Question 1

Explain what will happen to the production possibilities curve over time if society gives up some consumption goods in favor of more capital goods.

Accepted Answer

If society chooses to give up some consu

Question 2

When a society takes increasing amounts of resources and applies them to the production of a specific good, resulting in increasing opportunity costs for each additional unit produced, which of the following applies?

Accepted Answer

A) the law of demand 
B) the law of supply 
C) the law of scarcity 
D) the law of increasing additional costs 
A) the law of demand 
B) the law of supply 
C) the law of scarcity 
D) the law of increasing additional costs

Question 3

The existence of scarcity means that

Accepted Answer

A) there are not enough resources to satisfy unlimited human wants. 
B) firms will increase their production to eliminate the scarcity. 
C) the government will step in to eliminate the scarcity. 
D) firms working with the government will allocate resources to eliminate the scarcity. 
A) there are not enough resources to satisfy unlimited human wants. 
B) firms will increase their production to eliminate the scarcity. 
C) the government will step in to eliminate the scarcity. 
D) firms working with the government will allocate resources to eliminate the scarcity.

Question 4

Suppose you have four choices-go to a movie, read a book, watch television, or go to a concert. You choose to go to a movie. The opportunity cost of the movie is

Accepted Answer

A) the value of the book not read. 
B) the value of the television program not watched. 
C) the value of the concert that you didn't attend. 
D) the value of the activity that you would have selected if you hadn't gone to the movie. 
A) the value of the book not read. 
B) the value of the television program not watched. 
C) the value of the concert that you didn't attend. 
D) the value of the activity that you would have selected if you hadn't gone to the movie.

Question 5

The production possibilities curve for two products is bowed out because

Accepted Answer

A) as the production of a good increases, opportunity cost increases. 
B) as the production of a good increases, opportunity cost is unchanged. 
C) the qualities of the resources are not identical. 
D) there are unemployed resources. 
A) as the production of a good increases, opportunity cost increases. 
B) as the production of a good increases, opportunity cost is unchanged. 
C) the qualities of the resources are not identical. 
D) there are unemployed resources.

Question 6

Comparative advantage is

Accepted Answer

A) when a country can produce a good at a lower opportunity cost compared to other countries. 
B) when a country can produce all goods more quickly than any other country. 
C) when the production possibilities curve shifts outward to the right. 
D) only for individuals and not countries. 
A) when a country can produce a good at a lower opportunity cost compared to other countries. 
B) when a country can produce all goods more quickly than any other country. 
C) when the production possibilities curve shifts outward to the right. 
D) only for individuals and not countries.

Question 7

Which of the following will most likely happen when better technology is used in production?

Accepted Answer

A) an upward movement along the production possibilities curve 
B) an outward shift of the production possibilities curve 
C) an inward shift of the production possibilities curve 
D) a downward movement along the production possibilities curve 
A) an upward movement along the production possibilities curve 
B) an outward shift of the production possibilities curve 
C) an inward shift of the production possibilities curve 
D) a downward movement along the production possibilities curve

Question 8

Scarcity implies that people must

Accepted Answer

A) be miserable. 
B) be selfish. 
C) make choices. 
D) not be selfish. 
A) be miserable. 
B) be selfish. 
C) make choices. 
D) not be selfish.

Question 9

Explain what is meant by economic efficiency. Does efficiency imply that the fastest production processes or the most powerful equipment must always be used?
 Explain.

Accepted Answer

Efficiency involves a situatio

Question 10

The division of productive activities among persons and regions so that no one individual or area is totally self-sufficient is known as

Accepted Answer

A) advantage-taking. 
B) comparative value. 
C) specialization. 
D) outsourcing. 
A) advantage-taking. 
B) comparative value. 
C) specialization. 
D) outsourcing.

Question 11

Which of the following are considered factors of production?
I. Land
II. Labor
III. Physical capital
IV. Entrepreneurship

Accepted Answer

A) I and II only 
B) I and III only 
C) I, II and III only 
D) I, II, III and IV 
A) I and II only 
B) I and III only 
C) I, II and III only 
D) I, II, III and IV

Question 12

Scarcity

Accepted Answer

A) does not exist in the United States. 
B) applies only to developing countries. 
C) is caused by production problems. 
D) is not a shortage. 
A) does not exist in the United States. 
B) applies only to developing countries. 
C) is caused by production problems. 
D) is not a shortage.

Question 13

Jane is a top-level executive earning a high salary. Jane has just ordered a luxury car only to be told that she will have to wait three weeks for it to be delivered. Which of the following statements is TRUE?

Accepted Answer

A) The car is not a scarce good. 
B) The car is an economic good. 
C) The car is human capital. 
D) The car is an intangible good. 
A) The car is not a scarce good. 
B) The car is an economic good. 
C) The car is human capital. 
D) The car is an intangible good.

Question 14

All of the following would cause the production possibilities curve to shift outward EXCEPT

Accepted Answer

A) an improvement in technology. 
B) an increase in the amount of labor available. 
C) a decline in the unemployment rate. 
D) an increase in the level of capital stock. 
A) an improvement in technology. 
B) an increase in the amount of labor available. 
C) a decline in the unemployment rate. 
D) an increase in the level of capital stock.

Question 15

When a country or a region of a country specializes in producing the product that has the lower opportunity cost compared to another country or region, it is practicing

Accepted Answer

A) absolute advantage. 
B) cost disadvantage. 
C) regional advantage. 
D) comparative advantage. 
A) absolute advantage. 
B) cost disadvantage. 
C) regional advantage. 
D) comparative advantage.

Question 16

-Refer to the above figure. The Law of Increasing Additional Costs applies in

Accepted Answer

A) Panel A only. 
B) Panel B only. 
C) Panels A and B. 
D) neither Panel A nor B. 
A) Panel A only. 
B) Panel B only. 
C) Panels A and B. 
D) neither Panel A nor B.

Question 17

An outward bowed production possibilities curve illustrates

Accepted Answer

A) inefficient production. 
B) the law of increasing additional cost. 
C) a lack of scarcity. 
D) zero opportunity cost of moving from inefficient production to currently unobtainable production. 
A) inefficient production. 
B) the law of increasing additional cost. 
C) a lack of scarcity. 
D) zero opportunity cost of moving from inefficient production to currently unobtainable production.

Question 18

Which of the following statements is NOT an assumption underlying the production possibilities curve?

Accepted Answer

A) Resources are fully and efficiently employed. 
B) Technology is fixed. 
C) Production occurs over some specified time period. 
D) The amount of resources available for production can be changed quickly. 
A) Resources are fully and efficiently employed. 
B) Technology is fixed. 
C) Production occurs over some specified time period. 
D) The amount of resources available for production can be changed quickly.

Question 19

-In the above figure, the opportunity cost of moving from point D to point E is

Accepted Answer

A) 75 guitars. 
B) 55 guitars. 
C) 100 ukuleles. 
D) 100 guitars. 
A) 75 guitars. 
B) 55 guitars. 
C) 100 ukuleles. 
D) 100 guitars.

Question 20

Juanita has just opened a new business selling pet supplies through the Internet.

Accepted Answer

A) Juanita is an entrepreneur. 
B) Juanita is not providing economic goods since people purchase the goods. 
C) Juanita is not providing economic goods since pet supplies are not being sold in a store. 
D) Juanita is not an entrepreneur since there are other businesses that sell pet supplies. 
A) Juanita is an entrepreneur. 
B) Juanita is not providing economic goods since people purchase the goods. 
C) Juanita is not providing economic goods since pet supplies are not being sold in a store. 
D) Juanita is not an entrepreneur since there are other businesses that sell pet supplies.

Explain what will happen to the production possibilities curve over time if society gives up some consumption goods in favor of more capital goods.

When a society takes increasing amounts of resources and applies them to the production of a specific good, resulting in increasing opportunity costs for each additional unit produced, which of the following applies?

The existence of scarcity means that

Suppose you have four choices-go to a movie, read a book, watch television, or go to a concert. You choose to go to a movie. The opportunity cost of the movie is

The production possibilities curve for two products is bowed out because

Comparative advantage is

Which of the following will most likely happen when better technology is used in production?

Scarcity implies that people must

Explain what is meant by economic efficiency. Does efficiency imply that the fastest production processes or the most powerful equipment must always be used? Explain.

The division of productive activities among persons and regions so that no one individual or area is totally self-sufficient is known as

Which of the following are considered factors of production? I. Land II. Labor III. Physical capital IV. Entrepreneurship

Scarcity

Jane is a top-level executive earning a high salary. Jane has just ordered a luxury car only to be told that she will have to wait three weeks for it to be delivered. Which of the following statements is TRUE?

All of the following would cause the production possibilities curve to shift outward EXCEPT

When a country or a region of a country specializes in producing the product that has the lower opportunity cost compared to another country or region, it is practicing

-Refer to the above figure. The Law of Increasing Additional Costs applies in

An outward bowed production possibilities curve illustrates

Which of the following statements is NOT an assumption underlying the production possibilities curve?

-In the above figure, the opportunity cost of moving from point D to point E is

Juanita has just opened a new business selling pet supplies through the Internet.

The Nature of Economics

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money Banking and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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Exam 2: Scarcity and the World of Trade-Offs

Explain what will happen to the production possibilities curve over time if society gives up some consumption goods in favor of more capital goods.

When a society takes increasing amounts of resources and applies them to the production of a specific good, resulting in increasing opportunity costs for each additional unit produced, which of the following applies?

The existence of scarcity means that

Suppose you have four choices-go to a movie, read a book, watch television, or go to a concert. You choose to go to a movie. The opportunity cost of the movie is

The production possibilities curve for two products is bowed out because

Comparative advantage is

Which of the following will most likely happen when better technology is used in production?

Scarcity implies that people must

Explain what is meant by economic efficiency. Does efficiency imply that the fastest production processes or the most powerful equipment must always be used? Explain.

The division of productive activities among persons and regions so that no one individual or area is totally self-sufficient is known as

Which of the following are considered factors of production? I. Land II. Labor III. Physical capital IV. Entrepreneurship

Scarcity

Jane is a top-level executive earning a high salary. Jane has just ordered a luxury car only to be told that she will have to wait three weeks for it to be delivered. Which of the following statements is TRUE?

All of the following would cause the production possibilities curve to shift outward EXCEPT

When a country or a region of a country specializes in producing the product that has the lower opportunity cost compared to another country or region, it is practicing

-Refer to the above figure. The Law of Increasing Additional Costs applies in

An outward bowed production possibilities curve illustrates

Which of the following statements is NOT an assumption underlying the production possibilities curve?

-In the above figure, the opportunity cost of moving from point D to point E is

Juanita has just opened a new business selling pet supplies through the Internet.

The Nature of Economics

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money Banking and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters