Question 1

All of the following are economic resources, or factors of production EXCEPT

Accepted Answer

A)  land. 
B)  physical capital. 
C)  money. 
D)  entrepreneurship. 
A)  land. 
B)  physical capital. 
C)  money. 
D)  entrepreneurship.

Question 2

Which of the following is NOT considered to be an economic resource?

Accepted Answer

A)  your economics professor 
B)  the telephone company repair truck 
C)  the local gas station 
D)  a view of the stars on a clear night 
A)  your economics professor 
B)  the telephone company repair truck 
C)  the local gas station 
D)  a view of the stars on a clear night

Question 3

-Refer to the above figure. Which of the following points indicates an efficient use of resources?

Accepted Answer

A)  a 
B)  d 
C)  e 
D)  More information is needed to answer the question. 
A)  a 
B)  d 
C)  e 
D)  More information is needed to answer the question.

Question 4

Labor, human capital, and entrepreneurship are resources related to human beings. Distinguish among the three resources.

Accepted Answer

Labor is the work done by human beings.

Question 5

-Refer to the above figure. Which of the following points indicates an unobtainable point of production?

Accepted Answer

A)  a 
B)  d 
C)  e 
D)  More information is needed to answer the question. 
A)  a 
B)  d 
C)  e 
D)  More information is needed to answer the question.

Question 6

The president of the United States promises that the nation's economy will simultaneously produce more defense goods without any decreases in the production of other goods. Under which of the following conditions could such a promise be valid?

Accepted Answer

A)  If the United States were producing at a point on its production possibilities curve 
B)  If the United States were producing inside its production possibilities curve 
C)  If the United States were producing to the right of its production possibilities curve 
D)  None of the above; the production possibilities curve must shift to the right. 
A)  If the United States were producing at a point on its production possibilities curve 
B)  If the United States were producing inside its production possibilities curve 
C)  If the United States were producing to the right of its production possibilities curve 
D)  None of the above; the production possibilities curve must shift to the right.

Question 7

The opportunity cost of a decision is the

Accepted Answer

A)  value of the best alternative not chosen. 
B)  value of all the alternatives not chosen. 
C)  cost of making the wrong choice. 
D)  cost incurred by others who are unhappy with your decision. 
A)  value of the best alternative not chosen. 
B)  value of all the alternatives not chosen. 
C)  cost of making the wrong choice. 
D)  cost incurred by others who are unhappy with your decision.

Question 8

-Which of the following would NOT allow society to move to point "h" in the above figure?

Accepted Answer

A)  An improvement in technology 
B)  More efficient use of current resources 
C)  An increase in quantity of labor 
D)  An increase in quantity of capital 
A)  An improvement in technology 
B)  More efficient use of current resources 
C)  An increase in quantity of labor 
D)  An increase in quantity of capital

Question 9

Which of the following is NOT a factor of production?

Accepted Answer

A)  land 
B)  labor 
C)  a product 
D)  entrepreneurship 
A)  land 
B)  labor 
C)  a product 
D)  entrepreneurship

Question 10

-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 11

The above table shows the daily production possibilities for a bakery.
Currently the bakery bakes 60 pizzas and 180 loaves of bread, that is-it is at alternative C.
-Using the above table, moving from alternative C to alternative B, what is the opportunity cost of one loaf of bread?

Accepted Answer

A)  1 pizza pie 
B)  30 pizza pies 
C)  2 pizza pies 
D)  0.5 pizza pie 
A)  1 pizza pie 
B)  30 pizza pies 
C)  2 pizza pies 
D)  0.5 pizza pie

Question 12

Typically, the greater the specialization of resources,

Accepted Answer

A)  the less production that takes place. 
B)  the greater the bow of the production possibilities curve. 
C)  the poorer the country becomes. 
D)  the greater the unemployment in the country. 
A)  the less production that takes place. 
B)  the greater the bow of the production possibilities curve. 
C)  the poorer the country becomes. 
D)  the greater the unemployment in the country.

Question 13

Technology is

Accepted Answer

A)  society's pool of knowledge of how to produce goods and services. 
B)  a resource like land or physical capital. 
C)  computers and lasers. 
D)  not obtainable by engaging in activities that increase human capital. 
A)  society's pool of knowledge of how to produce goods and services. 
B)  a resource like land or physical capital. 
C)  computers and lasers. 
D)  not obtainable by engaging in activities that increase human capital.

