Question 1

Allocative efficiency is achieved when

Accepted Answer

A) a point beyond the production possibilities curve is reached. 
B) technological change occurs. 
C) the economy is producing on its production possibilities curve. 
D) the maximum amounts of the most desired goods and services are being produced. 
A) a point beyond the production possibilities curve is reached. 
B) technological change occurs. 
C) the economy is producing on its production possibilities curve. 
D) the maximum amounts of the most desired goods and services are being produced.

Question 2

Figure 2-3
Tonnes
of
Soybeans  
-A farmer has 100 hectares of land on which he can grow either soybeans or corn.A hectare of land yields 200 tonnes of soybeans or 100 tonnes of corn.Figure 2-3 shows the farmer's

Accepted Answer

A) trade-off curve. 
B) opportunity cost curve. 
C) substitution options curve. 
D) production possibilities curve. 
A) trade-off curve. 
B) opportunity cost curve. 
C) substitution options curve. 
D) production possibilities curve.

Question 3

Figure 2-4  
-In Figure 2-4,which of the following points indicates a productively inefficient use of resources?

Accepted Answer

A) f 
B) g 
C) a 
D) h 
A) f 
B) g 
C) a 
D) h

Question 4

The "invisible hand" refers to

Accepted Answer

A) the ways in which self-interested behaviour of buyers and sellers determines what is produced. 
B) the influence of government on market outcomes. 
C) the ways in which technology determines how goods and services are produced. 
D) money. 
A) the ways in which self-interested behaviour of buyers and sellers determines what is produced. 
B) the influence of government on market outcomes. 
C) the ways in which technology determines how goods and services are produced. 
D) money.

Question 5

One distinguishing feature between capitalist countries and non-capitalist countries is that

Accepted Answer

A) capitalist countries have private property rights and non-capitalist countries do not. 
B) non-capitalist countries have private property rights and capitalist countries do not. 
C) capitalist countries do not provide profit incentives while non-capitalist countries do. 
D) capitalist countries do not allow prices to seek their own level,while non-capitalist countries do. 
A) capitalist countries have private property rights and non-capitalist countries do not. 
B) non-capitalist countries have private property rights and capitalist countries do not. 
C) capitalist countries do not provide profit incentives while non-capitalist countries do. 
D) capitalist countries do not allow prices to seek their own level,while non-capitalist countries do.

Question 6

A price system is an economic system in which

Accepted Answer

A) resource allocation is decided by bureaucrats. 
B) commands from government planners are used to answer the three basic economic questions. 
C) prices for all basic commodities are set by federal mandate. 
D) prices change to reflect changes in supply and demand for different commodities. 
A) resource allocation is decided by bureaucrats. 
B) commands from government planners are used to answer the three basic economic questions. 
C) prices for all basic commodities are set by federal mandate. 
D) prices change to reflect changes in supply and demand for different commodities.

Question 7

Figure 2-2  
-In Table 2-1,if the economy moves from point F to point D,________ televisions are gained at a cost of ________ computers given up.

Accepted Answer

The answer of Figure 2-2  
-In Table 2-1,if the...

Question 8

Another name for a capitalist economy is a

Accepted Answer

A) socialist economy. 
B) market economy. 
C) communist economy. 
D) fascist economy. 
A) socialist economy. 
B) market economy. 
C) communist economy. 
D) fascist economy.

Question 9

If a country increases the production of its capital goods,then

Accepted Answer

A) the more consumption of goods it can have today. 
B) the less consumption it can have today,but the more it can have in future. 
C) the more unemployed resources there will be in the future. 
D) the more unemployed resources there are today. 
A) the more consumption of goods it can have today. 
B) the less consumption it can have today,but the more it can have in future. 
C) the more unemployed resources there will be in the future. 
D) the more unemployed resources there are today.

Question 10

Increasing relative costs are the result of

Accepted Answer

A) high taxes. 
B) increasing scarcity. 
C) the fact that resources are not perfectly adaptable for alternative uses. 
D) the fact that the more society produces,the more difficult it is to use resources efficiently. 
A) high taxes. 
B) increasing scarcity. 
C) the fact that resources are not perfectly adaptable for alternative uses. 
D) the fact that the more society produces,the more difficult it is to use resources efficiently.

