Question 1

Which of the following is a factor of production?

Accepted Answer

A) a sofa produced by a furniture manufacturer 
B) 20 shares of Microsoft stock 
C) the janitor at the local elementary school 
D) $500 in cash 
A) a sofa produced by a furniture manufacturer 
B) 20 shares of Microsoft stock 
C) the janitor at the local elementary school 
D) $500 in cash

Question 2

The slope of a production possibilities frontier measures the ________ of producing one more unit of a good.

Accepted Answer

A) marginal revenue 
B) total revenue 
C) marginal cost 
D) opportunity cost 
A) marginal revenue 
B) total revenue 
C) marginal cost 
D) opportunity cost

Question 3

Specializing in the production of a good or service in which one has a comparative advantage enables a country to do which of the following?

Accepted Answer

A) never have to engage in trade with other nations 
B) increase the variety of products that it can produce with a decrease in resources 
C) consume a combination of goods that lies outside its own production possibilities frontier 
D) produce a combination of goods that lies outside its own production possibilities frontier 
A) never have to engage in trade with other nations 
B) increase the variety of products that it can produce with a decrease in resources 
C) consume a combination of goods that lies outside its own production possibilities frontier 
D) produce a combination of goods that lies outside its own production possibilities frontier

Question 4

To increase fuel efficiency, automobile manufacturers make cars small and light.Large cars absorb more of the impact of an accident than small cars but yield lower fuel efficiency.These facts suggest that a negative relationship exists between safety and fuel efficiency.

Accepted Answer

A) True 
 B)False

Question 5

The term "property rights" refers to

Accepted Answer

A) the physical possession of a house or any other property which the owner legally purchased. 
B) the ability to exercise control over one's own resources within the confines of the law. 
C) the government's right to appropriate land from wealthy land owners to redistribute to peasants. 
D) the right of a business not to have its assets confiscated by the government in the event that the business is accused of committing fraud. 
A) the physical possession of a house or any other property which the owner legally purchased. 
B) the ability to exercise control over one's own resources within the confines of the law. 
C) the government's right to appropriate land from wealthy land owners to redistribute to peasants. 
D) the right of a business not to have its assets confiscated by the government in the event that the business is accused of committing fraud.

Question 6

What is the difference between product markets and factor markets?

Accepted Answer

Product markets are markets fo

Question 7

The unattainable points in a production possibilities diagram are

Accepted Answer

A) the points within the production possibilities frontier. 
B) the points along the production possibilities frontier. 
C) the points of the horizontal and vertical intercepts. 
D) the points outside the production possibilities frontier. 
A) the points within the production possibilities frontier. 
B) the points along the production possibilities frontier. 
C) the points of the horizontal and vertical intercepts. 
D) the points outside the production possibilities frontier.

Question 8

Which of the following is not a factor of production?

Accepted Answer

A) an acre of farmland 
B) a drill press in a machine shop 
C) the manager of the local tire shop 
D) $1,000 in cash 
A) an acre of farmland 
B) a drill press in a machine shop 
C) the manager of the local tire shop 
D) $1,000 in cash

Question 9

Figure 2.19   Alt text for Figure 2.19: In figure 2.19, a circular flow diagram.
Long description for Figure 2.19: 4 circles arranged in a circle, labelled as follows, clockwise from the top center: Economic Agents M, Market Economic Agents J, and an unmarked circle.The flow of wages and salaries goes from market K to Economic agents M.The flow of labor services goes from Market K to Economic Agents J.
-Refer to Figure 2.19.In the circular flow diagram, Economic Agents M represents

Accepted Answer

A) households. 
B) product markets. 
C) firms. 
D) factor markets. 
A) households. 
B) product markets. 
C) firms. 
D) factor markets.

Question 10

A major factor contributing to the slow growth rate of less developed economies is

Accepted Answer

A) the lack of well-defined and enforceable property rights. 
B) the lack of natural resources. 
C) the lack of workers. 
D) the high rate of illiteracy. 
A) the lack of well-defined and enforceable property rights. 
B) the lack of natural resources. 
C) the lack of workers. 
D) the high rate of illiteracy.

Question 11

Table 2.5 
 
 Table 2.5 shows the output per week of two jewelers, Serena and Haley.They can either devote their time to making bracelets or making necklaces.
-Refer to Table 2.5.Which of the following statements is true?

Accepted Answer

A) Haley has an absolute advantage in making both products. 
B) Serena has an absolute advantage in making both products. 
C) Haley has an absolute advantage in making bracelets and Serena in making necklaces. 
D) Haley has an absolute advantage in making necklaces and Serena in making bracelets. 
A) Haley has an absolute advantage in making both products. 
B) Serena has an absolute advantage in making both products. 
C) Haley has an absolute advantage in making bracelets and Serena in making necklaces. 
D) Haley has an absolute advantage in making necklaces and Serena in making bracelets.

Question 12

A critical function of the government in facilitating the operation of a market economy is

Accepted Answer

A) producing goods and services for low-income households. 
B) setting up and enforcing private property rights. 
C) ensuring an equal distribution of income to all citizens. 
D) controlling the market prices of essential services. 
A) producing goods and services for low-income households. 
B) setting up and enforcing private property rights. 
C) ensuring an equal distribution of income to all citizens. 
D) controlling the market prices of essential services.

Question 13

Figure 2.14     Figure 2.14 shows the production possibilities frontiers for Costa Rica and Guatemala.Each country produces two goods, pineapples and coconuts.
Alt text for Figure 2.14: In figure 2.14, 2 graphs show the production possibilities frontiers for Costa Rica and Guatemala.
Long description for Figure 2.14: The graph on the left represents Costa Rica.The x-axis is labelled, coconuts, and is marked from 20 to 200 in increments of 20.The y-axis is labelled, pineapples, and is marked from 20 to 200 in increments of 20.A slanted line is drawn from point 100 on the y-axis to point 150 on the x-axis.The graph on the right represents Guatemala.The x-axis is labelled, coconuts, and is marked from 20 to 200 in increments of 20.The y-axis is labelled, pineapples, and is marked from 20 to 200 in increments of 20.A slanted line is drawn from point 90 on the y-axis to point 180 on the x-axis.
-Refer to Figure 2.14.What is the opportunity cost of producing 1 tonne of pineapples in Guatemala?

Accepted Answer

A) 1/2 of a tonne of coconuts 
B) 1 1/3 tonnes of coconuts 
C) 2 tonnes of coconuts 
D) 180 tonnes of coconuts 
A) 1/2 of a tonne of coconuts 
B) 1 1/3 tonnes of coconuts 
C) 2 tonnes of coconuts 
D) 180 tonnes of coconuts

Question 14

Figure 2.11   Alt text for Figure 2.11: In figure 2.11, a graph compares paper and steel production.
Long description for Figure 2.11: The x-axis is labelled, steel in millions of tons and the quantities 14, 16, 19, and 20 are marked.The y-axis is labelled, paper in millions of tons, and the quantities 4, 9, and 11 are marked.Points Y(14, 9), W(16, 9), (19, 4), and an unnamed point (14, 11)are plotted on the graph, and joined to the respective axes using dotted lines.A concave curve is drawn from the y-axis to the x-axis, passing through the unnamed point (14, 11), and points W(16, 9), and X(19, 4).Point Y is between the curve and the axes.
-Refer to Figure 2.11.If the economy is currently producing at point X, what is the opportunity cost of moving to point W?

Accepted Answer

A) 3 million tons of steel 
B) 19 million tons of steel 
C) 5 million tons of paper 
D) 9 million tons of paper 
A) 3 million tons of steel 
B) 19 million tons of steel 
C) 5 million tons of paper 
D) 9 million tons of paper

Question 15

Which of the following would shift a nation's production possibilities frontier outward?

Accepted Answer

A) developing solar power that is more efficient than all other methods of generating electricity. 
B) an increase in demand for the nation's products 
C) a decrease in the unemployment rate 
D) a law requiring workers to retire at age 50 
A) developing solar power that is more efficient than all other methods of generating electricity. 
B) an increase in demand for the nation's products 
C) a decrease in the unemployment rate 
D) a law requiring workers to retire at age 50

Question 16

Adam Smith's behavioural assumption about humans was that people

Accepted Answer

A) typically act irrationally. 
B) usually act in a rational, self-interested way. 
C) are consistently greedy. 
D) typically act randomly. 
A) typically act irrationally. 
B) usually act in a rational, self-interested way. 
C) are consistently greedy. 
D) typically act randomly.

Question 17

The ________ production points on a production possibility curve are the points along and inside the production possibility frontier.

