Question 1

Production possibilities
  
-In the above table, the production of 3 pizzas and 35 cases of soda is

Accepted Answer

A)  impossible unless more resources become available. 
B)  feasible but would involve unemployed or misallocated resources. 
C)  possible only if the economy produces with maximum efficiency. 
D)  possible only if there is inflation. 
A)  impossible unless more resources become available. 
B)  feasible but would involve unemployed or misallocated resources. 
C)  possible only if the economy produces with maximum efficiency. 
D)  possible only if there is inflation.

Question 2

-In the above figure, which point represents an unattainable production combination of the two goods?

Accepted Answer

A)  point C 
B)  point L 
C)  point D 
D)  point N 
A)  point C 
B)  point L 
C)  point D 
D)  point N

Question 3

What economic concepts are represented in the production possibilities model?

Accepted Answer

There are a large number of economic con

Question 4

The country whose production possibilities frontier is illustrated above is currently at position A on the production possibilities frontier. If it wishes to move to position B, it will

Accepted Answer

A)  find this change impossible to achieve given the resources it currently possesses. 
B)  have to employ all currently unemployed resources to accomplish this. 
C)  incur an opportunity cost of having to give up some butter in order to make the additional amount of guns desired. 
D)  be able to make the desired switch only if there is a significant improvement in the technology available to the nation. 
A)  find this change impossible to achieve given the resources it currently possesses. 
B)  have to employ all currently unemployed resources to accomplish this. 
C)  incur an opportunity cost of having to give up some butter in order to make the additional amount of guns desired. 
D)  be able to make the desired switch only if there is a significant improvement in the technology available to the nation.

Question 5

What is comparative advantage? Give an example.

Accepted Answer

Comparative advantage is the ability of

Question 6

The existence of the tradeoff along the PPF means that the PPF is

Accepted Answer

A)  bowed outward. 
B)  linear. 
C)  negatively sloped. 
D)  positively sloped. 
A)  bowed outward. 
B)  linear. 
C)  negatively sloped. 
D)  positively sloped.

Question 7

In an eight-hour day, Andy can produce either 24 loaves of bread or 8 pounds of butter. In an eight-hour day, Bob can produce either 8 loaves of bread or 8 pounds of butter. Andy has a comparative advantage in the production of

Accepted Answer

A)  bread, while Bob has a comparative advantage in the production of butter. 
B)  butter, while Bob has a comparative advantage in the production of bread. 
C)  bread and neither has a comparative advantage in the production of butter. 
D)  both bread and butter. 
A)  bread, while Bob has a comparative advantage in the production of butter. 
B)  butter, while Bob has a comparative advantage in the production of bread. 
C)  bread and neither has a comparative advantage in the production of butter. 
D)  both bread and butter.

Question 8

Which of the following is TRUE regarding markets?
I.Economists define a market as a geographic location where trade occurs.
II.A market enables buyers and sellers to get information about each other and to buy and sell from each other.
III.Markets coordinate decisions through prices.

Accepted Answer

A)  I only 
B)  I and III 
C)  II and III 
D)  I, II and III 
A)  I only 
B)  I and III 
C)  II and III 
D)  I, II and III

Question 9

The production possibilities frontier bows outward because

Accepted Answer

A)  opportunity costs are decreasing as the production of a good increases. 
B)  opportunity costs are increasing as the production of a good increases. 
C)  opportunity costs are fixed as the production of a good increases. 
D)  resources are of uniform quality. 
A)  opportunity costs are decreasing as the production of a good increases. 
B)  opportunity costs are increasing as the production of a good increases. 
C)  opportunity costs are fixed as the production of a good increases. 
D)  resources are of uniform quality.

Question 10

Why does the marginal benefit curve have a negative slope?

Accepted Answer

Each successive increase in the consumpt

Question 11

We measure the marginal ________ of a good by what a ________ for another unit of the good.

Accepted Answer

A)  benefit; person must pay 
B)  cost; person is willing to pay 
C)  benefit; person is willing to pay 
D)  cost; person's preferences are 
A)  benefit; person must pay 
B)  cost; person is willing to pay 
C)  benefit; person is willing to pay 
D)  cost; person's preferences are

Question 12

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 13

A key factor that leads to economic growth is

Accepted Answer

A)  human capital accumulation. 
B)  increasing current consumption. 
C)  avoiding the opportunity cost of investment. 
D)  Both answers A and B are correct. 
A)  human capital accumulation. 
B)  increasing current consumption. 
C)  avoiding the opportunity cost of investment. 
D)  Both answers A and B are correct.

Question 14

-The above figure illustrates Mary's production possibilities frontier. Which of the following movements show opportunity costs increasing?

Accepted Answer

A)  point a to point b to point c 
B)  point a to point f 
C)  point f to point a 
D)  point c to point f to point d 
A)  point a to point b to point c 
B)  point a to point f 
C)  point f to point a 
D)  point c to point f to point d

Question 15

Sam's production possibilities frontier has good A on the horizontal axis and good B on the vertical axis. If Sam is producing at a point inside his frontier, then he

Accepted Answer

A)  can increase production of both goods with no increase in resources. 
B)  is fully using all his resources. 
C)  values good A more than good B. 
D)  values good B more than good A. 
A)  can increase production of both goods with no increase in resources. 
B)  is fully using all his resources. 
C)  values good A more than good B. 
D)  values good B more than good A.

Question 16

Both Mergatroid and the Geebocks produce only gizmos and widgets. It is possible for Mergatroid to have

Accepted Answer

A)  an absolute and a comparative advantage in both products. 
B)  an absolute but not a comparative advantage in both products. 
C)  a comparative but not an absolute advantage in both products. 
D)  neither a comparative nor an absolute advantage in both products. 
A)  an absolute and a comparative advantage in both products. 
B)  an absolute but not a comparative advantage in both products. 
C)  a comparative but not an absolute advantage in both products. 
D)  neither a comparative nor an absolute advantage in both products.

