Question 1

A computer software program is most strongly an example of

Accepted Answer

A)  real property. 
B)  fiat property. 
C)  intellectual property. 
D)  vicarious property. 
A)  real property. 
B)  fiat property. 
C)  intellectual property. 
D)  vicarious property.

Question 2

Explain why the production possibilities frontier bows outward.

Accepted Answer

The bowed outward PPF reflects increasin

Question 3

-In the figure above,at the allocatively efficient level of computer production consumers are willing to give up

Accepted Answer

A)  0 televisions per computer. 
B)  between 0 and 3 televisions per computer. 
C)  3 televisions per computer. 
D)  more than 3 televisions per computer. 
A)  0 televisions per computer. 
B)  between 0 and 3 televisions per computer. 
C)  3 televisions per computer. 
D)  more than 3 televisions per computer.

Question 4

The social arrangement that gives John Grisham,the writer of best-selling novels,the ownership of his novels is

Accepted Answer

A)  a market. 
B)  property rights. 
C)  absolute advantage. 
D)  dynamic comparative advantage. 
A)  a market. 
B)  property rights. 
C)  absolute advantage. 
D)  dynamic comparative advantage.

Question 5

A president of the United States promises to produce more defense goods without any decreases in the production of other goods.This promise can be valid

Accepted Answer

A)  if the United States is producing at a point on its production possibilities frontier. 
B)  if the United States is producing at a point inside its production possibilities frontier. 
C)  if the United States is producing at a point beyond its production possibilities frontier. 
D)  only if the production possibilities frontier shifts rightward. 
A)  if the United States is producing at a point on its production possibilities frontier. 
B)  if the United States is producing at a point inside its production possibilities frontier. 
C)  if the United States is producing at a point beyond its production possibilities frontier. 
D)  only if the production possibilities frontier shifts rightward.

Question 6

Marginal benefit is the

Accepted Answer

A)  benefit that a person receives from consuming one more unit of a good or service. 
B)  amount of one good or service that a person gains when another good or service is consumed. 
C)  minimum amount a person is willing to pay for one more unit of a good or service. 
D)  dollars sacrificed to purchase a good or service. 
A)  benefit that a person receives from consuming one more unit of a good or service. 
B)  amount of one good or service that a person gains when another good or service is consumed. 
C)  minimum amount a person is willing to pay for one more unit of a good or service. 
D)  dollars sacrificed to purchase a good or service.

Question 7

In the figure above,

Accepted Answer

A)  moving from point a to point b would require new technology. 
B)  production at point b is efficient whereas production at point a is not efficient. 
C)  some resources must be unemployed at point c. 
D)  opportunity costs are decreasing. 
A)  moving from point a to point b would require new technology. 
B)  production at point b is efficient whereas production at point a is not efficient. 
C)  some resources must be unemployed at point c. 
D)  opportunity costs are decreasing.

Question 8

The production possibilities frontier itself illustrates

Accepted Answer

A)  all goods that can be produced by an economy 
B)  the combination of goods and services that can be produced efficiently 
C)  all goods and services that are desired but cannot be produced due to scarce resources. 
D)  all possible production of capital goods 
A)  all goods that can be produced by an economy 
B)  the combination of goods and services that can be produced efficiently 
C)  all goods and services that are desired but cannot be produced due to scarce resources. 
D)  all possible production of capital goods

Question 9

Most students attending college pay tuition and are unable to hold a full-time job.For these students,tuition is

Accepted Answer

A)  part of the opportunity cost of going to college. So are their forgone earnings from not holding a full-time job. 
B)  part of the opportunity cost of going to college. Their forgone earnings from not holding a full-time job are not part of the opportunity cost of attending college. 
C)  not part of the opportunity cost of going to college, but their forgone earnings from not holding a full-time job are part of the opportunity cost of attending college. 
D)  not part of the opportunity cost of going to college. Neither are their forgone earnings from not holding a full-time job. 
A)  part of the opportunity cost of going to college. So are their forgone earnings from not holding a full-time job. 
B)  part of the opportunity cost of going to college. Their forgone earnings from not holding a full-time job are not part of the opportunity cost of attending college. 
C)  not part of the opportunity cost of going to college, but their forgone earnings from not holding a full-time job are part of the opportunity cost of attending college. 
D)  not part of the opportunity cost of going to college. Neither are their forgone earnings from not holding a full-time job.

