Question 1

Exhibit 2-10        
-Refer to Exhibit 2-10.Which of the graphs best illustrates the impact on the production possibilities frontier of a decrease in unemployment?

Accepted Answer

A) a 
B) b 
C) c 
D) d 
E) a,b and c 
A) a 
B) b 
C) c 
D) d 
E) a,b and c

Question 2

Exhibit 2-12 Maria and Hans Production Possibilities for Laundry and Typing  
-According to Exhibit 2-12,if Maria does one fewer load of laundry,how many pages can she type in the time saved on laundry?

Accepted Answer

A) 4 pages 
B) 6 pages 
C) 2/3 of a page 
D) 3/2 of a page 
E) it cannot be determined 
A) 4 pages 
B) 6 pages 
C) 2/3 of a page 
D) 3/2 of a page 
E) it cannot be determined

Question 3

An outward shift of the production possibilities frontier

Accepted Answer

A) reflects economic stability 
B) reflects economic growth 
C) reflects economic decline 
D) does not relate to the state of the economy 
E) is always a parallel shift 
A) reflects economic stability 
B) reflects economic growth 
C) reflects economic decline 
D) does not relate to the state of the economy 
E) is always a parallel shift

Question 4

Which economic concept does the expression "time is money" reflect?

Accepted Answer

A) opportunity cost 
B) specialization 
C) market exchange 
D) comparative advantage 
E) efficiency 
A) opportunity cost 
B) specialization 
C) market exchange 
D) comparative advantage 
E) efficiency

Question 5

If all resources are used efficiently to produce goods and services,a nation will find itself producing

Accepted Answer

A) inside its production possibilities frontier 
B) somewhere on its production possibilities frontier 
C) outside of its production possibilities frontier 
D) at one extreme end of its production possibilities frontier 
E) more of one product with no decrease in the production of any other product 
A) inside its production possibilities frontier 
B) somewhere on its production possibilities frontier 
C) outside of its production possibilities frontier 
D) at one extreme end of its production possibilities frontier 
E) more of one product with no decrease in the production of any other product

Question 6

The production possibilities frontier represents all desirable combinations of two goods

Accepted Answer

A) True 
 B)False

Question 7

The Sultan of Brunei,one of the world's richest people,does not face the problem of scarcity.

Accepted Answer

A) True 
 B)False

Question 8

A mixed capitalist economy is one in which

Accepted Answer

A) decisions are based primarily on religion or custom 
B) all resources are publicly owned and economic planning is centralized 
C) all resources are privately owned and prices are used to coordinate economic activity 
D) resources are both publicly and privately owned and some markets are regulated 
E) all resources are publicly owned and prices are used to coordinate economic activity 
A) decisions are based primarily on religion or custom 
B) all resources are publicly owned and economic planning is centralized 
C) all resources are privately owned and prices are used to coordinate economic activity 
D) resources are both publicly and privately owned and some markets are regulated 
E) all resources are publicly owned and prices are used to coordinate economic activity

Question 9

Exhibit 2-1 John and Harry's Production Possibilities for Ironing Shirts and Typing Papers  
-Exhibit 2-1 shows the production possibilities for ironing shirts and typing papers for John and Harry.Each has 5 hours per week to spend on these tasks.Which of the following statements is correct?

Accepted Answer

A) John has a comparative advantage in ironing. 
B) John has a comparative advantage in typing. 
C) John has an absolute advantage in typing. 
D) John has a comparative advantage in both ironing and typing. 
E) Neither can gain from specialization and exchange. 
A) John has a comparative advantage in ironing. 
B) John has a comparative advantage in typing. 
C) John has an absolute advantage in typing. 
D) John has a comparative advantage in both ironing and typing. 
E) Neither can gain from specialization and exchange.

Question 10

The division of labor

Accepted Answer

A) allows more people to be employed 
B) allows tasks to be performed more efficiently 
C) makes people happier on the job 
D) means that less management is required 
E) means that less equipment will be used 
A) allows more people to be employed 
B) allows tasks to be performed more efficiently 
C) makes people happier on the job 
D) means that less management is required 
E) means that less equipment will be used

Question 11

If the production possibilities frontier is a straight line,

Accepted Answer

A) its slope will equal -1 
B) resources must not be used efficiently 
C) resources must be unemployed 
D) society must not be using the latest technology 
E) resources must be equally adaptable at producing either product 
A) its slope will equal -1 
B) resources must not be used efficiently 
C) resources must be unemployed 
D) society must not be using the latest technology 
E) resources must be equally adaptable at producing either product

Question 12

Exhibit 2-6  
-In moving from point f to point g in Exhibit 2-6,the

Accepted Answer

A) production of B increases without a change in the production of A 
B) production of A increases without a change in the production of B 
C) production of both A and B increase 
D) production of both A and B decrease 
E) production of B increases and production of A decreases 
A) production of B increases without a change in the production of A 
B) production of A increases without a change in the production of B 
C) production of both A and B increase 
D) production of both A and B decrease 
E) production of B increases and production of A decreases

Question 13

When faced with a choice,a person assesses alternatives as long as the expected marginal __________ of gathering more information about the person's opinions __________ the expected marginal __________.

