Question 1

Naturally occurring diamonds are an example of

Accepted Answer

A) land. 
B) labor. 
C) physical capital. 
D) human capital. 
A) land. 
B) labor. 
C) physical capital. 
D) human capital.

Question 2

Which of the following is TRUE about comparative advantage?

Accepted Answer

A) Comparative advantage explains trade among nations, but not within nations. 
B) Comparative advantage explains trade within nations, but not among nations. 
C) Comparative advantage explains trade within nations and among nations. 
D) Comparative advantage has nothing to do with trade among nations; it only is concerned with specialization within a firm. 
A) Comparative advantage explains trade among nations, but not within nations. 
B) Comparative advantage explains trade within nations, but not among nations. 
C) Comparative advantage explains trade within nations and among nations. 
D) Comparative advantage has nothing to do with trade among nations; it only is concerned with specialization within a firm.

Question 3

Scarcity implies that

Accepted Answer

A) people should limit their wants, since shortages exist. 
B) firms should be more efficient when producing goods. 
C) people must make choices. 
D) nonrenewable resources should never be used. 
A) people should limit their wants, since shortages exist. 
B) firms should be more efficient when producing goods. 
C) people must make choices. 
D) nonrenewable resources should never be used.

Question 4

Economists are concerned with an individual's

Accepted Answer

A) needs because needs represent the most important goods to an individual. 
B) needs because economists define needs to be the goods people need to survive. 
C) wants because, unlike needs, wants lead to shortages in the economy. 
D) wants because the existence of wants leads to scarcity. 
A) needs because needs represent the most important goods to an individual. 
B) needs because economists define needs to be the goods people need to survive. 
C) wants because, unlike needs, wants lead to shortages in the economy. 
D) wants because the existence of wants leads to scarcity.

Question 5

A bowed outward production possibilities curve occurs when

Accepted Answer

A) opportunity costs are constant. 
B) resources are not scarce. 
C) additional units of output of one good necessitate greater reductions in the other good. 
D) there are shortages in the goods being produced. 
A) opportunity costs are constant. 
B) resources are not scarce. 
C) additional units of output of one good necessitate greater reductions in the other good. 
D) there are shortages in the goods being produced.

Question 6

Human capital is

Accepted Answer

A) what people get from physical capital. 
B) the accumulation of skills, training and education of workers. 
C) the value obtained from selling stocks and bonds. 
D) the human resources that perform the function of raising capital. 
A) what people get from physical capital. 
B) the accumulation of skills, training and education of workers. 
C) the value obtained from selling stocks and bonds. 
D) the human resources that perform the function of raising capital.

Question 7

Which of the following statements is FALSE about opportunity cost?

Accepted Answer

A) Cost is always foregone opportunity. 
B) Opportunity cost is the next best alternative. 
C) John wants a burger and fries. The concept of opportunity cost applies even though he has enough funds to buy both. 
D) Opportunity cost exists only for goods with monetary values. 
A) Cost is always foregone opportunity. 
B) Opportunity cost is the next best alternative. 
C) John wants a burger and fries. The concept of opportunity cost applies even though he has enough funds to buy both. 
D) Opportunity cost exists only for goods with monetary values.

Question 8

"Economics is the study of how people eliminate scarcity." Do you agree or disagree?
 Why?

Accepted Answer

Disagree. Economics is the study of how

Question 9

Scarcity affects

Accepted Answer

A) only rich people. 
B) only poor people. 
C) only middle income people. 
D) all people. 
A) only rich people. 
B) only poor people. 
C) only middle income people. 
D) all people.

Question 10

A person goes to college to become an engineer. This is an example of an

Accepted Answer

A) investment in physical capital. 
B) investment in human capital. 
C) increase in entrepreneurship. 
D) increase in labor. 
A) investment in physical capital. 
B) investment in human capital. 
C) increase in entrepreneurship. 
D) increase in labor.

Question 11

Which of the following statements indicates the idea of trade-offs?

Accepted Answer

A) "I chose the road less traveled." 
B) "The devil made me do it." 
C) "You've got me under your spell." 
D) "Always give it the best that you can." 
A) "I chose the road less traveled." 
B) "The devil made me do it." 
C) "You've got me under your spell." 
D) "Always give it the best that you can."

Question 12

-In the above figure, the opportunity cost of moving from point A to point C is

Accepted Answer

A) 50 guitars. 
B) 0 guitars. 
C) 25 guitars. 
D) 50 ukuleles. 
A) 50 guitars. 
B) 0 guitars. 
C) 25 guitars. 
D) 50 ukuleles.

Question 13

All of the following are resources EXCEPT

Accepted Answer

A) doctors because they perform services. 
B) the land the Statue of Liberty sits on. 
C) the computer in the student computer lab. 
D) money. 
A) doctors because they perform services. 
B) the land the Statue of Liberty sits on. 
C) the computer in the student computer lab. 
D) money.

