Question 1

Scarcity implies that the allocation scheme chosen by society can

Accepted Answer

A) not make more of any one good. 
B) typically make more of a good but at the expense of making less of another. 
C) always make more of all goods simultaneously. 
A) not make more of any one good. 
B) typically make more of a good but at the expense of making less of another. 
C) always make more of all goods simultaneously.

Question 2

-Using Figure 1.7 we know the production of 4 units of soda and 2 units of pizza is

Accepted Answer

A) possible, but there would be unemployed resources. 
B) possible, but only if all resources were fully employed. 
C) impossible because we have the resources but do not have the technology. 
D) impossible because we have the technology but do not have the resources. 
A) possible, but there would be unemployed resources. 
B) possible, but only if all resources were fully employed. 
C) impossible because we have the resources but do not have the technology. 
D) impossible because we have the technology but do not have the resources.

Question 3

If the (steadily decreasing)marginal benefit of another day spent in the hospital exceeds the (steadily increasing)marginal cost of an additional day spent in the hospital, the rational consumer of hospital services would be predicted to

Accepted Answer

A) check out of the hospital immediately. 
B) stay in the hospital for at least that additional day. 
C) demand a refund from the hospital for the previous day's stay. 
D) complain about the hospital food. 
A) check out of the hospital immediately. 
B) stay in the hospital for at least that additional day. 
C) demand a refund from the hospital for the previous day's stay. 
D) complain about the hospital food.

Question 4

-Referring to Figure 1.4, the opportunity cost of producing the first unit of pizza is

Accepted Answer

A) one unit of soda. 
B) three units of soda. 
C) six units of soda. 
D) the same as the opportunity cost of producing the second unit of pizza. 
A) one unit of soda. 
B) three units of soda. 
C) six units of soda. 
D) the same as the opportunity cost of producing the second unit of pizza.

Question 5

-Using Figure 1.7 we know the production of 10 units of soda and 2 units of pizza is

Accepted Answer

A) possible, but there would be unemployed resources. 
B) possible, but only if all resources were fully employed. 
C) impossible because we either do not have the resources or the technology. 
D) undesirable. 
A) possible, but there would be unemployed resources. 
B) possible, but only if all resources were fully employed. 
C) impossible because we either do not have the resources or the technology. 
D) undesirable.

Question 6

-Using Figure 1.4 we know the production of 9 units of soda and 1 units of pizza is

Accepted Answer

A) possible, but there would be unemployment. 
B) possible, but only if all resources were fully employed. 
C) impossible because we have the resources but do not have the technology. 
D) impossible because we have the technology but do not have the resources. 
A) possible, but there would be unemployment. 
B) possible, but only if all resources were fully employed. 
C) impossible because we have the resources but do not have the technology. 
D) impossible because we have the technology but do not have the resources.

Question 7

-Referring to Figure 1.9, if a point is unattainable it is in

Accepted Answer

A) AREA #1 but not on the curve. 
B) AREA #1 or is on the curve. 
C) AREA #2 but not on the curve. 
D) AREA #2 or is on the curve. 
A) AREA #1 but not on the curve. 
B) AREA #1 or is on the curve. 
C) AREA #2 but not on the curve. 
D) AREA #2 or is on the curve.

Question 8

An economist, when analyzing a problem will attempt to

Accepted Answer

A) maximize the net benefit of an action and this occurs where the marginal benefit equals the marginal cost. 
B) maximize the total benefit of an action. 
C) minimize the total cost of an action. 
D) maximize the net benefit of an action and this occurs where the average benefit equals the average cost. 
A) maximize the net benefit of an action and this occurs where the marginal benefit equals the marginal cost. 
B) maximize the total benefit of an action. 
C) minimize the total cost of an action. 
D) maximize the net benefit of an action and this occurs where the average benefit equals the average cost.

Question 9

Imagine an economist ordering pizza by the slice. When deciding how many slices to order she would pick that number where the enjoyment of the _____ equals the enjoyment she could get from using the money on another good.

