Question 1

If a country wants to promote future growth, it should

Accepted Answer

A)  produce more capital goods today. 
B)  produce more consumer goods today. 
C)  produce only economic goods. 
D)  produce only needed goods. 
A)  produce more capital goods today. 
B)  produce more consumer goods today. 
C)  produce only economic goods. 
D)  produce only needed goods.

Question 2

Economic growth can be drawn in a diagram by

Accepted Answer

A)  making the production possibilities curve more bowed out. 
B)  making the production possibilities curve less bowed out. 
C)  shifting the production possibilities curve out. 
D)  shifting the production possibilities curve in. 
A)  making the production possibilities curve more bowed out. 
B)  making the production possibilities curve less bowed out. 
C)  shifting the production possibilities curve out. 
D)  shifting the production possibilities curve in.

Question 3

If an economy is operating at a point inside the production possibilities curve, then

Accepted Answer

A)  society's resources are being inefficiently utilized. 
B)  the curve will move to the left. 
C)  society's resources are being used to produce too many consumer goods. 
D)  economic policy must implemented to slow growth of the economy further. 
A)  society's resources are being inefficiently utilized. 
B)  the curve will move to the left. 
C)  society's resources are being used to produce too many consumer goods. 
D)  economic policy must implemented to slow growth of the economy further.

Question 4

Refer to the above figure. Point c is

Accepted Answer

A)  efficient. 
B)  where economists always want a nation or company to achieve. 
C)  unobtainable. 
D)  inefficient but obtainable. 
A)  efficient. 
B)  where economists always want a nation or company to achieve. 
C)  unobtainable. 
D)  inefficient but obtainable.

Question 5

The production possibilities curve can shift inward when

Accepted Answer

A)  production increases. 
B)  employment increases. 
C)  the stock of productive capital rises. 
D)  a country experiences a natural disaster. 
A)  production increases. 
B)  employment increases. 
C)  the stock of productive capital rises. 
D)  a country experiences a natural disaster.

Question 6

The idea of comparative advantage is related to

Accepted Answer

A)  the idea of opportunity cost. 
B)  the idea of absolute advantage. 
C)  using the worker with the most diverse sets of skills. 
D)  engineering efficiency. 
A)  the idea of opportunity cost. 
B)  the idea of absolute advantage. 
C)  using the worker with the most diverse sets of skills. 
D)  engineering efficiency.

Question 7

The value of the best alternative sacrificed to obtain something you want is referred to as

Accepted Answer

A)  explicit cost. 
B)  opportunity cost. 
C)  accounting cost. 
D)  tangible cost. 
A)  explicit cost. 
B)  opportunity cost. 
C)  accounting cost. 
D)  tangible cost.

Question 8

Why is a point below the production possibilities curve less efficient than a point on that curve?

Accepted Answer

A point on the production possibilities

Question 9

A point inside a society's production possibilities curve represents

Accepted Answer

A)  an unattainable combination of outputs. 
B)  an output combination that satisfies the needs of the population. 
C)  an underutilization of productive resources. 
D)  a technically superior output combination. 
A)  an unattainable combination of outputs. 
B)  an output combination that satisfies the needs of the population. 
C)  an underutilization of productive resources. 
D)  a technically superior output combination.

Question 10

"Wants" as an economic concept includes

Accepted Answer

A)  both material and nonmaterial desires. 
B)  only the purchase of necessary basic goods. 
C)  only the desire for luxury goods. 
D)  only goods and services that consumers need but cannot afford to buy. 
A)  both material and nonmaterial desires. 
B)  only the purchase of necessary basic goods. 
C)  only the desire for luxury goods. 
D)  only goods and services that consumers need but cannot afford to buy.

Question 11

The production possibilities curve represents

Accepted Answer

A)  the maximum amount of labor and capital available to society. 
B)  the combinations of goods and services among which consumers are indifferent. 
C)  the maximum combination of goods and services that can be produced with fixed resources and technology, given efficient use of the resources. 
D)  the maximum rate of growth of capital and labor in a country. 
A)  the maximum amount of labor and capital available to society. 
B)  the combinations of goods and services among which consumers are indifferent. 
C)  the maximum combination of goods and services that can be produced with fixed resources and technology, given efficient use of the resources. 
D)  the maximum rate of growth of capital and labor in a country.