Question 10

Which graph shows the impact of scientists developing a more powerful fertilizer?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D

Question 11

A person has a comparative advantage in producing a particular good if that person

Accepted Answer

A)  has higher productivity in producing it than anyone else has. 
B)  can produce it at lower opportunity cost than anyone else can. 
C)  has less desire to consume that good than anyone else has. 
D)  has more human capital related to that good than anyone else has. 
A)  has higher productivity in producing it than anyone else has. 
B)  can produce it at lower opportunity cost than anyone else can. 
C)  has less desire to consume that good than anyone else has. 
D)  has more human capital related to that good than anyone else has.

Question 12

In the movie Cast Away,Tom Hanks plays a FedEx efficiency expert stranded on a deserted island.While on the island,he divides his time between catching fish,gathering coconuts,painting,and building a raft.Suppose that these were Mr.Hanks' only activities.Did he face an opportunity cost from pursuing any of these activities?
Why or why not?

Accepted Answer

Yes,Mr.Hanks faces an opportunity cost f

Question 13

Technological change

Accepted Answer

A)  generates economic growth. 
B)  shifts the PPF leftward. 
C)  creates inefficiency. 
D)  Both answers A and C are correct. 
A)  generates economic growth. 
B)  shifts the PPF leftward. 
C)  creates inefficiency. 
D)  Both answers A and C are correct.

Question 14

-In order to achieve the maximum gains from trade,people should specialize according to

Accepted Answer

A)  property rights. 
B)  PPF. 
C)  absolute advantage. 
D)  comparative advantage. 
A)  property rights. 
B)  PPF. 
C)  absolute advantage. 
D)  comparative advantage.

Question 15

What economic concepts are represented in the production possibilities model?

Accepted Answer

There are a large number of economic con

Question 16

$$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Quantity } \
\text { (millions of } \
\text { bushes of apples) }
\end{array} & \begin{array} { c } 
\text { Marginal benefit } \
\text { (oranges per } \
\text { bushel) }
\end{array} & \begin{array} { c } 
\text { Marginal Cost } \
\text { (oranges per } \
\text { bushel) }
\end{array} \
\hline 5 & 10 & 1 \
\hline 10 & 8 & 3 \
\hline 15 & 6 & 6 \
\hline 20 & 4 & 9 \
\hline 25 & 2 & 12 \
\hline
\end{array}$$
-Using the values for the marginal benefit and the marginal cost of a bushel of apples given in the table above,what is the allocatively efficient quantity of apples?
Suppose 10 million bushels of apples are produced.Should the quantity be increased or deceased?
What if 20 million bushels are produced; should the quantity be increased or decreased?

Accepted Answer

The allocatively efficient quantity of a

Question 17

Resource use is allocatively efficient if the

Accepted Answer

A)  total cost of what the resource produces is less than the total benefit of what is produced. 
B)  total cost of what the resource produces is equal to the total benefit of what is produced. 
C)  marginal benefit of what the resource produces has diminished to zero. 
D)  marginal cost of what the resource produces is equal to the marginal benefit of what is produced. 
A)  total cost of what the resource produces is less than the total benefit of what is produced. 
B)  total cost of what the resource produces is equal to the total benefit of what is produced. 
C)  marginal benefit of what the resource produces has diminished to zero. 
D)  marginal cost of what the resource produces is equal to the marginal benefit of what is produced.

Question 18

The nation's production possibilities frontier is bowed outward.Suppose that the government decides to increase the production of armaments by $20 billion,and that as a result the output of consumer goods falls by $20 billion.If a further $20 billion increase beyond the initial $20 billion increase in armaments output is sought,we can expect that the output of consumer goods and services will fall further by

Accepted Answer

A)  less than $20 billion. 
B)  $20 billion. 
C)  more than $20 billion. 
D)  There is not enough information to determine the answer. 
A)  less than $20 billion. 
B)  $20 billion. 
C)  more than $20 billion. 
D)  There is not enough information to determine the answer.

