Question 1

Generally, if a nation produces more consumer goods than capital goods

Accepted Answer

A) more of all goods may be produced in the future. 
B) less of all goods may be produced in the future. 
C) about the same amount of capital goods may be produced in the future as are being produced today. 
D) society will have to forego future consumption of capital goods. 
A) more of all goods may be produced in the future. 
B) less of all goods may be produced in the future. 
C) about the same amount of capital goods may be produced in the future as are being produced today. 
D) society will have to forego future consumption of capital goods.

Question 2

Tiger Woods, a professional golfer, pays a garage mechanic to change the motor oil of his car even though he can do the work himself. Which of the following best explains why Tiger Woods does not change the oil himself?

Accepted Answer

A) Tiger Woods has an absolute advantage in changing oil. 
B) Tiger Woods has a comparative advantage in changing oil. 
C) There is no opportunity cost for the garage mechanic to change oil. 
D) The opportunity cost of changing oil is higher for Tiger Woods than for the garage mechanic. 
A) Tiger Woods has an absolute advantage in changing oil. 
B) Tiger Woods has a comparative advantage in changing oil. 
C) There is no opportunity cost for the garage mechanic to change oil. 
D) The opportunity cost of changing oil is higher for Tiger Woods than for the garage mechanic.

Question 3

Human resources that perform the functions of organizing, managing, and assembling the other factors of production are called

Accepted Answer

A) physical capital. 
B) venture capital. 
C) entrepreneurs. 
D) productive capital. 
A) physical capital. 
B) venture capital. 
C) entrepreneurs. 
D) productive capital.

Question 4

If an economy is operating at a point inside the production possibilities curve, then

Accepted Answer

A) society's resources are being inefficiently utilized. 
B) the curve will move to the left. 
C) society's resources are being used to produce too many consumer goods. 
D) economic policy must implemented to slow growth of the economy further. 
A) society's resources are being inefficiently utilized. 
B) the curve will move to the left. 
C) society's resources are being used to produce too many consumer goods. 
D) economic policy must implemented to slow growth of the economy further.

Question 5

A bowed-outward production possibilities curve demonstrates the concept of

Accepted Answer

A) constant opportunity costs as production shifts from the production of one good to the production of the other good. 
B) decreasing opportunity costs as production shifts from the production of one good to the production of the other good. 
C) increasing opportunity costs as production shifts from the production of one good to the production of the other good. 
D) increasing opportunity costs at first but the opportunity costs steadily decrease as you move down along the curve. 
A) constant opportunity costs as production shifts from the production of one good to the production of the other good. 
B) decreasing opportunity costs as production shifts from the production of one good to the production of the other good. 
C) increasing opportunity costs as production shifts from the production of one good to the production of the other good. 
D) increasing opportunity costs at first but the opportunity costs steadily decrease as you move down along the curve.

Question 6

All of society's applied knowledge on how to produce goods and services is

Accepted Answer

A) held by university professors. 
B) called technology. 
C) opportunity cost. 
D) efficiency. 
A) held by university professors. 
B) called technology. 
C) opportunity cost. 
D) efficiency.

Question 7

Economic growth is shown by

Accepted Answer

A) a point near the top of the production possibilities curve. 
B) a point outside the production possibilities curve. 
C) an inward shift of the production possibilities curve. 
D) an outward shift of the production possibilities curve. 
A) a point near the top of the production possibilities curve. 
B) a point outside the production possibilities curve. 
C) an inward shift of the production possibilities curve. 
D) an outward shift of the production possibilities curve.

Question 8

Both an NBA basketball player and a fast-food cook are going to graduate school. Who has a higher opportunity cost?
 Explain.

Accepted Answer

The opportunity cost is the income lost

Question 9

Which of the following activities are production?

Accepted Answer

A) combining flour, milk, and eggs to make cookies 
B) moving coal from southern Illinois to an electrical power plant in northern Illinois 
C) taking ice cubes from a tray to put in a drink 
D) All of the above are production. 
A) combining flour, milk, and eggs to make cookies 
B) moving coal from southern Illinois to an electrical power plant in northern Illinois 
C) taking ice cubes from a tray to put in a drink 
D) All of the above are production.

Question 10

Oil found in Alaska is an example of

Accepted Answer

A) physical capital. 
B) land or natural resource. 
C) human capital. 
D) labor. 
A) physical capital. 
B) land or natural resource. 
C) human capital. 
D) labor.

Question 11

-Which of the following statements about a movement along the production possibilities curve in the above figure is FALSE?

Accepted Answer

A) An additional computer can be produced only if fewer televisions are produced. 
B) The trade-off between computers and televisions is not constant. 
C) Society cannot have more of both goods at the same time. 
D) There are no opportunity costs involved in choosing one point on the curve over all other points. 
A) An additional computer can be produced only if fewer televisions are produced. 
B) The trade-off between computers and televisions is not constant. 
C) Society cannot have more of both goods at the same time. 
D) There are no opportunity costs involved in choosing one point on the curve over all other points.

Question 12

-In the above figure, the combination of computers and televisions shown by point x

Accepted Answer

A) is not attainable at the point in time for which the graph is drawn. 
B) can be attained only if some of society's resources are unemployed. 
C) suggests that the law of increasing relative costs does not hold. 
D) results only because society allocates its resources inefficiently. 
A) is not attainable at the point in time for which the graph is drawn. 
B) can be attained only if some of society's resources are unemployed. 
C) suggests that the law of increasing relative costs does not hold. 
D) results only because society allocates its resources inefficiently.