Question 14

-Refer to the above figure. Which of the following statements is TRUE?

Accepted Answer

A) Point a is efficient, Point b is efficient, point c is inefficient. 
B) Point a is unobtainable, point b is efficient and point c is inefficient. 
C) Point a is inefficient, point b is efficient and point c is unobtainable. 
D) All of the points are efficient. 
A) Point a is efficient, Point b is efficient, point c is inefficient. 
B) Point a is unobtainable, point b is efficient and point c is inefficient. 
C) Point a is inefficient, point b is efficient and point c is unobtainable. 
D) All of the points are efficient.

Question 15

Entrepreneurs are important to market economies because

Accepted Answer

A) they engage in risk taking and innovation. 
B) they make up a large portion of low-skilled labor. 
C) they take few risks and thereby, suffer fewer bankruptcies. 
D) they represent the bulk of employment at large corporations. 
A) they engage in risk taking and innovation. 
B) they make up a large portion of low-skilled labor. 
C) they take few risks and thereby, suffer fewer bankruptcies. 
D) they represent the bulk of employment at large corporations.

Question 16

Opportunity cost is

Accepted Answer

A) the combined value of all the alternatives not selected. 
B) the same thing as the money price of a good. 
C) the value of the next best alternative which was given up. 
D) based on the intrinsic value of the good itself. 
A) the combined value of all the alternatives not selected. 
B) the same thing as the money price of a good. 
C) the value of the next best alternative which was given up. 
D) based on the intrinsic value of the good itself.

Question 17

Services can be thought of as

Accepted Answer

A) unvalued goods. 
B) unwanted goods. 
C) free goods. 
D) intangible goods. 
A) unvalued goods. 
B) unwanted goods. 
C) free goods. 
D) intangible goods.

Question 18

Assume that Economy A and Economy B have the same resources, but that individuals in Economy A have specialized whereas individuals in Economy B have not. Given this information, you can determine that

Accepted Answer

A) Economy A will have a higher output than Economy B. 
B) Economy A will have a lower output than Economy B. 
C) Economy A and Economy B will have identical outputs. 
D) individuals in Economy A will have lower incomes than individuals in Economy B. 
A) Economy A will have a higher output than Economy B. 
B) Economy A will have a lower output than Economy B. 
C) Economy A and Economy B will have identical outputs. 
D) individuals in Economy A will have lower incomes than individuals in Economy B.

Question 19

If a country wants to promote future growth, it should

Accepted Answer

A) produce more capital goods today. 
B) produce more consumer goods today. 
C) produce only economic goods. 
D) produce only needed goods. 
A) produce more capital goods today. 
B) produce more consumer goods today. 
C) produce only economic goods. 
D) produce only needed goods.

Question 20

Which of the following is NOT an economic resource?

Accepted Answer

A) money 
B) low-skilled labor 
C) coal 
D) an engineer 
A) money 
B) low-skilled labor 
C) coal 
D) an engineer

Naturally occurring diamonds are an example of

Which of the following is TRUE about comparative advantage?

Scarcity implies that

Economists are concerned with an individual's

A bowed outward production possibilities curve occurs when

Human capital is

Which of the following statements is FALSE about opportunity cost?

"Economics is the study of how people eliminate scarcity." Do you agree or disagree? Why?

Scarcity affects

A person goes to college to become an engineer. This is an example of an

Which of the following statements indicates the idea of trade-offs?

-In the above figure, the opportunity cost of moving from point A to point C is

All of the following are resources EXCEPT

-Refer to the above figure. Which of the following statements is TRUE?

Entrepreneurs are important to market economies because

Opportunity cost is

Services can be thought of as

Assume that Economy A and Economy B have the same resources, but that individuals in Economy A have specialized whereas individuals in Economy B have not. Given this information, you can determine that

If a country wants to promote future growth, it should

Which of the following is NOT an economic resource?

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

Naturally occurring diamonds are an example of

Which of the following is TRUE about comparative advantage?

Scarcity implies that

Economists are concerned with an individual's

A bowed outward production possibilities curve occurs when

Human capital is

Which of the following statements is FALSE about opportunity cost?

"Economics is the study of how people eliminate scarcity." Do you agree or disagree? Why?

Scarcity affects

A person goes to college to become an engineer. This is an example of an

Which of the following statements indicates the idea of trade-offs?

-In the above figure, the opportunity cost of moving from point A to point C is

All of the following are resources EXCEPT

-Refer to the above figure. Which of the following statements is TRUE?

Entrepreneurs are important to market economies because

Opportunity cost is

Services can be thought of as

Assume that Economy A and Economy B have the same resources, but that individuals in Economy A have specialized whereas individuals in Economy B have not. Given this information, you can determine that

If a country wants to promote future growth, it should

Which of the following is NOT an economic resource?

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