Accepted Answer

A) attainable 
B) unattainable 
C) productively efficient 
D) allocatively efficient 
A) attainable 
B) unattainable 
C) productively efficient 
D) allocatively efficient

Question 18

"An Inquiry into the Nature and Causes of the Wealth of Nations" published in 1776 was written by

Accepted Answer

A) John Maynard Keynes. 
B) Karl Marx. 
C) Alfred Marshall. 
D) Adam Smith. 
A) John Maynard Keynes. 
B) Karl Marx. 
C) Alfred Marshall. 
D) Adam Smith.

Question 19

Any output combination outside a production possibility frontier is associated with unused or underutilized resources.

Accepted Answer

A) True 
 B)False

Question 20

Table 2.12   Table 2.12 shows the number of labour hours required to produce a cell phone and a cubic metre of lumber in Estonia and Finland.
-Refer to Table 2.12.Finland has a comparative advantage in the production of

Accepted Answer

A) both products. 
B) lumber. 
C) cell phones. 
D) neither product. 
A) both products. 
B) lumber. 
C) cell phones. 
D) neither product.

Which of the following is a factor of production?

The slope of a production possibilities frontier measures the ________ of producing one more unit of a good.

Specializing in the production of a good or service in which one has a comparative advantage enables a country to do which of the following?

To increase fuel efficiency, automobile manufacturers make cars small and light.Large cars absorb more of the impact of an accident than small cars but yield lower fuel efficiency.These facts suggest that a negative relationship exists between safety and fuel efficiency.

The term "property rights" refers to

What is the difference between product markets and factor markets?

The unattainable points in a production possibilities diagram are

Which of the following is not a factor of production?

A major factor contributing to the slow growth rate of less developed economies is

Table 2.5 Table 2.5 shows the output per week of two jewelers, Serena and Haley.They can either devote their time to making bracelets or making necklaces. -Refer to Table 2.5.Which of the following statements is true?

A critical function of the government in facilitating the operation of a market economy is

Which of the following would shift a nation's production possibilities frontier outward?

Adam Smith's behavioural assumption about humans was that people

The ________ production points on a production possibility curve are the points along and inside the production possibility frontier.

"An Inquiry into the Nature and Causes of the Wealth of Nations" published in 1776 was written by

Any output combination outside a production possibility frontier is associated with unused or underutilized resources.

Table 2.12 Table 2.12 shows the number of labour hours required to produce a cell phone and a cubic metre of lumber in Estonia and Finland. -Refer to Table 2.12.Finland has a comparative advantage in the production of

Economics: Foundations and Models

Where Prices Come From: The Interaction of Supply and Demand

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, The Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks, and the Bank of Canada

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Bank of Canada Policy

Macroeconomics in an Open Economy

The International Financial System

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Exam 2: Trade-Offs, Comparative Advantage, and the Market System

Which of the following is a factor of production?

The slope of a production possibilities frontier measures the ________ of producing one more unit of a good.

Specializing in the production of a good or service in which one has a comparative advantage enables a country to do which of the following?

To increase fuel efficiency, automobile manufacturers make cars small and light.Large cars absorb more of the impact of an accident than small cars but yield lower fuel efficiency.These facts suggest that a negative relationship exists between safety and fuel efficiency.

The term "property rights" refers to

What is the difference between product markets and factor markets?

The unattainable points in a production possibilities diagram are

Which of the following is not a factor of production?

A major factor contributing to the slow growth rate of less developed economies is

Table 2.5 Table 2.5 shows the output per week of two jewelers, Serena and Haley.They can either devote their time to making bracelets or making necklaces. -Refer to Table 2.5.Which of the following statements is true?

A critical function of the government in facilitating the operation of a market economy is

Which of the following would shift a nation's production possibilities frontier outward?

Adam Smith's behavioural assumption about humans was that people

The ________ production points on a production possibility curve are the points along and inside the production possibility frontier.

"An Inquiry into the Nature and Causes of the Wealth of Nations" published in 1776 was written by

Any output combination outside a production possibility frontier is associated with unused or underutilized resources.

Table 2.12 Table 2.12 shows the number of labour hours required to produce a cell phone and a cubic metre of lumber in Estonia and Finland. -Refer to Table 2.12.Finland has a comparative advantage in the production of

Economics: Foundations and Models

Where Prices Come From: The Interaction of Supply and Demand

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, The Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks, and the Bank of Canada

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Bank of Canada Policy

Macroeconomics in an Open Economy

The International Financial System

Filters