Accepted Answer

A) first slice 
B) last slice 
C) average slice 
D) total number of slices 
A) first slice 
B) last slice 
C) average slice 
D) total number of slices

Question 10

Generalized growth is typically the result of an increase in, or an increase in the ability of resources to

Accepted Answer

A) produce all goods 
B) produce certain goods 
C) produce exported goods 
D) compete with imported goods 
A) produce all goods 
B) produce certain goods 
C) produce exported goods 
D) compete with imported goods

Question 11

-In Figure 1.2, which labeled points represent the existence of unemployment?

Accepted Answer

A) only A 
B) only B and C 
C) only D 
D) A, B and C 
A) only A 
B) only B and C 
C) only D 
D) A, B and C

Question 12

-Referring to Figure 1.8, if a point represents unemployment it is in

Accepted Answer

A) AREA #1 but not on the curve. 
B) AREA #1 or is on the curve. 
C) AREA #2 but not on the curve. 
D) AREA #2 or is on the curve. 
A) AREA #1 but not on the curve. 
B) AREA #1 or is on the curve. 
C) AREA #2 but not on the curve. 
D) AREA #2 or is on the curve.

Question 13

The underlying reason that there are unattainable points on a production possibilities frontier diagram is that there

Accepted Answer

A) is government. 
B) are always choices that have to be made. 
C) is a scarcity of resources within a fixed level of technology. 
D) is unemployment of resources. 
A) is government. 
B) are always choices that have to be made. 
C) is a scarcity of resources within a fixed level of technology. 
D) is unemployment of resources.

Question 14

-Using Figure 1.6 you can tell that

Accepted Answer

A) the technology does not exist to produce 130 units of soda and 1 unit of pizza. 
B) there is unemployment. 
C) there is constant opportunity cost. 
D) the technology does not exist to produce 90 units of soda and 3 units of pizza. 
A) the technology does not exist to produce 130 units of soda and 1 unit of pizza. 
B) there is unemployment. 
C) there is constant opportunity cost. 
D) the technology does not exist to produce 90 units of soda and 3 units of pizza.

Question 15

Production possibilities frontier models

Accepted Answer

A) the choices we make in setting prices. 
B) the choices we make in setting output alternatives. 
C) the choices we make in setting wages. 
D) the choices we make in setting incomes. 
A) the choices we make in setting prices. 
B) the choices we make in setting output alternatives. 
C) the choices we make in setting wages. 
D) the choices we make in setting incomes.

Question 16

Figure 1.10 
-Referring to the Production Possibilities Frontiers in Figure 1.10 A, B, C, and D, which depicts specialized growth in soda when there is constant opportunity cost.

Accepted Answer

A) Fig. A 
B) Fig. B 
C) Fig. C 
D) Fig. D 
A) Fig. A 
B) Fig. B 
C) Fig. C 
D) Fig. D

Question 17

When analyzing a problem, if an economist is attempting to understand what caused something to happen without considering whether or not the action was fair or just, the economist is thinking

Accepted Answer

A) positively. 
B) negatively. 
C) normatively. 
D) justifiably. 
A) positively. 
B) negatively. 
C) normatively. 
D) justifiably.

Question 18

Figure 1.11  
-Referring to the Production Possibilities Frontiers in Figure 1.11 A and B, which depicts specialized growth

Accepted Answer

A) Fig. A 
B) Fig. B 
C) Either Fig. A or B is correct 
D) Neither Fig. A nor B are correct 
A) Fig. A 
B) Fig. B 
C) Either Fig. A or B is correct 
D) Neither Fig. A nor B are correct

Question 19

-In Figure 1.2, which labeled points are unattainable?

Accepted Answer

A) only A 
B) only B and C 
C) only D 
D) A, B and C 
A) only A 
B) only B and C 
C) only D 
D) A, B and C

Question 20

The statement that "since a farmer will make more money if he has a bumper crop means that all farmers would make more money if they all had bumper crops" would be an example of which of the following?

