Question 1

A point inside a production possibilities curve indicates

Accepted Answer

A) resources are not being used efficiently. 
B) resources are being used very efficiently. 
C) opportunity costs are constant. 
D) an output combination that is unobtainable with the current resource and technology levels 
A) resources are not being used efficiently. 
B) resources are being used very efficiently. 
C) opportunity costs are constant. 
D) an output combination that is unobtainable with the current resource and technology levels

Question 2

Division of labor refers to

Accepted Answer

A) dividing tasks up into several subtasks and having one person perform these subtasks in a certain order. 
B) the separation of hourly workers from salaried workers. 
C) assigning different workers to different tasks. 
D) separating union workers from nonunion workers. 
A) dividing tasks up into several subtasks and having one person perform these subtasks in a certain order. 
B) the separation of hourly workers from salaried workers. 
C) assigning different workers to different tasks. 
D) separating union workers from nonunion workers.

Question 3

Which is the best example of an intangible good?

Accepted Answer

A) the car you dream of owning but cannot afford 
B) the suit you hope will make a good impression when you go on job interviews 
C) the textbook study guide you hope will prepare you to perform well on examinations 
D) the advice and expertise provided by the music store clerk who sold you that CD 
A) the car you dream of owning but cannot afford 
B) the suit you hope will make a good impression when you go on job interviews 
C) the textbook study guide you hope will prepare you to perform well on examinations 
D) the advice and expertise provided by the music store clerk who sold you that CD

Question 4

-In the above figure, the production of 25 guitars and 25 ukuleles is

Accepted Answer

A) efficient production. 
B) inefficient production. 
C) impossible production. 
D) not possible since production always occurs along the PPC. 
A) efficient production. 
B) inefficient production. 
C) impossible production. 
D) not possible since production always occurs along the PPC.

Question 5

Briefly explain how specialization and trade can benefit nations.

Accepted Answer

When nations specialize in what they hav

Question 6

Even though mass transit systems such as buses are available in most cities in the United States, many residents decide to drive to work in their own vehicles because

Accepted Answer

A) the opportunity cost of riding a bus is too high for them. 
B) there is no opportunity cost of them to drive. 
C) they are not aware of the opportunity cost of driving. 
D) they do not behave according to the economic way of thinking. 
A) the opportunity cost of riding a bus is too high for them. 
B) there is no opportunity cost of them to drive. 
C) they are not aware of the opportunity cost of driving. 
D) they do not behave according to the economic way of thinking.

Question 7

How is economic growth shown by the production possibilities curve?

Accepted Answer

A) by shifting the curve to the right 
B) by moving the curve to the left 
C) by moving up the existing curve 
D) by changing the shape of the curve from a straight line to one that is bowed 
A) by shifting the curve to the right 
B) by moving the curve to the left 
C) by moving up the existing curve 
D) by changing the shape of the curve from a straight line to one that is bowed

Question 8

What causes the production possibility curve to be bowed out?

Accepted Answer

A bowed production possibility curve ind

Question 9

Scarcity is

Accepted Answer

A) a shortage of goods and services. 
B) poverty and misery. 
C) a situation in which the resources for producing the goods and services that people desire are sufficient to satisfy people's desires. 
D) a situation in which the resources required to produce the goods and services that people desire are insufficient to satisfy all wants. 
A) a shortage of goods and services. 
B) poverty and misery. 
C) a situation in which the resources for producing the goods and services that people desire are sufficient to satisfy people's desires. 
D) a situation in which the resources required to produce the goods and services that people desire are insufficient to satisfy all wants.

Question 10

When two countries specialize in the production of different goods and trade with each other, it is most likely each country will

Accepted Answer

A) export the goods in which it has a comparative advantage. 
B) export the goods in which it has an absolute advantage. 
C) import the goods in which it has a comparative advantage. 
D) import the goods in which it has an absolute advantage. 
A) export the goods in which it has a comparative advantage. 
B) export the goods in which it has an absolute advantage. 
C) import the goods in which it has a comparative advantage. 
D) import the goods in which it has an absolute advantage.

Question 11

It is correct to state that a society which is on its production possibilities curve is

Accepted Answer

A) underutilizing is resources. 
B) technologically inefficient. 
C) consuming too much output. 
D) fully utilizing its productive resources. 
A) underutilizing is resources. 
B) technologically inefficient. 
C) consuming too much output. 
D) fully utilizing its productive resources.

Question 12

Which of the following sets of terms describes the problem of scarcity in economics?

Accepted Answer

A) goods, land, and needs 
B) labor, needs, and opportunity costs 
C) choices, opportunity costs, and trade-offs 
D) production, consumption, and wants 
A) goods, land, and needs 
B) labor, needs, and opportunity costs 
C) choices, opportunity costs, and trade-offs 
D) production, consumption, and wants

Question 13

-In the above figure, the opportunity cost of moving from producing 75 guitars and 25 ukuleles to producing 25 guitars and 75 ukuleles is

Accepted Answer

A) 25 guitars. 
B) 75 ukuleles. 
C) 25 ukuleles. 
D) 50 guitars. 
A) 25 guitars. 
B) 75 ukuleles. 
C) 25 ukuleles. 
D) 50 guitars.