Question 19

-As Rainclouds Inc.moves downward along its production possibilities frontier,illustrated in the figure above,the opportunity cost of a raincoat ________.

Accepted Answer

A)  decreases 
B)  depends on the initial quantity produced 
C)  increases 
D)  remains the same 
A)  decreases 
B)  depends on the initial quantity produced 
C)  increases 
D)  remains the same

Question 20

The kitchen manager at an Italian restaurant is deciding what assignments he should give to his two cooks,John and David.John can make 25 pizzas or 40 servings of pasta per hour and David can make 20 pizzas or 30 servings of pasta.Which of the following should be the manager's choice?

Accepted Answer

A)  Fire David because he is not as productive as John. John will do both jobs. 
B)  John will make pizza because he has comparative advantage in making pizza. 
C)  David will make pizza because he has comparative advantage in making pizza. 
D)  John and David both will spend half their time making pizza and half their time making pasta because each has a comparative advantage in making pizza. 
A)  Fire David because he is not as productive as John. John will do both jobs. 
B)  John will make pizza because he has comparative advantage in making pizza. 
C)  David will make pizza because he has comparative advantage in making pizza. 
D)  John and David both will spend half their time making pizza and half their time making pasta because each has a comparative advantage in making pizza.

A computer software program is most strongly an example of

Explain why the production possibilities frontier bows outward.

-In the figure above,at the allocatively efficient level of computer production consumers are willing to give up

The social arrangement that gives John Grisham,the writer of best-selling novels,the ownership of his novels is

A president of the United States promises to produce more defense goods without any decreases in the production of other goods.This promise can be valid

Marginal benefit is the

In the figure above,

The production possibilities frontier itself illustrates

Most students attending college pay tuition and are unable to hold a full-time job.For these students,tuition is

Which graph shows the impact of scientists developing a more powerful fertilizer?

A person has a comparative advantage in producing a particular good if that person

Technological change

-In order to achieve the maximum gains from trade,people should specialize according to

What economic concepts are represented in the production possibilities model?

Resource use is allocatively efficient if the

-As Rainclouds Inc.moves downward along its production possibilities frontier,illustrated in the figure above,the opportunity cost of a raincoat ________.

The kitchen manager at an Italian restaurant is deciding what assignments he should give to his two cooks,John and David.John can make 25 pizzas or 40 servings of pasta per hour and David can make 20 pizzas or 30 servings of pasta.Which of the following should be the manager's choice?

What Is Economics

Demand and Supply

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, The Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

Inflation, Jobs, and the Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Introduction

Monitoring Macroeconomic Performance

Macroeconomic Trends

Macroeconomic Fluctuations

Macroeconomic Policy

Filters

Exam 2: The Economic Problem

A computer software program is most strongly an example of

Explain why the production possibilities frontier bows outward.

-In the figure above,at the allocatively efficient level of computer production consumers are willing to give up

The social arrangement that gives John Grisham,the writer of best-selling novels,the ownership of his novels is

A president of the United States promises to produce more defense goods without any decreases in the production of other goods.This promise can be valid

Marginal benefit is the

In the figure above,

The production possibilities frontier itself illustrates

Most students attending college pay tuition and are unable to hold a full-time job.For these students,tuition is

Which graph shows the impact of scientists developing a more powerful fertilizer?

A person has a comparative advantage in producing a particular good if that person

Technological change

-In order to achieve the maximum gains from trade,people should specialize according to

What economic concepts are represented in the production possibilities model?

Resource use is allocatively efficient if the

-As Rainclouds Inc.moves downward along its production possibilities frontier,illustrated in the figure above,the opportunity cost of a raincoat ________.

The kitchen manager at an Italian restaurant is deciding what assignments he should give to his two cooks,John and David.John can make 25 pizzas or 40 servings of pasta per hour and David can make 20 pizzas or 30 servings of pasta.Which of the following should be the manager's choice?

What Is Economics

Demand and Supply

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, The Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

Inflation, Jobs, and the Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Introduction

Monitoring Macroeconomic Performance

Macroeconomic Trends

Macroeconomic Fluctuations

Macroeconomic Policy

Filters