Question 1

A bowed Production Possibilities Curve (PPC)indicates

Accepted Answer

A) inefficient production. 
B) that the trade-off between the 2 goods is not constant. 
C) changing technology. 
D) only 1 good is always being produced. 
A) inefficient production. 
B) that the trade-off between the 2 goods is not constant. 
C) changing technology. 
D) only 1 good is always being produced.

Question 2

A technological improvement can cause the production possibilities curve to shift outward because

Accepted Answer

A) it increases costs and contributes to lower production rates. 
B) maximum feasible outputs of both goods increase. 
C) production will fall, but jobs will be saved. 
D) it causes increases in unemployment. 
A) it increases costs and contributes to lower production rates. 
B) maximum feasible outputs of both goods increase. 
C) production will fall, but jobs will be saved. 
D) it causes increases in unemployment.

Question 3

Scarcity refers to

Accepted Answer

A) a shortage in a good or service. 
B) the ability of society to consume all that it produces. 
C) the inability of society to satisfy all human wants because of limited resources. 
D) the inability of an individual to purchase a good or service due to her limited income. 
A) a shortage in a good or service. 
B) the ability of society to consume all that it produces. 
C) the inability of society to satisfy all human wants because of limited resources. 
D) the inability of an individual to purchase a good or service due to her limited income.

Question 4

Scarcity is caused by

Accepted Answer

A) unlimited wants running up against limited economic resources. 
B) lazy workers. 
C) an individual's budget that is insufficient to cover the expenses of certain goods or services. 
D) shortages. 
A) unlimited wants running up against limited economic resources. 
B) lazy workers. 
C) an individual's budget that is insufficient to cover the expenses of certain goods or services. 
D) shortages.

Question 5

Scarcity implies that

Accepted Answer

A) the satisfaction of one person's want means another person's want can also be satisfied. 
B) the satisfaction of one person's want means another person will be more than satisfied. 
C) the satisfaction of one person's want means another person's want cannot be satisfied. 
D) no person's wants can be satisfied. 
A) the satisfaction of one person's want means another person's want can also be satisfied. 
B) the satisfaction of one person's want means another person will be more than satisfied. 
C) the satisfaction of one person's want means another person's want cannot be satisfied. 
D) no person's wants can be satisfied.

Question 6

The above table shows the daily production possibilities for a bakery.
Currently the bakery bakes 60 pizzas and 180 loaves of bread, that is at alternative C.
-Using the above table, moving from alternative C to alternative B, what is the opportunity cost of one loaf of bread?

Accepted Answer

A) 1 pizza pie 
B) 30 pizza pies 
C) 2 pizza pies 
D) 0.5 pizza pie 
A) 1 pizza pie 
B) 30 pizza pies 
C) 2 pizza pies 
D) 0.5 pizza pie

Question 7

-Refer to the above figure. Between points f and g, the opportunity cost of producing 75 more bushels of wheat is

Accepted Answer

A) 1 bushel of beans. 
B) 4 bushels of beans. 
C) 25 bushels of beans. 
D) 100 bushels of beans. 
A) 1 bushel of beans. 
B) 4 bushels of beans. 
C) 25 bushels of beans. 
D) 100 bushels of beans.

Question 8

Comparative advantage is always a(n)________ concept.

Accepted Answer

A) absolute 
B) efficiency 
C) relative 
D) monetary 
A) absolute 
B) efficiency 
C) relative 
D) monetary

Question 9

How are scarcity, choice, and opportunity cost related?

Accepted Answer

Since resources are scarce, we cannot ha

Question 10

Specialization occurs because

Accepted Answer

A) society trades current consumption for future consumption. 
B) the production possibilities curve tends to be linear. 
C) people have different skills. 
D) society produces made the production possibilities curve. 
A) society trades current consumption for future consumption. 
B) the production possibilities curve tends to be linear. 
C) people have different skills. 
D) society produces made the production possibilities curve.

Question 11

John and Mary work eight hours at a bakery. John can decorate either 10 ice-cream cakes or 4 wedding cakes; Mary can decorate either 8 ice-cream cakes or 2 wedding cakes. According to this scenario

Accepted Answer

A) Mary has the absolute advantage in decorating wedding cakes. 
B) Mary has the absolute advantage in decorating ice-cream cakes. 
C) Mary has the comparative advantage in decorating ice-cream cakes. 
D) John has the comparative advantage in decorating ice-cream cakes. 
A) Mary has the absolute advantage in decorating wedding cakes. 
B) Mary has the absolute advantage in decorating ice-cream cakes. 
C) Mary has the comparative advantage in decorating ice-cream cakes. 
D) John has the comparative advantage in decorating ice-cream cakes.

Question 12

Which of the following is the LEAST scarce?

Accepted Answer

A) college education 
B) medicine 
C) housing 
D) air 
A) college education 
B) medicine 
C) housing 
D) air

Question 13

Which of the following would cause an economy to produce at a point inside its production possibilities curve?

Accepted Answer

A) the efficient allocation of all factors of production 
B) population growth 
C) unemployment and an inefficient use of available resources 
D) capital accumulation 
A) the efficient allocation of all factors of production 
B) population growth 
C) unemployment and an inefficient use of available resources 
D) capital accumulation

Question 14

-In the above figure, which of the following points indicates the efficient use of resources?