Question 13

"My brother is better at cooking, better at cleaning, and better at fixing the car than I am." Relative to me, my brother has

Accepted Answer

A) an absolute advantage in cooking, cleaning, and car repair. 
B) a comparative advantage in cooking, cleaning, and car repair. 
C) more intelligence than me. 
D) more income than me. 
A) an absolute advantage in cooking, cleaning, and car repair. 
B) a comparative advantage in cooking, cleaning, and car repair. 
C) more intelligence than me. 
D) more income than me.

Question 14

The fact that our wants are unlimited but our resources are limited implies that

Accepted Answer

A) we should limit our wants. 
B) entrepreneurship has failed as an economic system. 
C) we have to make choices. 
D) the only way to make someone better off is to make someone else worse off. 
A) we should limit our wants. 
B) entrepreneurship has failed as an economic system. 
C) we have to make choices. 
D) the only way to make someone better off is to make someone else worse off.

Question 15

-Refer to the above figure. Which of the following points indicates an inefficient use of resources?

Accepted Answer

A) a 
B) d 
C) e 
D) More information is needed to answer the question. 
A) a 
B) d 
C) e 
D) More information is needed to answer the question.

Question 16

The above table shows the daily production possibilities for a nation.
-When the economy moves from point A to B in the above table, the opportunity cost of a computer in terms of televisions is

Accepted Answer

A) 10. 
B) 2.5. 
C) 2. 
D) 0.5. 
A) 10. 
B) 2.5. 
C) 2. 
D) 0.5.

Question 17

One of the benefits of specialization is

Accepted Answer

A) greater output. 
B) people enjoy doing one repetitive task over and over. 
C) specialists cost less to hire. 
D) training costs are higher. 
A) greater output. 
B) people enjoy doing one repetitive task over and over. 
C) specialists cost less to hire. 
D) training costs are higher.

Question 18

The most basic concept in economics is

Accepted Answer

A) wealth. 
B) income. 
C) scarcity. 
D) spending. 
A) wealth. 
B) income. 
C) scarcity. 
D) spending.

Question 19

-Refer to the above figure. Production at Point F

Accepted Answer

A) is not attainable given the underlying assumptions of the production possibilities curve (PP
C) . 
B) would not be desirable. 
C) can only be attained by giving up Point E. 
D) can be attained only if a society desired more goods and services. 
A) is not attainable given the underlying assumptions of the production possibilities curve (PP
C) . 
B) would not be desirable. 
C) can only be attained by giving up Point E. 
D) can be attained only if a society desired more goods and services.

Question 20

Which of the following is TRUE with respect to specialization?

Accepted Answer

A) Adam Smith in The Wealth of Nations referred to specialization and division of labor. 
B) With a given set of resources, specialization results in higher output. 
C) Individuals and nations specialize in their areas of comparative advantage in order to reap the gains of specialization. 
D) All of the above are correct. 
A) Adam Smith in The Wealth of Nations referred to specialization and division of labor. 
B) With a given set of resources, specialization results in higher output. 
C) Individuals and nations specialize in their areas of comparative advantage in order to reap the gains of specialization. 
D) All of the above are correct.

Generally, if a nation produces more consumer goods than capital goods

Tiger Woods, a professional golfer, pays a garage mechanic to change the motor oil of his car even though he can do the work himself. Which of the following best explains why Tiger Woods does not change the oil himself?

Human resources that perform the functions of organizing, managing, and assembling the other factors of production are called

If an economy is operating at a point inside the production possibilities curve, then

A bowed-outward production possibilities curve demonstrates the concept of

All of society's applied knowledge on how to produce goods and services is

Economic growth is shown by

Both an NBA basketball player and a fast-food cook are going to graduate school. Who has a higher opportunity cost? Explain.

Which of the following activities are production?

Oil found in Alaska is an example of

-Which of the following statements about a movement along the production possibilities curve in the above figure is FALSE?

-In the above figure, the combination of computers and televisions shown by point x

"My brother is better at cooking, better at cleaning, and better at fixing the car than I am." Relative to me, my brother has

The fact that our wants are unlimited but our resources are limited implies that

-Refer to the above figure. Which of the following points indicates an inefficient use of resources?

The above table shows the daily production possibilities for a nation. -When the economy moves from point A to B in the above table, the opportunity cost of a computer in terms of televisions is

One of the benefits of specialization is

The most basic concept in economics is

-Refer to the above figure. Production at Point F

Which of the following is TRUE with respect to specialization?

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

Generally, if a nation produces more consumer goods than capital goods

Tiger Woods, a professional golfer, pays a garage mechanic to change the motor oil of his car even though he can do the work himself. Which of the following best explains why Tiger Woods does not change the oil himself?

Human resources that perform the functions of organizing, managing, and assembling the other factors of production are called

If an economy is operating at a point inside the production possibilities curve, then

A bowed-outward production possibilities curve demonstrates the concept of

All of society's applied knowledge on how to produce goods and services is

Economic growth is shown by

Both an NBA basketball player and a fast-food cook are going to graduate school. Who has a higher opportunity cost? Explain.

Which of the following activities are production?

Oil found in Alaska is an example of

-Which of the following statements about a movement along the production possibilities curve in the above figure is FALSE?

-In the above figure, the combination of computers and televisions shown by point x

"My brother is better at cooking, better at cleaning, and better at fixing the car than I am." Relative to me, my brother has

The fact that our wants are unlimited but our resources are limited implies that

-Refer to the above figure. Which of the following points indicates an inefficient use of resources?

The above table shows the daily production possibilities for a nation. -When the economy moves from point A to B in the above table, the opportunity cost of a computer in terms of televisions is

One of the benefits of specialization is

The most basic concept in economics is

-Refer to the above figure. Production at Point F

Which of the following is TRUE with respect to specialization?

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