Exam 1: The Challenge of Economics

The United States is a prosperous nation because its resources are sufficient to meet the desires of its citizens.

The most desirable attainable mix of output for society:

Ceteris paribus means:

Which of the following is most consistent with a market economy?

Figure 1.1 - Production-possibilities curve -Society is employing some of the available technology but not all of it.Select the appropriate point.(See Figure 1.1)

Which of the following is NOT a factor of production?

Ceteris paribus when technological change allows a smaller amount of a resource to be used in producing any combination of two goods,there will be:

Central planning is the principal method for making economic decisions in:

Opportunity cost may be defined as the:

A HEADLINE article in the text asks parents,"Do you expect your children's generation to enjoy a higher standard of living than your generation?" What is necessary for the standard of living to rise?

One HEADLINE article in the text suggests that most Americans do not trust the federal government to do the right thing.If they are correct,then government intervention results in:

A HEADLINE article in the text indicates that North Korea is running out of food.If North Korea is on its production possibilities curve and reduces its production of food so that it can increase the size of its military,this is most consistent with:

Microeconomics focuses on:

Figure 1.1 - Production-possibilities curve -Society is producing the maximum potential output,given its existing resources and technology.Select the appropriate point.(See Figure 1.1)

The FOR WHOM to produce question focuses on the distribution of output across the members of society.

The production possibilities curve shifts outward in response to:

The central problem of economics is the:

The opportunity cost of playing tennis with your friend is:

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,the opportunity cost of increasing the production of houses from 17,000 to 21,000 in terms of missiles per house is:

More resources and better technology shift the production possibilities curve inward.