Question 1

Explain the difference between marginal cost and marginal benefit.

Accepted Answer

Marginal benefit is the benefit someone

Question 2

How do property rights help organize production and trade?

Accepted Answer

Property rights are necessary in order f

Question 3

-Employees at Bank of America are good at providing banking services and workers at Ben & Jerry's are good at making ice cream. The figure above shows the marginal cost and marginal benefit curves for ice cream. If 1 million gallons of ice cream are being produced

Accepted Answer

A)  the cost an additional gallon of ice cream is more than people think it is worth. 
B)  more banking services should be produced. 
C)  the marginal cost of an additional gallon of ice cream is greater the value people place on it. 
D)  people value an additional gallon of ice cream more highly than its cost of production. 
A)  the cost an additional gallon of ice cream is more than people think it is worth. 
B)  more banking services should be produced. 
C)  the marginal cost of an additional gallon of ice cream is greater the value people place on it. 
D)  people value an additional gallon of ice cream more highly than its cost of production.

Question 4

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 5

"The United States is more productive in most activities than are most of other countries because it has an absolute advantage in the production of most goods and services. Therefore we should restrict international trade as it only benefits other countries at the expense of the United States." Comment on this statement.

Accepted Answer

The United States may be more productive

Question 6

-In one day, Brandon can either plow 10 acres or plant 20 acres. In one day, Christopher can either plow 14 acres or plant 14 acres. Which of the following statements about comparative advantage is CORRECT?

Accepted Answer

A)  Brandon has a comparative advantage in both plowing and planting. 
B)  Brandon has a comparative advantage only in plowing. 
C)  Brandon has a comparative advantage only in planting. 
D)  Christopher has a comparative advantage in both plowing and planting. 
A)  Brandon has a comparative advantage in both plowing and planting. 
B)  Brandon has a comparative advantage only in plowing. 
C)  Brandon has a comparative advantage only in planting. 
D)  Christopher has a comparative advantage in both plowing and planting.

Question 7

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

Accepted Answer

A)  the loss in production in the health care sector. 
B)  the increase in production in the education sector. 
C)  zero. 
D)  the loss in production in the education sector. 
A)  the loss in production in the health care sector. 
B)  the increase in production in the education sector. 
C)  zero. 
D)  the loss in production in the education sector.

Question 8

In the United States, the government coordinates most of the economic activity.

Accepted Answer

A) True 
 B)False

Question 9

Harry produces 2 balloon rides and 4 boat rides an hour. Harry could produce more balloon rides but to do so he must produce fewer boat rides. Harry is ________ his production possibilities frontier.

Accepted Answer

A)  producing inside 
B)  producing on 
C)  producing outside 
D)  producing either inside or on 
A)  producing inside 
B)  producing on 
C)  producing outside 
D)  producing either inside or on

Question 10

-The above table shows production points on Sweet-Tooth Land's production possibilities frontier. A movement from ________ represents the greatest opportunity cost of increasing cola production.

Accepted Answer

A)  point E to point D 
B)  point D to point C 
C)  point C to point B 
D)  point B to point A 
A)  point E to point D 
B)  point D to point C 
C)  point C to point B 
D)  point B to point A

Question 11

An expansion of the production possibilities frontier is

Accepted Answer

A)  called economic growth. 
B)  proof that scarcity is not a binding constraint. 
C)  a free gift of nature. 
D)  something that has occurred only rarely in history. 
A)  called economic growth. 
B)  proof that scarcity is not a binding constraint. 
C)  a free gift of nature. 
D)  something that has occurred only rarely in history.

Question 12

When the opportunity cost of producing more of a good is increasing, the marginal cost of producing more of the good is

Accepted Answer

A)  decreasing. 
B)  constant. 
C)  increasing. 
D)  More information is needed to answer the question. 
A)  decreasing. 
B)  constant. 
C)  increasing. 
D)  More information is needed to answer the question.

Question 13

Intellectual property

Accepted Answer

A)  is protected by common law rather than by written laws. 
B)  is protected by people's sense of decency rather than by written laws. 
C)  belongs to everyone with the necessary human capital to use it. 
D)  is often protected by copyrights and patents. 
A)  is protected by common law rather than by written laws. 
B)  is protected by people's sense of decency rather than by written laws. 
C)  belongs to everyone with the necessary human capital to use it. 
D)  is often protected by copyrights and patents.

Question 14

A nation can produce at a point outside its PPF

Accepted Answer

A)  when it trades with other nations. 
B)  when it produces inefficiently. 
C)  when its PPF is bowed out. 
D)  never. 
A)  when it trades with other nations. 
B)  when it produces inefficiently. 
C)  when its PPF is bowed out. 
D)  never.

Question 15

-The table above lists six points on the production possibilities frontier for grain and cars. What is the opportunity cost of producing the 26th car?

Accepted Answer

A)  2 tons of grain per car 
B)  4 tons of grain per car 
C)  0.25 tons of grain per car 
D)  0.5 tons of grain per car 
A)  2 tons of grain per car 
B)  4 tons of grain per car 
C)  0.25 tons of grain per car 
D)  0.5 tons of grain per car

Question 16

-The table above shows the marginal benefit from pizza and the marginal cost of pizza in cans of soda forgone. If ________ pizzas are produced, the quantity of soda that people are willing to give up to get an additional pizza is more than the quantity of soda that they must give up to get that additional pizza.

