Question 1

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 2

-In the above figure, which of the following points indicates the efficient use of resources?

Accepted Answer

A)  a 
B)  f 
C)  g 
D)  h 
A)  a 
B)  f 
C)  g 
D)  h

Question 3

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, what is the opportunity cost of moving from alternative C to alternative D?

Accepted Answer

A)  60 loaves of bread 
B)  2 loaves of bread 
C)  30 loaves of bread 
D)  1/2 loaf of bread 
A)  60 loaves of bread 
B)  2 loaves of bread 
C)  30 loaves of bread 
D)  1/2 loaf of bread

Question 4

Briefly explain how specialization and trade can benefit nations.

Accepted Answer

When nations specialize in what they hav

Question 5

An outward bowed production possibilities curve illustrates

Accepted Answer

A)  inefficient production. 
B)  the law of increasing additional cost. 
C)  a lack of scarcity. 
D)  zero opportunity cost of moving from inefficient production to currently unobtainable production. 
A)  inefficient production. 
B)  the law of increasing additional cost. 
C)  a lack of scarcity. 
D)  zero opportunity cost of moving from inefficient production to currently unobtainable production.

Question 6

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 7

Jane is a top-level executive and is very rich. Jane just ordered a car only to be told that she will have to wait three weeks for it to be delivered. Which of the following statements is true?

Accepted Answer

A)  The car is not a scarce good. 
B)  The car is a scarce good. 
C)  Because Jane has unlimited funds, she incurs no opportunity cost in buying the car. 
D)  Jane paid too much for a car that wasn't ready on time. 
A)  The car is not a scarce good. 
B)  The car is a scarce good. 
C)  Because Jane has unlimited funds, she incurs no opportunity cost in buying the car. 
D)  Jane paid too much for a car that wasn't ready on time.

Question 8

-In the above figure, how many bushels of corn are produced at point "a"?

Accepted Answer

A)  10,000 
B)  2,500 
C)  1,000 
D)  0 
A)  10,000 
B)  2,500 
C)  1,000 
D)  0

Question 9

One opportunity cost associated with going to college is

Accepted Answer

A)  purchasing text books. 
B)  paying tuition. 
C)  giving up employment possibilities while in college. 
D)  paying for room, board, and other living expenses. 
A)  purchasing text books. 
B)  paying tuition. 
C)  giving up employment possibilities while in college. 
D)  paying for room, board, and other living expenses.

Question 10

All of the following are assumptions of the production possibilities curve EXCEPT

Accepted Answer

A)  resources are fully employed. 
B)  there is a fixed time period. 
C)  there is a fixed level of technology. 
D)  there is a fixed demand for the products. 
A)  resources are fully employed. 
B)  there is a fixed time period. 
C)  there is a fixed level of technology. 
D)  there is a fixed demand for the products.

Question 11

-Refer to the above figure. A farmer has 50 acres of land on which to grow wheat or beans. An acre of land yields 400 bushels of beans or 800 bushels of wheat. Which of the following is a possible combination of beans and wheat that can be grown, assuming the land is farmed efficiently?

Accepted Answer

A)  30,000 bushels of each 
B)  15,000 bushels of beans and 10,000 bushels of wheat 
C)  25,000 bushels of beans and 25,000 bushels of wheat 
D)  20,000 bushels of beans and 40,000 bushels of wheat 
A)  30,000 bushels of each 
B)  15,000 bushels of beans and 10,000 bushels of wheat 
C)  25,000 bushels of beans and 25,000 bushels of wheat 
D)  20,000 bushels of beans and 40,000 bushels of wheat

Question 12

What happens to overall living standards when countries trade with other countries?

Accepted Answer

When countries specialize in producing g

Question 13

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

Accepted Answer

A)  Panel A does not represent an economy that is producing efficiently while Panel B does. 
B)  Panel A represents an economy that has a lower level of technology than Panel B. 
C)  Opportunity costs do not apply to Panel A but apply to Panel B. 
D)  In Panel A, equal amounts of Y must be given up to obtain equal increments of X while in Panel B increasingly greater amounts of Y must be given up to obtain equal increments of X. 
A)  Panel A does not represent an economy that is producing efficiently while Panel B does. 
B)  Panel A represents an economy that has a lower level of technology than Panel B. 
C)  Opportunity costs do not apply to Panel A but apply to Panel B. 
D)  In Panel A, equal amounts of Y must be given up to obtain equal increments of X while in Panel B increasingly greater amounts of Y must be given up to obtain equal increments of X.