Question 12

Economic goods are defined as

Accepted Answer

A)  tangible items only. 
B)  services only. 
C)  anything from which an individual derives satisfaction. 
D)  any item which is available in sufficient quantity at zero price. 
A)  tangible items only. 
B)  services only. 
C)  anything from which an individual derives satisfaction. 
D)  any item which is available in sufficient quantity at zero price.

Question 13

Regarding the production possibilities curve, an improvement in technology will

Accepted Answer

A)  shift the curve o the left. 
B)  cause a movement downward along the curve. 
C)  cause a movement downward along the curve 
D)  shift the curve to the right. 
A)  shift the curve o the left. 
B)  cause a movement downward along the curve. 
C)  cause a movement downward along the curve 
D)  shift the curve to the right.

Question 14

In the above figure, the opportunity cost of moving from point D to point E is

Accepted Answer

A)  75 guitars. 
B)  55 guitars. 
C)  100 ukuleles. 
D)  100 guitars. 
A)  75 guitars. 
B)  55 guitars. 
C)  100 ukuleles. 
D)  100 guitars.

Question 15

Given the production possibilities schedule in the above table, a combination of 75 televisions and 75 portable devices

Accepted Answer

A)  is attainable but involves the unemployment of some of society's resources. 
B)  clearly illustrates the trade-off between televisions and computers. 
C)  cannot be produced by society, given its current level of resources and production technology. 
D)  can be produced only if society is willing to have some of its resources used inefficiently. 
A)  is attainable but involves the unemployment of some of society's resources. 
B)  clearly illustrates the trade-off between televisions and computers. 
C)  cannot be produced by society, given its current level of resources and production technology. 
D)  can be produced only if society is willing to have some of its resources used inefficiently.

Question 16

Which of the following is assumed when constructing a production possibilities curve?

Accepted Answer

A)  a fixed amount of resources 
B)  the efficient use of resources 
C)  resources of a given quality 
D)  All of the above are correct. 
A)  a fixed amount of resources 
B)  the efficient use of resources 
C)  resources of a given quality 
D)  All of the above are correct.

Question 17

The above figure is referred to as a(n)

Accepted Answer

A)  supply-demand curve. 
B)  consumption curve. 
C)  production possibilities curve. 
D)  scarcity-shortage curve. 
A)  supply-demand curve. 
B)  consumption curve. 
C)  production possibilities curve. 
D)  scarcity-shortage curve.

Question 18

Suppose that nuclear power plants are banned. What are examples of the opportunity costs of this decision?

Accepted Answer

Electricity must be produced by some met

Question 19

The production possibilities curve bows outward because

Accepted Answer

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

Question 20

Explain: "The law of increasing additional cost is an inevitable phenomenon in economics."

Accepted Answer

Economic resources are seldom suitable f

Exam 2: Scarcity and the World of Trade-Offs

If a country wants to promote future growth, it should

Economic growth can be drawn in a diagram by

If an economy is operating at a point inside the production possibilities curve, then

Refer to the above figure. Point c is

The production possibilities curve can shift inward when

The idea of comparative advantage is related to

The value of the best alternative sacrificed to obtain something you want is referred to as

Why is a point below the production possibilities curve less efficient than a point on that curve?

A point inside a society's production possibilities curve represents

"Wants" as an economic concept includes

The production possibilities curve represents

Economic goods are defined as

Regarding the production possibilities curve, an improvement in technology will

In the above figure, the opportunity cost of moving from point D to point E is

Given the production possibilities schedule in the above table, a combination of 75 televisions and 75 portable devices

Which of the following is assumed when constructing a production possibilities curve?

The above figure is referred to as a(n)

Suppose that nuclear power plants are banned. What are examples of the opportunity costs of this decision?

The production possibilities curve bows outward because

Explain: "The law of increasing additional cost is an inevitable phenomenon in economics."

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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