Question 11

The fact that a country's production possibilities curve bows outward tells us that

Accepted Answer

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

Question 12

Which of the following would cause an economy to produce at a point inside its PPC?

Accepted Answer

A) population growth 
B) the efficient allocation of all factors of production 
C) unemployment or inefficient use of available resources 
D) capital accumulation 
A) population growth 
B) the efficient allocation of all factors of production 
C) unemployment or inefficient use of available resources 
D) capital accumulation

Question 13

The circular flow diagram shows that

Accepted Answer

A) firms are more important than consumers in determining what goods and services get produced. 
B) the interaction of consumers and producers determines what goods and services get produced. 
C) consumers are more important than firms in determining what goods and services get produced. 
D) the best form of economic organization is laissez-faire. 
A) firms are more important than consumers in determining what goods and services get produced. 
B) the interaction of consumers and producers determines what goods and services get produced. 
C) consumers are more important than firms in determining what goods and services get produced. 
D) the best form of economic organization is laissez-faire.

Question 14

Explain the difference between comparative advantage and absolute advantage.

Accepted Answer

Absolute advantage refers to the ability

Question 15

Figure 2-1  
-In Figure 2-1,the opportunity cost of moving from point B to point C

Accepted Answer

A) is the increase in output in the education sector. 
B) is the loss in production in the health care sector. 
C) is zero. 
D) is the loss in production in the education sector. 
A) is the increase in output in the education sector. 
B) is the loss in production in the health care sector. 
C) is zero. 
D) is the loss in production in the education sector.

Question 16

Figure 2-1  
-In Figure 2-1,point D shows

Accepted Answer

A) the use of all resources to produce Health Care. 
B) using some resources to produce Education and some to produce Health Care. 
C) the use of all resources to produce Education. 
D) some unemployed resources. 
A) the use of all resources to produce Health Care. 
B) using some resources to produce Education and some to produce Health Care. 
C) the use of all resources to produce Education. 
D) some unemployed resources.

Question 17

Figure 2-1  
-In Figure 2-1,at point D,resource use is

Accepted Answer

A) less efficient than at point C. 
B) more efficient than t point B. 
C) less efficient than at point B. 
D) more efficient than at point A. 
A) less efficient than at point C. 
B) more efficient than t point B. 
C) less efficient than at point B. 
D) more efficient than at point A.

Question 18

A society currently operating on its production possibilities curve is

Accepted Answer

A) technologically inefficient. 
B) consuming too much output. 
C) fully utilizing its productive resources. 
D) under-utilizing its resources. 
A) technologically inefficient. 
B) consuming too much output. 
C) fully utilizing its productive resources. 
D) under-utilizing its resources.

Question 19

Figure 2-3
Tonnes
of
Soybeans  
-Given Figure 2-3 as the PPC for a particular farmer,if the farm is producing 7,000 tonnes of soybeans at point b,we know that

Accepted Answer

A) the farmer must be using only 75 hectares of his land. 
B) the farmer must have leased an additional 25 hectares of land. 
C) the farmer must be producing 5000 tonnes of corn. 
D) if the farmer were using his resources efficiently,he could be producing 6500 tonnes of corn. 
A) the farmer must be using only 75 hectares of his land. 
B) the farmer must have leased an additional 25 hectares of land. 
C) the farmer must be producing 5000 tonnes of corn. 
D) if the farmer were using his resources efficiently,he could be producing 6500 tonnes of corn.

Question 20

Specialization according to the principle of comparative advantage

Accepted Answer

A) shifts outward the world's PPC. 
B) benefits productive countries but harms less productive ones. 
C) benefits less productive countries and harms more productive ones. 
D) moves the world closer to its PPC. 
A) shifts outward the world's PPC. 
B) benefits productive countries but harms less productive ones. 
C) benefits less productive countries and harms more productive ones. 
D) moves the world closer to its PPC.

