 
A) Vancouver moves in a southeast direction along its production possibilities curve. 
B) Vancouver's production possibility curve shifts inward. 
C) Vancouver's production possibility curve shifts outward. 
D) Vancouver moves in a northwest direction along its production possibilities curve.

Question 6

Lumber prices fall in Calgary,Alberta,because new forests are opened for harvesting in nearby British Columbia.As a result,what might you expect to find in the Calgary housing industry?

Accepted Answer

A) Less labour will be used to construct homes as wages fall relative to the price of lumber. 
B) Less wood will be used in the construction of new homes because the price is now cheaper. 
C) Steel frames for houses are replacing wood frames because wood is considered a cheap substitute. 
D) More wood is being used in the construction of new homes. 
A) Less labour will be used to construct homes as wages fall relative to the price of lumber. 
B) Less wood will be used in the construction of new homes because the price is now cheaper. 
C) Steel frames for houses are replacing wood frames because wood is considered a cheap substitute. 
D) More wood is being used in the construction of new homes.

Question 7

Why is a production possibilities curve negatively sloped?

Accepted Answer

A) Resources are wasted as you move along the curve. 
B) The price of a good falls as you move down along the curve. 
C) Once on the frontier, it is possible to increase production of one good only by reducing production of the other. 
D) It is not possible to adjust production decisions once an economy operates on the curve. 
A) Resources are wasted as you move along the curve. 
B) The price of a good falls as you move down along the curve. 
C) Once on the frontier, it is possible to increase production of one good only by reducing production of the other. 
D) It is not possible to adjust production decisions once an economy operates on the curve.

Question 8

FIGURE 2-3
  
-Refer to Figure 2-3.Which of the following movements will result in an increase in the quantity of both capital and consumption goods produced this period?

Accepted Answer

A) a movement from Point D to Point F 
B) a movement from Point F to Point D 
C) a movement from Point B to Point A 
D) a movement from Point F to Point A 
A) a movement from Point D to Point F 
B) a movement from Point F to Point D 
C) a movement from Point B to Point A 
D) a movement from Point F to Point A

Question 9

FIGURE 2-3
  
-Refer to Figure 2-3.Which of the following movements will result in a decrease in the production of capital goods but an increase in the production of consumption goods this period?

Accepted Answer

A) a movement from Point A to Point B 
B) a movement from Point C to Point E 
C) a movement from Point D to Point G 
D) a movement from Point B to Point A 
A) a movement from Point A to Point B 
B) a movement from Point C to Point E 
C) a movement from Point D to Point G 
D) a movement from Point B to Point A

Question 10

FIGURE 2-3
  
-Refer to Figure 2-3.What is the most efficient point of production depicted?

Accepted Answer

A) Point D 
B) Point E 
C) Point F 
D) Point G 
A) Point D 
B) Point E 
C) Point F 
D) Point G

Question 11

Which of the following illustrates excessive unemployment of resources on a production possibilities curve?

Accepted Answer

A) an inward shift of the curve 
B) a point inside the curve 
C) a movement along the curve in a northwest direction 
D) an outward shift of the curve 
A) an inward shift of the curve 
B) a point inside the curve 
C) a movement along the curve in a northwest direction 
D) an outward shift of the curve

Question 12

FIGURE 2-14
  
-Refer to Figure 2-14.Moving from Point C to Point D,what is the opportunity cost of producing a mountain bike?

Accepted Answer

The answer of FIGURE 2-14
  
-Refer to Figure 2-14.Moving...

Question 13

What will occur when a command economy is utilized to resolve economic questions regarding the allocation of resources?

Accepted Answer

A) Everyone will receive an equal share of the output produced. 
B) The role of markets will be replaced by political decision making. 
C) The preferences of individuals will become of no importance. 
D) Economic efficiency will be assured. 
A) Everyone will receive an equal share of the output produced. 
B) The role of markets will be replaced by political decision making. 
C) The preferences of individuals will become of no importance. 
D) Economic efficiency will be assured.