Question 14

What is the "division of labor"?
 How is the division of labor related to production?

Accepted Answer

The division of labor refers to the segr

Question 15

Economists argue that unhindered international trade leads to an efficient outcome. What is meant by "an efficient outcome" in this context?

Accepted Answer

A) an outcome in which wages are roughly equal around the world 
B) an outcome in which the standard of living is roughly equal around the world 
C) an outcome in which an individual can choose to specialize in a certain line of work and be certain that he or she can make a living at that until retirement 
D) an outcome in which resources are devoted to their most efficient use 
A) an outcome in which wages are roughly equal around the world 
B) an outcome in which the standard of living is roughly equal around the world 
C) an outcome in which an individual can choose to specialize in a certain line of work and be certain that he or she can make a living at that until retirement 
D) an outcome in which resources are devoted to their most efficient use

Question 16

The problem of economic scarcity applies

Accepted Answer

A) only in developed countries, because resources are scarce in these nations. 
B) only in underdeveloped countries, because there are no productive resources in these nations. 
C) only to an economy with an insufficient supply of money. 
D) to the economies of all nations, regardless of their level of development. 
A) only in developed countries, because resources are scarce in these nations. 
B) only in underdeveloped countries, because there are no productive resources in these nations. 
C) only to an economy with an insufficient supply of money. 
D) to the economies of all nations, regardless of their level of development.

Question 17

In economics, international trade is based on the existence of

Accepted Answer

A) absolute advantage between countries. 
B) relative advantage between countries. 
C) comparative advantage between countries. 
D) output advantage between countries. 
A) absolute advantage between countries. 
B) relative advantage between countries. 
C) comparative advantage between countries. 
D) output advantage between countries.

Question 18

In constructing a production possibilities curve, all of the following are assumed EXCEPT

Accepted Answer

A) resources are fully employed. 
B) the quantity and quality of resources being used is fixed. 
C) the state of technology is improving. 
D) the time period involved is fixed. 
A) resources are fully employed. 
B) the quantity and quality of resources being used is fixed. 
C) the state of technology is improving. 
D) the time period involved is fixed.

Question 19

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

Question 20

Distinguish between scarcity and shortages.

Accepted Answer

Scarcity exists because the wants of hum

A point inside a production possibilities curve indicates

Division of labor refers to

Which is the best example of an intangible good?

-In the above figure, the production of 25 guitars and 25 ukuleles is

Briefly explain how specialization and trade can benefit nations.

Even though mass transit systems such as buses are available in most cities in the United States, many residents decide to drive to work in their own vehicles because

How is economic growth shown by the production possibilities curve?

What causes the production possibility curve to be bowed out?

Scarcity is

When two countries specialize in the production of different goods and trade with each other, it is most likely each country will

It is correct to state that a society which is on its production possibilities curve is

Which of the following sets of terms describes the problem of scarcity in economics?

-In the above figure, the opportunity cost of moving from producing 75 guitars and 25 ukuleles to producing 25 guitars and 75 ukuleles is

What is the "division of labor"? How is the division of labor related to production?

Economists argue that unhindered international trade leads to an efficient outcome. What is meant by "an efficient outcome" in this context?

The problem of economic scarcity applies

In economics, international trade is based on the existence of

In constructing a production possibilities curve, all of the following are assumed EXCEPT

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

Distinguish between scarcity and shortages.

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

Exam 2: Scarcity and the World of Trade-Offs

A point inside a production possibilities curve indicates

Division of labor refers to

Which is the best example of an intangible good?

-In the above figure, the production of 25 guitars and 25 ukuleles is

Briefly explain how specialization and trade can benefit nations.

Even though mass transit systems such as buses are available in most cities in the United States, many residents decide to drive to work in their own vehicles because

How is economic growth shown by the production possibilities curve?

What causes the production possibility curve to be bowed out?

Scarcity is

When two countries specialize in the production of different goods and trade with each other, it is most likely each country will

It is correct to state that a society which is on its production possibilities curve is

Which of the following sets of terms describes the problem of scarcity in economics?

-In the above figure, the opportunity cost of moving from producing 75 guitars and 25 ukuleles to producing 25 guitars and 75 ukuleles is

What is the "division of labor"? How is the division of labor related to production?

Economists argue that unhindered international trade leads to an efficient outcome. What is meant by "an efficient outcome" in this context?

The problem of economic scarcity applies

In economics, international trade is based on the existence of

In constructing a production possibilities curve, all of the following are assumed EXCEPT

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

Distinguish between scarcity and shortages.

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