Accepted Answer

A)  any quantity other than 40 
B)  40 
C)  more than 40 
D)  fewer than 40 
A)  any quantity other than 40 
B)  40 
C)  more than 40 
D)  fewer than 40

Question 17

Tom and Di grow tomatoes and turnips. Tom has a comparative advantage in growing tomatoes if ________.

Accepted Answer

A)  Tom can grow more tomatoes than Di can 
B)  his opportunity cost of tomatoes is less than Di's opportunity cost of tomatoes 
C)  his opportunity cost of tomatoes is less than his opportunity cost of turnips 
D)  his marginal benefit from tomatoes is greater than Di's 
A)  Tom can grow more tomatoes than Di can 
B)  his opportunity cost of tomatoes is less than Di's opportunity cost of tomatoes 
C)  his opportunity cost of tomatoes is less than his opportunity cost of turnips 
D)  his marginal benefit from tomatoes is greater than Di's

Question 18

-In the figure above, point A is undesirable because

Accepted Answer

A)  there is an inefficient use of resources. 
B)  too much health care is being produced. 
C)  the opportunity costs of health care is too high. 
D)  point E is a more realistic option in this economy. 
A)  there is an inefficient use of resources. 
B)  too much health care is being produced. 
C)  the opportunity costs of health care is too high. 
D)  point E is a more realistic option in this economy.

Question 19

As residents of developing countries increase their chocolate consumption, the increased production of cocoa results in

Accepted Answer

A)  increased opportunity cost of cocoa production. 
B)  decreased opportunity cost of cocoa production. 
C)  no change in production of other goods and services. 
D)  increased production of other goods and services. 
A)  increased opportunity cost of cocoa production. 
B)  decreased opportunity cost of cocoa production. 
C)  no change in production of other goods and services. 
D)  increased production of other goods and services.

Question 20

-In the figure above, suppose that Mac and Izzie trade and reach point c. Then

Accepted Answer

A)  Mac and Izzie should both produce at point a. 
B)  Mac should produce at point b and Izzie should produce at point d. 
C)  Mac should produce at point d and Izzie should produce at point b. 
D)  Mac and Izzie should both produce at point c. 
A)  Mac and Izzie should both produce at point a. 
B)  Mac should produce at point b and Izzie should produce at point d. 
C)  Mac should produce at point d and Izzie should produce at point b. 
D)  Mac and Izzie should both produce at point c.

Explain the difference between marginal cost and marginal benefit.

How do property rights help organize production and trade?

-Employees at Bank of America are good at providing banking services and workers at Ben & Jerry's are good at making ice cream. The figure above shows the marginal cost and marginal benefit curves for ice cream. If 1 million gallons of ice cream are being produced

Resource use is allocatively efficient if the

-In one day, Brandon can either plow 10 acres or plant 20 acres. In one day, Christopher can either plow 14 acres or plant 14 acres. Which of the following statements about comparative advantage is CORRECT?

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

In the United States, the government coordinates most of the economic activity.

Harry produces 2 balloon rides and 4 boat rides an hour. Harry could produce more balloon rides but to do so he must produce fewer boat rides. Harry is ________ his production possibilities frontier.

-The above table shows production points on Sweet-Tooth Land's production possibilities frontier. A movement from ________ represents the greatest opportunity cost of increasing cola production.

An expansion of the production possibilities frontier is

When the opportunity cost of producing more of a good is increasing, the marginal cost of producing more of the good is

Intellectual property

A nation can produce at a point outside its PPF

-The table above lists six points on the production possibilities frontier for grain and cars. What is the opportunity cost of producing the 26th car?

Tom and Di grow tomatoes and turnips. Tom has a comparative advantage in growing tomatoes if ________.

-In the figure above, point A is undesirable because

As residents of developing countries increase their chocolate consumption, the increased production of cocoa results in

-In the figure above, suppose that Mac and Izzie trade and reach point c. Then

What Is Economics

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 2: The Economic Problem

Explain the difference between marginal cost and marginal benefit.

How do property rights help organize production and trade?

-Employees at Bank of America are good at providing banking services and workers at Ben & Jerry's are good at making ice cream. The figure above shows the marginal cost and marginal benefit curves for ice cream. If 1 million gallons of ice cream are being produced

Resource use is allocatively efficient if the

-In one day, Brandon can either plow 10 acres or plant 20 acres. In one day, Christopher can either plow 14 acres or plant 14 acres. Which of the following statements about comparative advantage is CORRECT?

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

In the United States, the government coordinates most of the economic activity.

Harry produces 2 balloon rides and 4 boat rides an hour. Harry could produce more balloon rides but to do so he must produce fewer boat rides. Harry is ________ his production possibilities frontier.

-The above table shows production points on Sweet-Tooth Land's production possibilities frontier. A movement from ________ represents the greatest opportunity cost of increasing cola production.

An expansion of the production possibilities frontier is

When the opportunity cost of producing more of a good is increasing, the marginal cost of producing more of the good is

Intellectual property

A nation can produce at a point outside its PPF

-The table above lists six points on the production possibilities frontier for grain and cars. What is the opportunity cost of producing the 26th car?

Tom and Di grow tomatoes and turnips. Tom has a comparative advantage in growing tomatoes if ________.

-In the figure above, point A is undesirable because

As residents of developing countries increase their chocolate consumption, the increased production of cocoa results in

-In the figure above, suppose that Mac and Izzie trade and reach point c. Then

What Is Economics

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters