Question 1

Suppose Joe can prepare 20 sandwiches or 10 pizzas in an hour and Beth can produce 36 sandwiches or 27 pizzas. The concept of comparative advantage concludes that

Accepted Answer

A)  Beth should produce both goods because she can produce more of both goods in an hour than can Joe. 
B)  Beth should produce sandwiches and Joe should produce pizza. 
C)  Beth should produce pizza and Joe should produce sandwiches. 
D)  Beth should produce both goods and Joe should produce sandwiches. 
A)  Beth should produce both goods because she can produce more of both goods in an hour than can Joe. 
B)  Beth should produce sandwiches and Joe should produce pizza. 
C)  Beth should produce pizza and Joe should produce sandwiches. 
D)  Beth should produce both goods and Joe should produce sandwiches.

Question 2

When we cannot produce more of any good without giving up some other good that we value more highly, we have achieved

Accepted Answer

A)  production. 
B)  equity. 
C)  allocative efficiency. 
D)  the production point where the marginal benefit exceeds the marginal cost by as much as possible. 
A)  production. 
B)  equity. 
C)  allocative efficiency. 
D)  the production point where the marginal benefit exceeds the marginal cost by as much as possible.

Question 3

A country that has an absolute advantage in producing all goods will ________.

Accepted Answer

A)  have a comparative advantage in some goods but not all 
B)  produce all goods at lowest opportunity cost 
C)  have a comparative advantage in all goods 
D)  not gain from specialization and trade 
A)  have a comparative advantage in some goods but not all 
B)  produce all goods at lowest opportunity cost 
C)  have a comparative advantage in all goods 
D)  not gain from specialization and trade

Question 4

One of the largest categories of exports from the United States is now pop culture: movies, music, TV programming, and videos. A direct conclusion from this information is that, compared to other countries, the United States has

Accepted Answer

A)  lower wages for producers of pop culture. 
B)  higher wages for producers of pop culture. 
C)  an absolute advantage in producing pop culture. 
D)  a comparative advantage in producing pop culture. 
A)  lower wages for producers of pop culture. 
B)  higher wages for producers of pop culture. 
C)  an absolute advantage in producing pop culture. 
D)  a comparative advantage in producing pop culture.

Question 5

The production possibilities frontier is the boundary between

Accepted Answer

A)  those combinations of goods and services that can be produced and those that can be consumed. 
B)  those resources that are limited and those that are unlimited. 
C)  those combinations of goods and services that can be produced and those that cannot. 
D)  those wants that are limited and those that are unlimited. 
A)  those combinations of goods and services that can be produced and those that can be consumed. 
B)  those resources that are limited and those that are unlimited. 
C)  those combinations of goods and services that can be produced and those that cannot. 
D)  those wants that are limited and those that are unlimited.

Question 6

-Refer to the production possibilities frontier in the figure above. Which production point is unattainable?

Accepted Answer

A)  point a 
B)  point b 
C)  point c 
D)  point e 
A)  point a 
B)  point b 
C)  point c 
D)  point e

Question 7

We are using resources efficiently if we can produce more of one good without producing less of some other good that we value more highly.

Accepted Answer

A) True 
 B)False

Question 8

Economic growth can be represented by

Accepted Answer

A)  a movement down the production possibilities frontier (PPF). 
B)  a movement up the production possibilities frontier (PPF). 
C)  an inward shift of the production possibilities frontier (PPF). 
D)  an outward shift of the production possibilities frontier (PPF). 
A)  a movement down the production possibilities frontier (PPF). 
B)  a movement up the production possibilities frontier (PPF). 
C)  an inward shift of the production possibilities frontier (PPF). 
D)  an outward shift of the production possibilities frontier (PPF).

Question 9

-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. Point b represents ________ of banking services and ice cream.

Accepted Answer

A)  allocation efficiency and possibly production efficiency 
B)  neither allocative nor production efficiency 
C)  allocative and production efficiency in the production 
D)  production efficiency and possibly allocative efficiency in the production 
A)  allocation efficiency and possibly production efficiency 
B)  neither allocative nor production efficiency 
C)  allocative and production efficiency in the production 
D)  production efficiency and possibly allocative efficiency in the production

Question 10

-The data in the above table demonstrates that gains from trade can be captured if

Accepted Answer

A)  the United States produced both goods. 
B)  the United States produced steel in exchange for concrete produced in France. 
C)  the United States produced concrete in exchange for steel produced in France. 
D)  each country became self-sufficient, produced both goods for itself, and did not engage in trade. 
A)  the United States produced both goods. 
B)  the United States produced steel in exchange for concrete produced in France. 
C)  the United States produced concrete in exchange for steel produced in France. 
D)  each country became self-sufficient, produced both goods for itself, and did not engage in trade.

Question 11

The principle of increasing opportunity cost leads to

Accepted Answer

A)  a production possibilities frontier (PPF) that is bowed inward from the origin. 
B)  a production possibilities frontier (PPF) that is bowed outward from the origin. 
C)  an inward shift of the production possibilities frontier (PPF). 
D)  an outward shift of the production possibilities frontier (PPF). 
A)  a production possibilities frontier (PPF) that is bowed inward from the origin. 
B)  a production possibilities frontier (PPF) that is bowed outward from the origin. 
C)  an inward shift of the production possibilities frontier (PPF). 
D)  an outward shift of the production possibilities frontier (PPF).

Question 12

The rights of an owner to use and exchange property are

Accepted Answer

A)  capitalist rights. 
B)  socialist rights. 
C)  property rights. 
D)  money rights. 
A)  capitalist rights. 
B)  socialist rights. 
C)  property rights. 
D)  money rights.

Question 13

-In the figure above, Joe is producing at point A. Joe's opportunity cost of producing one shirt is

Accepted Answer

A)  5/3 of a pair of pants per shirt. 
B)  3/5 of a pair of pants per shirt. 
C)  5 pairs of pants per shirt. 
D)  2 pairs of pants per shirt. 
A)  5/3 of a pair of pants per shirt. 
B)  3/5 of a pair of pants per shirt. 
C)  5 pairs of pants per shirt. 
D)  2 pairs of pants per shirt.

Question 14

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

Accepted Answer

A)  Mac produces outside his production possibilities frontier. 
B)  Izzie produces outside her production possibilities frontier. 
C)  Mac and Izzie both produce outside their production possibilities frontiers. 
D)  neither Mac nor Izzie produce outside their production possibilities frontiers. 
A)  Mac produces outside his production possibilities frontier. 
B)  Izzie produces outside her production possibilities frontier. 
C)  Mac and Izzie both produce outside their production possibilities frontiers. 
D)  neither Mac nor Izzie produce outside their production possibilities frontiers.

Question 15

-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 3 million gallons of ice cream are produced, marginal cost ________ marginal benefit and ________ produced.

Accepted Answer

A)  exceeds; too much ice cream is 
B)  is less than; too much ice cream is 
C)  exceeds; not enough ice cream is 
D)  is less than; not enough banking services are 
A)  exceeds; too much ice cream is 
B)  is less than; too much ice cream is 
C)  exceeds; not enough ice cream is 
D)  is less than; not enough banking services are

Question 16

-Refer to the table above, which gives five points on a nation's PPF. As we increase the production of X,

Accepted Answer

A)  the output of Y increases. 
B)  unemployment increases. 
C)  the opportunity cost of each new unit of X increases. 
D)  the opportunity cost of each new unit of X decreases. 
A)  the output of Y increases. 
B)  unemployment increases. 
C)  the opportunity cost of each new unit of X increases. 
D)  the opportunity cost of each new unit of X decreases.

Question 17

If the marginal benefit of a good exceeds its marginal cost

Accepted Answer

A)  we've achieved efficient resource use. 
B)  we should produce more to achieve the allocatively efficient use of resources. 
C)  we should produce less to achieve the allocatively efficient use of resources. 
D)  we cannot tell if more or less should be produced to achieve the allocatively efficient use of resources. 
A)  we've achieved efficient resource use. 
B)  we should produce more to achieve the allocatively efficient use of resources. 
C)  we should produce less to achieve the allocatively efficient use of resources. 
D)  we cannot tell if more or less should be produced to achieve the allocatively efficient use of resources.

Question 18

-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 19

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 20

The idea of comparative advantage implies that people or countries

Accepted Answer

A)  should specialize in the production of goods. 
B)  can gain from trading. 
C)  can consume at a point outside their production possibilities frontier. 
D)  all of the above. 
A)  should specialize in the production of goods. 
B)  can gain from trading. 
C)  can consume at a point outside their production possibilities frontier. 
D)  all of the above.

Suppose Joe can prepare 20 sandwiches or 10 pizzas in an hour and Beth can produce 36 sandwiches or 27 pizzas. The concept of comparative advantage concludes that

When we cannot produce more of any good without giving up some other good that we value more highly, we have achieved

A country that has an absolute advantage in producing all goods will ________.

One of the largest categories of exports from the United States is now pop culture: movies, music, TV programming, and videos. A direct conclusion from this information is that, compared to other countries, the United States has

The production possibilities frontier is the boundary between

-Refer to the production possibilities frontier in the figure above. Which production point is unattainable?

We are using resources efficiently if we can produce more of one good without producing less of some other good that we value more highly.

Economic growth can be represented by

-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. Point b represents ________ of banking services and ice cream.

-The data in the above table demonstrates that gains from trade can be captured if

The principle of increasing opportunity cost leads to

The rights of an owner to use and exchange property are

-In the figure above, Joe is producing at point A. Joe's opportunity cost of producing one shirt is

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

-Refer to the table above, which gives five points on a nation's PPF. As we increase the production of X,

If the marginal benefit of a good exceeds its marginal cost

-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

Intellectual property

The idea of comparative advantage implies that people or countries

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

Suppose Joe can prepare 20 sandwiches or 10 pizzas in an hour and Beth can produce 36 sandwiches or 27 pizzas. The concept of comparative advantage concludes that

When we cannot produce more of any good without giving up some other good that we value more highly, we have achieved

A country that has an absolute advantage in producing all goods will ________.

One of the largest categories of exports from the United States is now pop culture: movies, music, TV programming, and videos. A direct conclusion from this information is that, compared to other countries, the United States has

The production possibilities frontier is the boundary between

-Refer to the production possibilities frontier in the figure above. Which production point is unattainable?

We are using resources efficiently if we can produce more of one good without producing less of some other good that we value more highly.

Economic growth can be represented by

-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. Point b represents ________ of banking services and ice cream.

-The data in the above table demonstrates that gains from trade can be captured if

The principle of increasing opportunity cost leads to

The rights of an owner to use and exchange property are

-In the figure above, Joe is producing at point A. Joe's opportunity cost of producing one shirt is

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

-Refer to the table above, which gives five points on a nation's PPF. As we increase the production of X,

If the marginal benefit of a good exceeds its marginal cost

-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

Intellectual property

The idea of comparative advantage implies that people or countries

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