Question 1

In economics, physical capital includes

Accepted Answer

A) money. 
B) bank accounts. 
C) machinery. 
D) shares of stock. 
A) money. 
B) bank accounts. 
C) machinery. 
D) shares of stock.

Question 2

Opportunity cost is

Accepted Answer

A) the cost of producing all goods and services in the United States. 
B) the value of the next-best alternative that must be sacrificed to satisfy a want. 
C) the fixed cost of production. 
D) the value of the most useful alternative that must be sacrificed to obtain something or satisfy a want. 
A) the cost of producing all goods and services in the United States. 
B) the value of the next-best alternative that must be sacrificed to satisfy a want. 
C) the fixed cost of production. 
D) the value of the most useful alternative that must be sacrificed to obtain something or satisfy a want.

Question 3

When an employee at a grocery store scans the price of your items, bags the groceries, and collects your paper, the individual has provided

Accepted Answer

A) physical capital. 
B) entrepreneurship. 
C) a service. 
D) land. 
A) physical capital. 
B) entrepreneurship. 
C) a service. 
D) land.

Question 4

Which of the following is NOT an assumption used in deriving a production possibilities curve?

Accepted Answer

A) The labor force is growing at a constant rate. 
B) Resources are fully employed. 
C) Technology is constant. 
D) The quantity of resources is constant. 
A) The labor force is growing at a constant rate. 
B) Resources are fully employed. 
C) Technology is constant. 
D) The quantity of resources is constant.

Question 5

The above table shows the daily production possibilities for a nation.
-According to the above table, the opportunity cost of each additional computer in terms of televisions

Accepted Answer

A) remains constant. 
B) falls as more computers are produced. 
C) increases as more computers are produced. 
D) is meaningless because the cost of computers cannot be expressed in terms of televisions. 
A) remains constant. 
B) falls as more computers are produced. 
C) increases as more computers are produced. 
D) is meaningless because the cost of computers cannot be expressed in terms of televisions.

Question 6

Which of the following would result in a movement along the production possibilities curve?

Accepted Answer

A) a fall in the unemployment rate 
B) growth in the capital stock 
C) population growth 
D) a change in the outputs of two goods that a society chooses to produce 
A) a fall in the unemployment rate 
B) growth in the capital stock 
C) population growth 
D) a change in the outputs of two goods that a society chooses to produce

Question 7

Fred and Ann both decide to see the same movie when they are given free movie tickets. We know that

Accepted Answer

A) both bear an opportunity cost since they could have done other things instead of see the movie. 
B) both bear the same opportunity cost since they are doing the same thing. 
C) the cost of going to the movie is greater for the one who had more choices to do other things. 
D) neither bears an opportunity cost because the tickets were free. 
A) both bear an opportunity cost since they could have done other things instead of see the movie. 
B) both bear the same opportunity cost since they are doing the same thing. 
C) the cost of going to the movie is greater for the one who had more choices to do other things. 
D) neither bears an opportunity cost because the tickets were free.

Question 8

The tasks performed by the chef at your favorite restaurant could be categorized as

Accepted Answer

A) a good. 
B) an economic good. 
C) a service or intangible good. 
D) All of the above are correct. 
A) a good. 
B) an economic good. 
C) a service or intangible good. 
D) All of the above are correct.

Question 9

Suppose that Canadian farmers can grow wheat more cheaply than can U.S. farmers. In the interest of efficiency, what is the desirable outcome?

Accepted Answer

A) Allow the Canadian farmers to sell their wheat for a lower price. 
B) Pass a law in Canada mandating a minimum price for wheat equal to what is charged by U.S. farmers. 
C) Pass a law in the United States mandating a maximum price for wheat equal to what is charged by Canadian farmers. 
D) Have U.S. citizens boycott Canadian wheat. 
A) Allow the Canadian farmers to sell their wheat for a lower price. 
B) Pass a law in Canada mandating a minimum price for wheat equal to what is charged by U.S. farmers. 
C) Pass a law in the United States mandating a maximum price for wheat equal to what is charged by Canadian farmers. 
D) Have U.S. citizens boycott Canadian wheat.

Question 10

Suppose that nuclear power plants are banned. What are examples of the opportunity costs of this decision?

Accepted Answer

Electricity must be produced by some met

Question 11

The production possibilities curve (PPC)illustrates economic growth by a(n)

Accepted Answer

A) bowed-out shape of the PPC. 
B) outward shift of the PPC. 
C) inward shift of the PPC. 
D) movement along the PPC. 
A) bowed-out shape of the PPC. 
B) outward shift of the PPC. 
C) inward shift of the PPC. 
D) movement along the PPC.

Question 12

Which of the following is NOT an economic good?

Accepted Answer

A) a haircut 
B) broccoli 
C) garbage 
D) a textbook 
A) a haircut 
B) broccoli 
C) garbage 
D) a textbook

Question 13

If the production of capital goods is shown along the horizontal axis of a production possibilities curve, and the production of consumer goods is shown along the vertical axis of a production possibilities curve, and the economy desires to have a rapid rate of economic growth, then the economy should produce at a point

Accepted Answer

A) near the middle of the curve dividing resources equally between the production of consumer and capital goods. 
B) at a point near the vertical axis concentrating on the production of consumer goods. 
C) at a point near the horizontal axis concentrating on the production of capital goods. 
D) at a point inside the curve allowing the economy to adjust rapidly to changes in economic activity. 
A) near the middle of the curve dividing resources equally between the production of consumer and capital goods. 
B) at a point near the vertical axis concentrating on the production of consumer goods. 
C) at a point near the horizontal axis concentrating on the production of capital goods. 
D) at a point inside the curve allowing the economy to adjust rapidly to changes in economic activity.