Accepted Answer

A) the fallacy that correlation is the same as causation 
B) the fallacy of composition 
C) truth in an obvious form 
D) none of the options are correct 
A) the fallacy that correlation is the same as causation 
B) the fallacy of composition 
C) truth in an obvious form 
D) none of the options are correct

Exam 1: Economics: the Study of Opportunity Cost

Scarcity implies that the allocation scheme chosen by society can

-Using Figure 1.7 we know the production of 4 units of soda and 2 units of pizza is

If the (steadily decreasing)marginal benefit of another day spent in the hospital exceeds the (steadily increasing)marginal cost of an additional day spent in the hospital, the rational consumer of hospital services would be predicted to

-Referring to Figure 1.4, the opportunity cost of producing the first unit of pizza is

-Using Figure 1.7 we know the production of 10 units of soda and 2 units of pizza is

-Using Figure 1.4 we know the production of 9 units of soda and 1 units of pizza is

-Referring to Figure 1.9, if a point is unattainable it is in

An economist, when analyzing a problem will attempt to

Imagine an economist ordering pizza by the slice. When deciding how many slices to order she would pick that number where the enjoyment of the _____ equals the enjoyment she could get from using the money on another good.

Generalized growth is typically the result of an increase in, or an increase in the ability of resources to

-In Figure 1.2, which labeled points represent the existence of unemployment?

-Referring to Figure 1.8, if a point represents unemployment it is in

The underlying reason that there are unattainable points on a production possibilities frontier diagram is that there

-Using Figure 1.6 you can tell that

Production possibilities frontier models

Figure 1.10 -Referring to the Production Possibilities Frontiers in Figure 1.10 A, B, C, and D, which depicts specialized growth in soda when there is constant opportunity cost.

When analyzing a problem, if an economist is attempting to understand what caused something to happen without considering whether or not the action was fair or just, the economist is thinking

Figure 1.11 -Referring to the Production Possibilities Frontiers in Figure 1.11 A and B, which depicts specialized growth

-In Figure 1.2, which labeled points are unattainable?

The statement that "since a farmer will make more money if he has a bumper crop means that all farmers would make more money if they all had bumper crops" would be an example of which of the following?

Supply and Demand

The Concept of Elasticity and Consumer and Producer Surplus

Firm Production, Cost, and Revenue

Perfect Competition, Monopoly, and Economic Versus Normal Profit

Every Macroeconomic Word You Ever Heard: Gross Domestic Product, Inflation, Unemployment, Recession, Depression

Interest Rates and Present Value

Aggregate Demand and Aggregate Supply

Fiscal Policy

Monetary Policy

Federal Spending

Federal Deficits, Surpluses, and the National Debt

The Housing Bubble

The Recession of 2007-2009: Causes and Policy Responses

Is Economic Stagnation the New Normal

Is the Fiscalsky Falling: An Examination of Unfunded Social Security, Medicare, and State and Local Pension Liabilities

International Trade: Does It Jeopardize American Jobs

International Finance and Exchange Rates

The European Debt Crisis

Economic Growth and Development

Nafta, Gatt, Wto: Are Trade Agreements Good for Us

The Line Between Legal and Illegal Goods

Natural Resources, the Environment, and Climate Change

Health Care

Government-Provided Health Insurance: Medicaid, Medicare, and the Child Health Insurance Program

The Economics of Prescription Drugs

So You Want to Be a Lawyer: Economics and the Law

The Economics of Crime

Antitrust

The Economics of Race and Discrimination

Income and Wealth Inequality

Farm Policy

Minimum Wage

Ticket Brokers and Ticket Scalping

Rent Control

Economics of K-12 Education

Economics of College and University Education

Poverty and Welfare

Head Start

Social Security

Personal Income Taxes

Energy Prices

If We Build It, Will They Come and Other Sports Questions

The Stock Market Crashes

Unions

Walmart: Always Low Prices and Low Wages- Always

The Economic Impact of Casino Gambling

The Economics of Terrorism

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