Question 14

How does a "command economy" compare to a "market economy"?

Accepted Answer

A) Production and distribution decisions are made by central planners in a command economy, but not in a market economy. 
B) There is scarcity in command economies, but not in market economies. 
C) Command economies are less prone to inflation than are market economies. 
D) A command economy is more efficient than a market economy because decision making is centralized. 
A) Production and distribution decisions are made by central planners in a command economy, but not in a market economy. 
B) There is scarcity in command economies, but not in market economies. 
C) Command economies are less prone to inflation than are market economies. 
D) A command economy is more efficient than a market economy because decision making is centralized.

Question 15

FIGURE 2-3
  
-Refer to Figure 2-3.Comparatively,at which point is the opportunity cost of one more unit of a consumption good greater?

Accepted Answer

A) It is greater at Point C than at Point D. 
B) It is greater at Point D than at Point E. 
C) It is greater at Point E than at Point D. 
D) It is greater at Point B than at Point A. 
A) It is greater at Point C than at Point D. 
B) It is greater at Point D than at Point E. 
C) It is greater at Point E than at Point D. 
D) It is greater at Point B than at Point A.

Question 16

How does an economist define efficiency?

Accepted Answer

A) the creation of a surplus using available resources 
B) the maximization of revenue from available resources 
C) the maximization of output from available resources 
D) the maximization of inputs using available resources 
A) the creation of a surplus using available resources 
B) the maximization of revenue from available resources 
C) the maximization of output from available resources 
D) the maximization of inputs using available resources

Question 17

Which of the following is NOT a question that scarcity forces all societies to answer?

Accepted Answer

A) How are goods and services to be produced? 
B) Who will get the goods and services produced? 
C) How can scarcity be eliminated? 
D) Which goods and services are to be produced? 
A) How are goods and services to be produced? 
B) Who will get the goods and services produced? 
C) How can scarcity be eliminated? 
D) Which goods and services are to be produced?

Question 18

Three economic questions must be determined in all societies.What are they?

Accepted Answer

A) What goods will be produced? How will goods be produced? For whom will goods be produced? 
B) What is the opportunity cost of production? Does the society have a comparative advantage in production? Will consumers desire the goods being produced? 
C) What will the price of each good be? Who will produce each good? Who will consume each good? 
D) How much will be produced? When will it be produced? How much will it cost? 
A) What goods will be produced? How will goods be produced? For whom will goods be produced? 
B) What is the opportunity cost of production? Does the society have a comparative advantage in production? Will consumers desire the goods being produced? 
C) What will the price of each good be? Who will produce each good? Who will consume each good? 
D) How much will be produced? When will it be produced? How much will it cost?

Question 19

In a command economy,how are decisions about how to allocate resources made?

Accepted Answer

A) by a lottery system 
B) by individuals and firms interacting in markets coordinated by a price system 
C) by the firms that have the most power in the market 
D) by a central planning board 
A) by a lottery system 
B) by individuals and firms interacting in markets coordinated by a price system 
C) by the firms that have the most power in the market 
D) by a central planning board

Question 20

Which of the following will NOT shift the production possibilities curve in an inward direction?

Accepted Answer

A) a sharp increase in the unemployment rate 
B) destruction of property and people by a devastating war 
C) a decrease in the capital stock 
D) contamination of land due to a nuclear meltdown 
A) a sharp increase in the unemployment rate 
B) destruction of property and people by a devastating war 
C) a decrease in the capital stock 
D) contamination of land due to a nuclear meltdown

How can economic growth be illustrated?

FIGURE 2-4 -Refer to Figure 2-4.Which of the following points corresponds to an economy experiencing significant unemployment and/or producing inefficiently?

What does a straight-line production possibilities curve illustrate?

Movement from one point on the production possibilities curve to another leads to more of both goods being produced.

A devastating earthquake destroys 10 percent of the population in Vancouver.What is the result?