Question 14

Trading off capital goods for increasing amounts of consumer goods today will most likely result in

Accepted Answer

A) increased long-term growth. 
B) decreased long-term growth. 
C) decreased prices in consumer goods. 
D) increases in the quantity of consumer goods. 
A) increased long-term growth. 
B) decreased long-term growth. 
C) decreased prices in consumer goods. 
D) increases in the quantity of consumer goods.

Question 15

When Adam Smith's ten pin workers specialized, they were able to increase output of pins in a day from 200 to 48,000. One reason for the increase in pin output was due to

Accepted Answer

A) the time saved when workers do not need to shift from one task to another. 
B) the boredom the workers suffered when they stopped making a whole pin and only concentrated on one task such as painting the heads white. 
C) new machinery. 
D) the bonus they received when they produced more pins. 
A) the time saved when workers do not need to shift from one task to another. 
B) the boredom the workers suffered when they stopped making a whole pin and only concentrated on one task such as painting the heads white. 
C) new machinery. 
D) the bonus they received when they produced more pins.

Question 16

Opportunity cost is illustrated on the production possibilities curve by a

Accepted Answer

A) bowed-out shape of the curve. 
B) shift to the right of the curve. 
C) shift to the left of the curve. 
D) movement along the curve. 
A) bowed-out shape of the curve. 
B) shift to the right of the curve. 
C) shift to the left of the curve. 
D) movement along the curve.

Question 17

Briefly explain why people make choices.

Accepted Answer

People make choices because of

Question 18

The saying that "You cannot have your cake and eat it too" illustrates the economic concept of

Accepted Answer

A) a positive statement. 
B) a normative statement. 
C) physical capital. 
D) opportunity cost. 
A) a positive statement. 
B) a normative statement. 
C) physical capital. 
D) opportunity cost.

Question 19

Human beings

Accepted Answer

A) have unlimited wants. 
B) think they have unlimited wants, but really have limited needs. 
C) have limited wants, but unlimited needs. 
D) know what their needs are, but do not know what their wants are. 
A) have unlimited wants. 
B) think they have unlimited wants, but really have limited needs. 
C) have limited wants, but unlimited needs. 
D) know what their needs are, but do not know what their wants are.

Question 20

The difference between scarcity and a shortage is that

Accepted Answer

A) scarcity is caused by poverty and shortages are caused by natural disasters. 
B) shortages are a type of scarcity caused by natural disasters while scarcity is caused by human errors. 
C) scarcity always is a part of human life while shortages usually are temporary. 
D) shortages are always part of human life while scarcity is usually temporary. 
A) scarcity is caused by poverty and shortages are caused by natural disasters. 
B) shortages are a type of scarcity caused by natural disasters while scarcity is caused by human errors. 
C) scarcity always is a part of human life while shortages usually are temporary. 
D) shortages are always part of human life while scarcity is usually temporary.

In economics, physical capital includes

Opportunity cost is

When an employee at a grocery store scans the price of your items, bags the groceries, and collects your paper, the individual has provided

Which of the following is NOT an assumption used in deriving a production possibilities curve?

The above table shows the daily production possibilities for a nation. -According to the above table, the opportunity cost of each additional computer in terms of televisions

Which of the following would result in a movement along the production possibilities curve?

Fred and Ann both decide to see the same movie when they are given free movie tickets. We know that

The tasks performed by the chef at your favorite restaurant could be categorized as

Suppose that Canadian farmers can grow wheat more cheaply than can U.S. farmers. In the interest of efficiency, what is the desirable outcome?

Suppose that nuclear power plants are banned. What are examples of the opportunity costs of this decision?

The production possibilities curve (PPC)illustrates economic growth by a(n)

Which of the following is NOT an economic good?

Trading off capital goods for increasing amounts of consumer goods today will most likely result in

When Adam Smith's ten pin workers specialized, they were able to increase output of pins in a day from 200 to 48,000. One reason for the increase in pin output was due to

Opportunity cost is illustrated on the production possibilities curve by a

Briefly explain why people make choices.

The saying that "You cannot have your cake and eat it too" illustrates the economic concept of

Human beings

The difference between scarcity and a shortage is that

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

In economics, physical capital includes

Opportunity cost is

When an employee at a grocery store scans the price of your items, bags the groceries, and collects your paper, the individual has provided

Which of the following is NOT an assumption used in deriving a production possibilities curve?

The above table shows the daily production possibilities for a nation. -According to the above table, the opportunity cost of each additional computer in terms of televisions

Which of the following would result in a movement along the production possibilities curve?

Fred and Ann both decide to see the same movie when they are given free movie tickets. We know that

The tasks performed by the chef at your favorite restaurant could be categorized as

Suppose that Canadian farmers can grow wheat more cheaply than can U.S. farmers. In the interest of efficiency, what is the desirable outcome?

Suppose that nuclear power plants are banned. What are examples of the opportunity costs of this decision?

The production possibilities curve (PPC)illustrates economic growth by a(n)

Which of the following is NOT an economic good?

Trading off capital goods for increasing amounts of consumer goods today will most likely result in

When Adam Smith's ten pin workers specialized, they were able to increase output of pins in a day from 200 to 48,000. One reason for the increase in pin output was due to

Opportunity cost is illustrated on the production possibilities curve by a

Briefly explain why people make choices.

The saying that "You cannot have your cake and eat it too" illustrates the economic concept of

Human beings

The difference between scarcity and a shortage is that

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