Question 17

A production possibilities frontier figure does NOT illustrate

Accepted Answer

A)  the limits on production imposed by our limited resources and technology. 
B)  the exchange of one good or service for another. 
C)  opportunity cost. 
D)  attainable and unattainable points. 
A)  the limits on production imposed by our limited resources and technology. 
B)  the exchange of one good or service for another. 
C)  opportunity cost. 
D)  attainable and unattainable points.

Question 18

-In the production possibilities frontier depicted in the figure above, what is the opportunity cost of increasing the production of bananas from two million pounds to three million pounds?

Accepted Answer

A)  1/2 hat per pound of bananas 
B)  1 hat per pound of bananas 
C)  2 hats per pound of bananas 
D)  3 hats per pound of bananas 
A)  1/2 hat per pound of bananas 
B)  1 hat per pound of bananas 
C)  2 hats per pound of bananas 
D)  3 hats per pound of bananas

Question 19

The tradeoff between current consumption and the production of capital goods also reflects a tradeoff between

Accepted Answer

A)  the future production of capital goods and future consumption of goods. 
B)  economic growth and technological change. 
C)  satisfying today the needs of the poor and the wants of the wealthy. 
D)  current consumption and future consumption. 
A)  the future production of capital goods and future consumption of goods. 
B)  economic growth and technological change. 
C)  satisfying today the needs of the poor and the wants of the wealthy. 
D)  current consumption and future consumption.

Question 20

According to the principle of comparative advantage, if a rich country trades with a poor country, then

Accepted Answer

A)  the rich country will benefit and the poor country will lose. 
B)  the rich country will lose and the poor country will benefit. 
C)  both countries will benefit. 
D)  neither of the countries will benefit. 
A)  the rich country will benefit and the poor country will lose. 
B)  the rich country will lose and the poor country will benefit. 
C)  both countries will benefit. 
D)  neither of the countries will benefit.

Production possibilities -In the above table, the production of 3 pizzas and 35 cases of soda is

-In the above figure, which point represents an unattainable production combination of the two goods?

What economic concepts are represented in the production possibilities model?

The country whose production possibilities frontier is illustrated above is currently at position A on the production possibilities frontier. If it wishes to move to position B, it will

What is comparative advantage? Give an example.

The existence of the tradeoff along the PPF means that the PPF is

In an eight-hour day, Andy can produce either 24 loaves of bread or 8 pounds of butter. In an eight-hour day, Bob can produce either 8 loaves of bread or 8 pounds of butter. Andy has a comparative advantage in the production of

Which of the following is TRUE regarding markets? I.Economists define a market as a geographic location where trade occurs. II.A market enables buyers and sellers to get information about each other and to buy and sell from each other. III.Markets coordinate decisions through prices.

The production possibilities frontier bows outward because

Why does the marginal benefit curve have a negative slope?

We measure the marginal of a good by what a for another unit of the good.

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

A key factor that leads to economic growth is

-The above figure illustrates Mary's production possibilities frontier. Which of the following movements show opportunity costs increasing?

Sam's production possibilities frontier has good A on the horizontal axis and good B on the vertical axis. If Sam is producing at a point inside his frontier, then he

Both Mergatroid and the Geebocks produce only gizmos and widgets. It is possible for Mergatroid to have

A production possibilities frontier figure does NOT illustrate

-In the production possibilities frontier depicted in the figure above, what is the opportunity cost of increasing the production of bananas from two million pounds to three million pounds?

The tradeoff between current consumption and the production of capital goods also reflects a tradeoff between

According to the principle of comparative advantage, if a rich country trades with a poor country, then

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

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 2: The Economic Problem

Production possibilities -In the above table, the production of 3 pizzas and 35 cases of soda is

-In the above figure, which point represents an unattainable production combination of the two goods?

What economic concepts are represented in the production possibilities model?

The country whose production possibilities frontier is illustrated above is currently at position A on the production possibilities frontier. If it wishes to move to position B, it will

What is comparative advantage? Give an example.

The existence of the tradeoff along the PPF means that the PPF is

In an eight-hour day, Andy can produce either 24 loaves of bread or 8 pounds of butter. In an eight-hour day, Bob can produce either 8 loaves of bread or 8 pounds of butter. Andy has a comparative advantage in the production of

Which of the following is TRUE regarding markets? I.Economists define a market as a geographic location where trade occurs. II.A market enables buyers and sellers to get information about each other and to buy and sell from each other. III.Markets coordinate decisions through prices.

The production possibilities frontier bows outward because

Why does the marginal benefit curve have a negative slope?

We measure the marginal ________ of a good by what a ________ for another unit of the good.

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

A key factor that leads to economic growth is

-The above figure illustrates Mary's production possibilities frontier. Which of the following movements show opportunity costs increasing?

Sam's production possibilities frontier has good A on the horizontal axis and good B on the vertical axis. If Sam is producing at a point inside his frontier, then he

Both Mergatroid and the Geebocks produce only gizmos and widgets. It is possible for Mergatroid to have

A production possibilities frontier figure does NOT illustrate

-In the production possibilities frontier depicted in the figure above, what is the opportunity cost of increasing the production of bananas from two million pounds to three million pounds?

The tradeoff between current consumption and the production of capital goods also reflects a tradeoff between

According to the principle of comparative advantage, if a rich country trades with a poor country, then

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

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

We measure the marginal of a good by what a for another unit of the good.