Exam 1: The Challenge of Economics

Figure 1.1 - Production-possibilities curve -It is not possible for society to produce this combination with current resources and technology.Select the appropriate point.(See Figure 1.1)

Output choices are necessary within a market because of:

A linear curve can be distinguished by:

When a society is operating on the production possibilities curve,it is using its available resources efficiently in the production of goods and services.

Karl Marx encouraged a policy of laissez faire because he believed that the market mechanism provided society with the best answers to the WHAT,HOW,and FOR WHOM questions.

Ceteris paribus which of the following is likely to cause an outward shift of the production possibilities curve?

Table 1.1 - Production possibilities and opportunity costs of missiles and houses Table 1.1 shows the tradeoff between different combinations of missile production and home construction,ceteris paribus.Complete the table by calculating the required opportunity costs for both missiles and houses.Then answer the indicated question(s). -In Table 1.1,what is the opportunity cost of increasing the production of missiles from 2 to 3 in terms of houses?

The slope of a line is:

Figure 1.1 - Production Possibilities and Opportunity Costs: Linear Model versus Non-Linear Model In the linear production possibilities model,we assume each of five equally-sized parcels of land contributes the same to the production of food and timber: 6 units of timber or 3 units of food. By contrast,in the non-linear model,we will assume that there are five different types of land in equal-sized plots and that each plot may contribute as follows to the production of -Assuming all parcels of land are the same,there is a constant trade-off in the production of timber and food.When all land is in use,one more unit of food produced will require…

Which of the following best describes the "invisible hand?"

A "mixed economy" is one that relies solely on market signals to allocate goods and services.

When an economic choice is made,it is possible to avoid opportunity costs.

Which of the following is an example of a negative externality?

When a curve shifts,this indicates that:

Economic models:

Economics is the study of how to allocate scarce resources among competing uses.

Which of the following is NOT an example of investment?

Which of the following individuals is typically associated with a laissez faire economic policy?

Figure 1.2 - Relating grades and hours studied -In Figure 1.2,a grade-point average of 3.0 is associated with how many hours of study time per week?

Figure 1.1 - Production-possibilities curve -Society is producing some output,but some of the available resources are unemployed.Select the appropriate point.(See Figure 1.1)