Accepted Answer

A) benefit,is less than,cost 
B) cost,exceeds,benefit 
C) benefit,exceeds,cost 
D) benefit,is greater than,benefit 
E) cost,is greater than,benefit 
A) benefit,is less than,cost 
B) cost,exceeds,benefit 
C) benefit,exceeds,cost 
D) benefit,is greater than,benefit 
E) cost,is greater than,benefit

Question 14

Exhibit 2-4
 
-In Exhibit 2-4,if resources are used fully and efficiently,then the economy can produce at point(s)

Accepted Answer

A) f 
B) h,d,or e 
C) a,b,or c 
D) d or e 
E) g,h,or i 
A) f 
B) h,d,or e 
C) a,b,or c 
D) d or e 
E) g,h,or i

Question 15

Which of the following would shift the production possibilities frontier outward?

Accepted Answer

A) an increase in the size of the labor force 
B) more efficient use of existing resources and technology 
C) the government prints more money 
D) the end of a strike by a labor union 
E) society's desire to produce more of one of the goods 
A) an increase in the size of the labor force 
B) more efficient use of existing resources and technology 
C) the government prints more money 
D) the end of a strike by a labor union 
E) society's desire to produce more of one of the goods

Question 16

A point inside the production possibilities curve illustrates a situation in which resources are not fully employed

Accepted Answer

A) True 
 B)False

Question 17

The law of increasing opportunity cost reflects the fact that

Accepted Answer

A) the production possibilities frontier is bowed inward 
B) resources are not perfectly substitutable 
C) resources cannot always be used efficiently 
D) an economy will operate at a point inside the production possibilities frontier 
E) an economy will operate at a point along the production possibilities frontier 
A) the production possibilities frontier is bowed inward 
B) resources are not perfectly substitutable 
C) resources cannot always be used efficiently 
D) an economy will operate at a point inside the production possibilities frontier 
E) an economy will operate at a point along the production possibilities frontier

Question 18

It is possible for one person to have a comparative advantage in the production of all products?

Accepted Answer

A) True 
 B)False

Question 19

Exhibit 2-10        
-Refer to Exhibit 2-10.Which of the graphs best illustrates the impact on the production possibilities frontier of a technological improvement that will make the resources used to produce consumer goods more efficient?

Accepted Answer

A) a 
B) b 
C) c 
D) d 
E) b and c 
A) a 
B) b 
C) c 
D) d 
E) b and c

Question 20

The term opportunity cost suggests that

Accepted Answer

A) in any exchange situation where one person gains,someone else must lose 
B) not all individuals make the most of life's opportunities 
C) executives do not always recognize opportunities for profit as quickly as they should 
D) the only factor that is important in decision making is cost 
E) because goods are scarce,in order to get some good you must give up some other good in return 
A) in any exchange situation where one person gains,someone else must lose 
B) not all individuals make the most of life's opportunities 
C) executives do not always recognize opportunities for profit as quickly as they should 
D) the only factor that is important in decision making is cost 
E) because goods are scarce,in order to get some good you must give up some other good in return

Exam 2: Economic Tools and Economics Systems

Exhibit 2-10 -Refer to Exhibit 2-10.Which of the graphs best illustrates the impact on the production possibilities frontier of a decrease in unemployment?

Exhibit 2-12 Maria and Hans Production Possibilities for Laundry and Typing -According to Exhibit 2-12,if Maria does one fewer load of laundry,how many pages can she type in the time saved on laundry?

An outward shift of the production possibilities frontier

Which economic concept does the expression "time is money" reflect?

If all resources are used efficiently to produce goods and services,a nation will find itself producing

The production possibilities frontier represents all desirable combinations of two goods

The Sultan of Brunei,one of the world's richest people,does not face the problem of scarcity.

A mixed capitalist economy is one in which

Exhibit 2-1 John and Harry's Production Possibilities for Ironing Shirts and Typing Papers -Exhibit 2-1 shows the production possibilities for ironing shirts and typing papers for John and Harry.Each has 5 hours per week to spend on these tasks.Which of the following statements is correct?

The division of labor

If the production possibilities frontier is a straight line,

Exhibit 2-6 -In moving from point f to point g in Exhibit 2-6,the

When faced with a choice,a person assesses alternatives as long as the expected marginal __________ of gathering more information about the person's opinions __________ the expected marginal __________.

Exhibit 2-4 -In Exhibit 2-4,if resources are used fully and efficiently,then the economy can produce at point(s)

Which of the following would shift the production possibilities frontier outward?

A point inside the production possibilities curve illustrates a situation in which resources are not fully employed

The law of increasing opportunity cost reflects the fact that

It is possible for one person to have a comparative advantage in the production of all products?

Exhibit 2-10 -Refer to Exhibit 2-10.Which of the graphs best illustrates the impact on the production possibilities frontier of a technological improvement that will make the resources used to produce consumer goods more efficient?

The term opportunity cost suggests that

The Art and Science of Economic Analysis

Economic Decision Makers

Demand, supply, and Markets

Introduction to Macroeconomics

Tracking the Useconomy

Unemployment and Inflation

Productivity and Growth

Aaggregate Expenditure and Aggregate Demand

Baggregate Expenditure and Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

International Trade

Externalities and the Environment

International Finance

Economic Development

understanding Graphs

National Income Accounts

The Algebra of Demand-Side Equilibrium

Filters

When faced with a choice,a person assesses alternatives as long as the expected marginal of gathering more information about the person's opinions the expected marginal __.