Lumber prices fall in Calgary,Alberta,because new forests are opened for harvesting in nearby British Columbia.As a result,what might you expect to find in the Calgary housing industry?

Why is a production possibilities curve negatively sloped?

FIGURE 2-3 -Refer to Figure 2-3.Which of the following movements will result in an increase in the quantity of both capital and consumption goods produced this period?

FIGURE 2-3 -Refer to Figure 2-3.Which of the following movements will result in a decrease in the production of capital goods but an increase in the production of consumption goods this period?

FIGURE 2-3 -Refer to Figure 2-3.What is the most efficient point of production depicted?

Which of the following illustrates excessive unemployment of resources on a production possibilities curve?

FIGURE 2-14 -Refer to Figure 2-14.Moving from Point C to Point D,what is the opportunity cost of producing a mountain bike?

What will occur when a command economy is utilized to resolve economic questions regarding the allocation of resources?

How does a "command economy" compare to a "market economy"?

FIGURE 2-3 -Refer to Figure 2-3.Comparatively,at which point is the opportunity cost of one more unit of a consumption good greater?

How does an economist define efficiency?

Which of the following is NOT a question that scarcity forces all societies to answer?

Three economic questions must be determined in all societies.What are they?

In a command economy,how are decisions about how to allocate resources made?

Which of the following will NOT shift the production possibilities curve in an inward direction?

The Role and Method of Economics

Supply and Demand

Bringing Supply and Demand Together

Introduction to the Macroeconomy

Measuring Economic Performance

Economic Growth in the Global Economy

Aggregate Demand

Aggregate Supply and Macroeconomic Equilibrium

Fiscal Policy

Money and the Banking System

The Bank of Canada

Monetary Policy

International Trade

International Finance

Filters

Exam 2: Scarcity, trade-Offs, and Production Possibilities

How can economic growth be illustrated?

FIGURE 2-4 -Refer to Figure 2-4.Which of the following points corresponds to an economy experiencing significant unemployment and/or producing inefficiently?

What does a straight-line production possibilities curve illustrate?

Movement from one point on the production possibilities curve to another leads to more of both goods being produced.

A devastating earthquake destroys 10 percent of the population in Vancouver.What is the result?

Lumber prices fall in Calgary,Alberta,because new forests are opened for harvesting in nearby British Columbia.As a result,what might you expect to find in the Calgary housing industry?

Why is a production possibilities curve negatively sloped?

FIGURE 2-3 -Refer to Figure 2-3.Which of the following movements will result in an increase in the quantity of both capital and consumption goods produced this period?

FIGURE 2-3 -Refer to Figure 2-3.Which of the following movements will result in a decrease in the production of capital goods but an increase in the production of consumption goods this period?

FIGURE 2-3 -Refer to Figure 2-3.What is the most efficient point of production depicted?

Which of the following illustrates excessive unemployment of resources on a production possibilities curve?

FIGURE 2-14 -Refer to Figure 2-14.Moving from Point C to Point D,what is the opportunity cost of producing a mountain bike?

What will occur when a command economy is utilized to resolve economic questions regarding the allocation of resources?

How does a "command economy" compare to a "market economy"?

FIGURE 2-3 -Refer to Figure 2-3.Comparatively,at which point is the opportunity cost of one more unit of a consumption good greater?

How does an economist define efficiency?

Which of the following is NOT a question that scarcity forces all societies to answer?

Three economic questions must be determined in all societies.What are they?

In a command economy,how are decisions about how to allocate resources made?

Which of the following will NOT shift the production possibilities curve in an inward direction?

The Role and Method of Economics

Supply and Demand

Bringing Supply and Demand Together

Introduction to the Macroeconomy

Measuring Economic Performance

Economic Growth in the Global Economy

Aggregate Demand

Aggregate Supply and Macroeconomic Equilibrium

Fiscal Policy

Money and the Banking System

The Bank of Canada

Monetary Policy

International Trade

International Finance

Filters