Question 1

Efficiency is achieved

Accepted Answer

A)  when output is being produced at a point inside a production possibilities curve. 
B)  when producers are getting the maximum possible output from the available resources. 
C)  when consumers are able to buy everything that they want. 
D)  when prices of all goods and services go to zero. 
A)  when output is being produced at a point inside a production possibilities curve. 
B)  when producers are getting the maximum possible output from the available resources. 
C)  when consumers are able to buy everything that they want. 
D)  when prices of all goods and services go to zero.

Question 2

Which of the following statements about scarcity is TRUE?

Accepted Answer

A)  Scarcity is no longer a problem for industrialized countries. 
B)  Scarcity exists in all societies. 
C)  Scarcity is a problem only for greedy people. 
D)  Scarcity is a problem only in countries that do not use markets to organize economic activity. 
A)  Scarcity is no longer a problem for industrialized countries. 
B)  Scarcity exists in all societies. 
C)  Scarcity is a problem only for greedy people. 
D)  Scarcity is a problem only in countries that do not use markets to organize economic activity.

Question 3

Economic goods are items that

Accepted Answer

A)  are used only by economists. 
B)  provide satisfaction to users. 
C)  cannot be sold at any price in the market. 
D)  individuals would pay to get rid off. 
A)  are used only by economists. 
B)  provide satisfaction to users. 
C)  cannot be sold at any price in the market. 
D)  individuals would pay to get rid off.

Question 4

The accumulated training and education that you have is

Accepted Answer

A)  physical capital. 
B)  entrepreneurship. 
C)  economic goods. 
D)  human capital. 
A)  physical capital. 
B)  entrepreneurship. 
C)  economic goods. 
D)  human capital.

Question 5

Natural gas found in Oklahoma is an example of

Accepted Answer

A)  physical capital. 
B)  land. 
C)  human capital. 
D)  labor. 
A)  physical capital. 
B)  land. 
C)  human capital. 
D)  labor.

Question 6

If a CEO can type faster than her secretary, then

Accepted Answer

A)  the CEO has a comparative advantage in typing. 
B)  the CEO has neither a comparative advantage in typing, nor in management. 
C)  the CEO should still continue performing CEO duties since the CEO has a comparative advantage in management, and the secretary should continue typing. 
D)  the CEO should still continue performing CEO duties as well as typing since he has a comparative advantage in both management, and typing. 
A)  the CEO has a comparative advantage in typing. 
B)  the CEO has neither a comparative advantage in typing, nor in management. 
C)  the CEO should still continue performing CEO duties since the CEO has a comparative advantage in management, and the secretary should continue typing. 
D)  the CEO should still continue performing CEO duties as well as typing since he has a comparative advantage in both management, and typing.

Question 7

Which of the following is the best example of scarcity?

Accepted Answer

A)  The Talking Teddy is a surprise holiday hit, resulting in long lines of consumers trying to purchase the limited number of available Teddies. 
B)  Fred only gets a 10-hour lunch break and each day must decide between working out at the gym or socializing with his colleagues. 
C)  The local market's buy-one-get-one-free sale on strawberries results in more people wanting the berries than producers are able and willing to supply. 
D)  Pokemon Go is the most popular cell-phone app that can be downloaded free from an app store. 
A)  The Talking Teddy is a surprise holiday hit, resulting in long lines of consumers trying to purchase the limited number of available Teddies. 
B)  Fred only gets a 10-hour lunch break and each day must decide between working out at the gym or socializing with his colleagues. 
C)  The local market's buy-one-get-one-free sale on strawberries results in more people wanting the berries than producers are able and willing to supply. 
D)  Pokemon Go is the most popular cell-phone app that can be downloaded free from an app store.

Question 8

The opportunity cost of attending college might best be described as

Accepted Answer

A)  the money that must be paid in order to attend college. 
B)  the lowest-valued alternative use of the student's time. 
C)  the highest-valued alternative use of the student's time. 
D)  the value that the student attaches to not working. 
A)  the money that must be paid in order to attend college. 
B)  the lowest-valued alternative use of the student's time. 
C)  the highest-valued alternative use of the student's time. 
D)  the value that the student attaches to not working.

Question 9

When an economy is operating efficiently, which is TRUE?

Accepted Answer

A)  All resources are fully employed. 
B)  It would be possible to increase the output of 1 good without decreasing the output of the other. 
C)  Resources are not fully employed or current technology is not being fully utilized. 
D)  This economy is operating to the right of its production possibilities curve (PP
C) . 
A)  All resources are fully employed. 
B)  It would be possible to increase the output of 1 good without decreasing the output of the other. 
C)  Resources are not fully employed or current technology is not being fully utilized. 
D)  This economy is operating to the right of its production possibilities curve (PP
C) .

Question 10

Which of the following statements is FALSE about opportunity cost?

Accepted Answer

A)  Cost is always foregone opportunity. 
B)  Opportunity cost is the next best alternative. 
C)  When a person buys two items, the concept of opportunity cost applies even though she can afford to buy both items. 
D)  Opportunity cost exists only for goods with monetary values. 
A)  Cost is always foregone opportunity. 
B)  Opportunity cost is the next best alternative. 
C)  When a person buys two items, the concept of opportunity cost applies even though she can afford to buy both items. 
D)  Opportunity cost exists only for goods with monetary values.

Question 11

Trading off capital goods for increasing amounts of consumer goods today will most likely result in

Accepted Answer

A)  increased long-term growth. 
B)  decreased long-term growth. 
C)  decreased prices in consumer goods. 
D)  increases in the quantity of consumer goods. 
A)  increased long-term growth. 
B)  decreased long-term growth. 
C)  decreased prices in consumer goods. 
D)  increases in the quantity of consumer goods.

Exam 2: Scarcity and the World of Trade-Offs

Efficiency is achieved

Which of the following statements about scarcity is TRUE?

Economic goods are items that

The accumulated training and education that you have is

Natural gas found in Oklahoma is an example of

If a CEO can type faster than her secretary, then

Which of the following is the best example of scarcity?

The opportunity cost of attending college might best be described as

When an economy is operating efficiently, which is TRUE?

Which of the following statements is FALSE about opportunity cost?

Trading off capital goods for increasing amounts of consumer goods today will most likely result in

The Nature of Economics

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, Banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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