Question 14

Comparative advantage is always a(n) ________ concept.

Accepted Answer

A)  absolute 
B)  efficiency 
C)  relative 
D)  monetary 
A)  absolute 
B)  efficiency 
C)  relative 
D)  monetary

Question 15

The saying that "You cannot have your cake and eat it too" illustrates the economic concept of

Accepted Answer

A)  a positive statement. 
B)  a normative statement. 
C)  physical capital. 
D)  opportunity cost. 
A)  a positive statement. 
B)  a normative statement. 
C)  physical capital. 
D)  opportunity cost.

Question 16

Fred and Ann both decide to see the same movie when they are given free movie tickets. We know that

Accepted Answer

A)  both bear an opportunity cost since they could have done other things instead of see the movie. 
B)  both bear the same opportunity cost since they are doing the same thing. 
C)  the cost of going to the movie is greater for the one who had more choices to do other things. 
D)  neither bears an opportunity cost because the tickets were free. 
A)  both bear an opportunity cost since they could have done other things instead of see the movie. 
B)  both bear the same opportunity cost since they are doing the same thing. 
C)  the cost of going to the movie is greater for the one who had more choices to do other things. 
D)  neither bears an opportunity cost because the tickets were free.

Question 17

Division of labor means that

Accepted Answer

A)  the labor market in the United States is geographically segmented. 
B)  some employees join labor unions and others do not. 
C)  management and labor are always in conflict. 
D)  the production process is divided into smaller tasks. 
A)  the labor market in the United States is geographically segmented. 
B)  some employees join labor unions and others do not. 
C)  management and labor are always in conflict. 
D)  the production process is divided into smaller tasks.

Question 18

-Refer to the above figure. Which of the following points indicates an inefficient 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 19

-Refer to the above figure. How do you describe what is happening as the economy moves from point A to point C?

Accepted Answer

A)  The economy has acquired new resources that are well suited for producing bread. 
B)  Land that was once used to graze sheep is now being used to grow wheat. 
C)  Resources are becoming unemployed. 
D)  The technology for growing wheat has improved. 
A)  The economy has acquired new resources that are well suited for producing bread. 
B)  Land that was once used to graze sheep is now being used to grow wheat. 
C)  Resources are becoming unemployed. 
D)  The technology for growing wheat has improved.

Question 20

The accumulated training and education that you have is

Accepted Answer

A)  physical capital. 
B)  entrepreneurship. 
C)  economic goods. 
D)  human capital. 
A)  physical capital. 
B)  entrepreneurship. 
C)  economic goods. 
D)  human capital.

Exam 2: Scarcity and the World of Trade-Offs

All of the following are resources EXCEPT

-In the above figure, which of the following points indicates the efficient use of resources?

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, what is the opportunity cost of moving from alternative C to alternative D?

Briefly explain how specialization and trade can benefit nations.

An outward bowed production possibilities curve illustrates

Which of the following is TRUE about comparative advantage?

Jane is a top-level executive and is very rich. Jane just ordered a car only to be told that she will have to wait three weeks for it to be delivered. Which of the following statements is true?

-In the above figure, how many bushels of corn are produced at point "a"?

One opportunity cost associated with going to college is

All of the following are assumptions of the production possibilities curve EXCEPT

-Refer to the above figure. A farmer has 50 acres of land on which to grow wheat or beans. An acre of land yields 400 bushels of beans or 800 bushels of wheat. Which of the following is a possible combination of beans and wheat that can be grown, assuming the land is farmed efficiently?

What happens to overall living standards when countries trade with other countries?

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

Comparative advantage is always a(n) ________ concept.

The saying that "You cannot have your cake and eat it too" illustrates the economic concept of

Fred and Ann both decide to see the same movie when they are given free movie tickets. We know that

Division of labor means that

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

-Refer to the above figure. How do you describe what is happening as the economy moves from point A to point C?

The accumulated training and education that you have is

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