Accepted Answer

A) a 
B) f 
C) g 
D) h 
A) a 
B) f 
C) g 
D) h

Question 15

The concept of absolute advantage relies on

Accepted Answer

A) the idea of comparative advantage. 
B) the ability to produce more units of an item with a given amount of resources. 
C) the idea of opportunity cost. 
D) the concept of economic efficiency as measured on the production possibility curve. 
A) the idea of comparative advantage. 
B) the ability to produce more units of an item with a given amount of resources. 
C) the idea of opportunity cost. 
D) the concept of economic efficiency as measured on the production possibility curve.

Question 16

A production possibilities curve will shift inward

Accepted Answer

A) when the unemployment rate increases. 
B) when production is inefficient. 
C) when resources are expanding. 
D) when a war destroys the capital goods of a country. 
A) when the unemployment rate increases. 
B) when production is inefficient. 
C) when resources are expanding. 
D) when a war destroys the capital goods of a country.

Question 17

Explain briefly what will likely happen to society if it chooses to produce more capital goods and fewer consumption goods.

Accepted Answer

Because capital goods enable society to

Question 18

One of the assumptions underlying the production possibilities curve is that

Accepted Answer

A) at least one of the factors of production is a free good. 
B) the quantity of the resources available for the production of economic goods is fixed over a given time period. 
C) there is at least one factor of production that is employed inefficiently. 
D) some of the factors of production are not being used. 
A) at least one of the factors of production is a free good. 
B) the quantity of the resources available for the production of economic goods is fixed over a given time period. 
C) there is at least one factor of production that is employed inefficiently. 
D) some of the factors of production are not being used.

Question 19

Economists define technology as

Accepted Answer

A) machines such as computers. 
B) entrepreneurship. 
C) absolute advantage. 
D) society's knowledge concerning the production of goods. 
A) machines such as computers. 
B) entrepreneurship. 
C) absolute advantage. 
D) society's knowledge concerning the production of goods.

Question 20

-Refer to the above figure. The shape of the production possibility curve indicates that production of

Accepted Answer

A) wheat is characterized by increasing costs while the production of beans is characterized by decreasing costs. 
B) wheat is characterized by decreasing costs while the production of beans is characterized by increasing costs. 
C) both goods are characterized by increasing costs. 
D) both goods are characterized by decreasing costs. 
A) wheat is characterized by increasing costs while the production of beans is characterized by decreasing costs. 
B) wheat is characterized by decreasing costs while the production of beans is characterized by increasing costs. 
C) both goods are characterized by increasing costs. 
D) both goods are characterized by decreasing costs.

A bowed Production Possibilities Curve (PPC)indicates

A technological improvement can cause the production possibilities curve to shift outward because

Scarcity refers to

Scarcity is caused by

Scarcity implies that

The above table shows the daily production possibilities for a bakery. Currently the bakery bakes 60 pizzas and 180 loaves of bread, that is at alternative C. -Using the above table, moving from alternative C to alternative B, what is the opportunity cost of one loaf of bread?

-Refer to the above figure. Between points f and g, the opportunity cost of producing 75 more bushels of wheat is

Comparative advantage is always a(n)________ concept.

How are scarcity, choice, and opportunity cost related?

Specialization occurs because

John and Mary work eight hours at a bakery. John can decorate either 10 ice-cream cakes or 4 wedding cakes; Mary can decorate either 8 ice-cream cakes or 2 wedding cakes. According to this scenario

Which of the following is the LEAST scarce?

Which of the following would cause an economy to produce at a point inside its production possibilities curve?

-In the above figure, which of the following points indicates the efficient use of resources?

The concept of absolute advantage relies on

A production possibilities curve will shift inward

Explain briefly what will likely happen to society if it chooses to produce more capital goods and fewer consumption goods.

One of the assumptions underlying the production possibilities curve is that

Economists define technology as

-Refer to the above figure. The shape of the production possibility curve indicates that production of

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

A bowed Production Possibilities Curve (PPC)indicates

A technological improvement can cause the production possibilities curve to shift outward because

Scarcity refers to

Scarcity is caused by

Scarcity implies that

The above table shows the daily production possibilities for a bakery. Currently the bakery bakes 60 pizzas and 180 loaves of bread, that is at alternative C. -Using the above table, moving from alternative C to alternative B, what is the opportunity cost of one loaf of bread?

-Refer to the above figure. Between points f and g, the opportunity cost of producing 75 more bushels of wheat is

Comparative advantage is always a(n)________ concept.

How are scarcity, choice, and opportunity cost related?

Specialization occurs because

John and Mary work eight hours at a bakery. John can decorate either 10 ice-cream cakes or 4 wedding cakes; Mary can decorate either 8 ice-cream cakes or 2 wedding cakes. According to this scenario

Which of the following is the LEAST scarce?

Which of the following would cause an economy to produce at a point inside its production possibilities curve?

-In the above figure, which of the following points indicates the efficient use of resources?

The concept of absolute advantage relies on

A production possibilities curve will shift inward

Explain briefly what will likely happen to society if it chooses to produce more capital goods and fewer consumption goods.

One of the assumptions underlying the production possibilities curve is that

Economists define technology as

-Refer to the above figure. The shape of the production possibility curve indicates that production of

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