Allocative efficiency is achieved when

Figure 2-3 Tonnes of Soybeans -A farmer has 100 hectares of land on which he can grow either soybeans or corn.A hectare of land yields 200 tonnes of soybeans or 100 tonnes of corn.Figure 2-3 shows the farmer's

Figure 2-4 -In Figure 2-4,which of the following points indicates a productively inefficient use of resources?

The "invisible hand" refers to

One distinguishing feature between capitalist countries and non-capitalist countries is that

A price system is an economic system in which

Figure 2-2 -In Table 2-1,if the economy moves from point F to point D, televisions are gained at a cost of computers given up.

Another name for a capitalist economy is a

If a country increases the production of its capital goods,then

Increasing relative costs are the result of

The fact that a country's production possibilities curve bows outward tells us that

Which of the following would cause an economy to produce at a point inside its PPC?

The circular flow diagram shows that

Explain the difference between comparative advantage and absolute advantage.

Figure 2-1 -In Figure 2-1,the opportunity cost of moving from point B to point C

Figure 2-1 -In Figure 2-1,point D shows

Figure 2-1 -In Figure 2-1,at point D,resource use is

A society currently operating on its production possibilities curve is

Figure 2-3 Tonnes of Soybeans -Given Figure 2-3 as the PPC for a particular farmer,if the farm is producing 7,000 tonnes of soybeans at point b,we know that

Specialization according to the principle of comparative advantage

The Nature of Economics

Demand and Supply

Introduction to Macroeconomics

Measuring the Economys Performance

Modelling Real Gdp and the Price Level in the Long Run

Economic Growth and Development

Modelling Real Gdp and the Price Level in the Short Run

Consumption, investment, and the Multiplier

The Public Sector

Fiscal Policy and the Public Debt

Money and the Banking System

Money Creation and Deposit Insurance

The Bank of Canada and Monetary Policy

Issues in Stabilization Policy

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters

Exam 2: Production Possibilities and Economic Systems

Allocative efficiency is achieved when

Figure 2-3 Tonnes of Soybeans -A farmer has 100 hectares of land on which he can grow either soybeans or corn.A hectare of land yields 200 tonnes of soybeans or 100 tonnes of corn.Figure 2-3 shows the farmer's

Figure 2-4 -In Figure 2-4,which of the following points indicates a productively inefficient use of resources?

The "invisible hand" refers to

One distinguishing feature between capitalist countries and non-capitalist countries is that

A price system is an economic system in which

Figure 2-2 -In Table 2-1,if the economy moves from point F to point D,________ televisions are gained at a cost of ________ computers given up.

Another name for a capitalist economy is a

If a country increases the production of its capital goods,then

Increasing relative costs are the result of

The fact that a country's production possibilities curve bows outward tells us that

Which of the following would cause an economy to produce at a point inside its PPC?

The circular flow diagram shows that

Explain the difference between comparative advantage and absolute advantage.

Figure 2-1 -In Figure 2-1,the opportunity cost of moving from point B to point C

Figure 2-1 -In Figure 2-1,point D shows

Figure 2-1 -In Figure 2-1,at point D,resource use is

A society currently operating on its production possibilities curve is

Figure 2-3 Tonnes of Soybeans -Given Figure 2-3 as the PPC for a particular farmer,if the farm is producing 7,000 tonnes of soybeans at point b,we know that

Specialization according to the principle of comparative advantage

The Nature of Economics

Demand and Supply

Introduction to Macroeconomics

Measuring the Economys Performance

Modelling Real Gdp and the Price Level in the Long Run

Economic Growth and Development

Modelling Real Gdp and the Price Level in the Short Run

Consumption, investment, and the Multiplier

The Public Sector

Fiscal Policy and the Public Debt

Money and the Banking System

Money Creation and Deposit Insurance

The Bank of Canada and Monetary Policy

Issues in Stabilization Policy

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters

Figure 2-2 -In Table 2-1,if the economy moves from point F to point D, televisions are gained at a cost of computers given up.