Question 14

If a country's production possibilities curve gets more bowed out over time, it is an indication that

Accepted Answer

A)  technological change has taken place. 
B)  society is learning to use its resources more efficiently. 
C)  the quantity of labor and capital have increased. 
D)  resources have become more highly specialized. 
A)  technological change has taken place. 
B)  society is learning to use its resources more efficiently. 
C)  the quantity of labor and capital have increased. 
D)  resources have become more highly specialized.

Question 15

-Refer to the above figure. Assume that only two goods can be produced in the economy. Which of the following statements is true?

Accepted Answer

A)  Points a, b, and c are all obtainable points of production. 
B)  Points a and b are obtainable points of production. 
C)  Points b and c are obtainable points of production. 
D)  Only point b is an obtainable and efficient point of production. 
A)  Points a, b, and c are all obtainable points of production. 
B)  Points a and b are obtainable points of production. 
C)  Points b and c are obtainable points of production. 
D)  Only point b is an obtainable and efficient point of production.

Question 16

A country that must reduce current consumption to increase future consumption possibilities

Accepted Answer

A)  must be allocating resources inefficiently. 
B)  must be producing along the production possibilities curve. 
C)  must be producing outside the production possibilities curve. 
D)  must not have private ownership of property. 
A)  must be allocating resources inefficiently. 
B)  must be producing along the production possibilities curve. 
C)  must be producing outside the production possibilities curve. 
D)  must not have private ownership of property.

Question 17

The division of productive activities among persons and regions so that no one individual or area is totally self-sufficient is known as

Accepted Answer

A)  advantage-taking. 
B)  comparative value. 
C)  specialization. 
D)  outsourcing. 
A)  advantage-taking. 
B)  comparative value. 
C)  specialization. 
D)  outsourcing.

Question 18

The high opportunity cost of voting in the United States is due to

Accepted Answer

A)  the value of time devoted to casting a ballot. 
B)  the inability of candidates to differentiate themselves from one another. 
C)  the inability of the typical voter to change the election outcome by voting. 
D)  the confusion generated by the voting machines. 
A)  the value of time devoted to casting a ballot. 
B)  the inability of candidates to differentiate themselves from one another. 
C)  the inability of the typical voter to change the election outcome by voting. 
D)  the confusion generated by the voting machines.

Question 19

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 20

By going to school an individual will obtain which resource?

Accepted Answer

A)  Money 
B)  Physical capital 
C)  Knowledge 
D)  Human capital 
A)  Money 
B)  Physical capital 
C)  Knowledge 
D)  Human capital

Exam 2: Scarcity and the World of Trade-Offs

All of the following are economic resources, or factors of production EXCEPT

Which of the following is NOT considered to be an economic resource?

-Refer to the above figure. Which of the following points indicates an efficient use of resources?

Labor, human capital, and entrepreneurship are resources related to human beings. Distinguish among the three resources.

-Refer to the above figure. Which of the following points indicates an unobtainable point of production?

The president of the United States promises that the nation's economy will simultaneously produce more defense goods without any decreases in the production of other goods. Under which of the following conditions could such a promise be valid?

The opportunity cost of a decision is the

-Which of the following would NOT allow society to move to point "h" in the above figure?

Which of the following is NOT a factor of production?

-According to the above table, the opportunity cost of each additional computer in terms of televisions

The above table shows the daily production possibilities for a bakery. Currently the bakery bakes 60 pizzas and 180 loaves of bread, that is-it is at alternative C. -Using the above table, moving from alternative C to alternative B, what is the opportunity cost of one loaf of bread?

Typically, the greater the specialization of resources,

Technology is

If a country's production possibilities curve gets more bowed out over time, it is an indication that

-Refer to the above figure. Assume that only two goods can be produced in the economy. Which of the following statements is true?

A country that must reduce current consumption to increase future consumption possibilities

The division of productive activities among persons and regions so that no one individual or area is totally self-sufficient is known as

The high opportunity cost of voting in the United States is due to

Human capital is

By going to school an individual will obtain which 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

Measuring the Economys Performance

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

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters