Question 1

Any output combination outside the production possibilities curve is attainable in the current period only if prices decrease.

Accepted Answer

A) True 
 B)False

Question 2

​Exhibit 3-13  
-Refer to Exhibit 3-13. The opportunity cost of producing an additional cake equals:​

Accepted Answer

A) ​40 cupcakes. 
B) ​10 cupcakes. 
C) ​4 cupcakes. 
D) ​1/4 of a cupcake. 
A) ​40 cupcakes. 
B) ​10 cupcakes. 
C) ​4 cupcakes. 
D) ​1/4 of a cupcake.

Question 3

​Exhibit 3-4  
-Refer to Exhibit 3-4. Which point corresponds to an economy experiencing significant unemployment and/or producing inefficiently?

Accepted Answer

A) ​Point A 
B) ​Point C 
C) ​Point E 
D) ​Point F 
A) ​Point A 
B) ​Point C 
C) ​Point E 
D) ​Point F

Question 4

Which concept explains how individual consumers in market economies determine what is to be produced?

Accepted Answer

A) ​competition 
B) ​consumer sovereignty 
C) ​decentralized decision-making 
D) ​free enterprise 
A) ​competition 
B) ​consumer sovereignty 
C) ​decentralized decision-making 
D) ​free enterprise

Question 5

Which of the following scenarios would cause an outward shift in the production possibilities curve?

Accepted Answer

A) ​temporary shutdown of mines due to frequent accidents 
B) ​discovery of large mineral deposits 
C) ​tougher environmental legislation 
D) shortage of skilled labor ​ 
A) ​temporary shutdown of mines due to frequent accidents 
B) ​discovery of large mineral deposits 
C) ​tougher environmental legislation 
D) shortage of skilled labor ​

Question 6

In a market economy, prices help determine the distribution of goods and services but not the allocation of resources.

Accepted Answer

A) True 
 B)False

Question 7

​Exhibit 3-8  
-Refer to Exhibit 3-8. At Point A in the production possibilities graph shown, the economy:

Accepted Answer

A) ​is not using its resources efficiently. 
B) ​is using its resources efficiently while producing clothing but no food. 
C) ​is using its resources efficiently while producing food but no clothing. 
D) ​is using its resources efficiently to produce both food and clothing. 
A) ​is not using its resources efficiently. 
B) ​is using its resources efficiently while producing clothing but no food. 
C) ​is using its resources efficiently while producing food but no clothing. 
D) ​is using its resources efficiently to produce both food and clothing.

Question 8

Which of the following is considered to be the best method of production?

Accepted Answer

A) ​Capital-intensive method 
B) ​Least-cost method 
C) ​Labor-intensive method 
D) ​Scarce resource method 
A) ​Capital-intensive method 
B) ​Least-cost method 
C) ​Labor-intensive method 
D) ​Scarce resource method

Question 9

A market economy answers the question "how" will goods be produced by focusing on

Accepted Answer

A) ​dollar votes. 
B) ​consumer sovereignty. 
C) ​least-cost method of production. 
D) ​who can afford these goods. 
A) ​dollar votes. 
B) ​consumer sovereignty. 
C) ​least-cost method of production. 
D) ​who can afford these goods.

Question 10

​Exhibit 3-12  
-Refer to Exhibit 3-12. The statement "to get more apples we have to give up wheat" is best illustrated in the diagram by a movement from:

Accepted Answer

A) ​Point A to Point E. 
B) ​Point A to Point C. 
C) ​Point B to Point C. 
D) ​Point C to Point D. 
A) ​Point A to Point E. 
B) ​Point A to Point C. 
C) ​Point B to Point C. 
D) ​Point C to Point D.

Question 11

In a market economy, the goods produced go to those who(m):

Accepted Answer

A) ​have sufficient income and are willing to pay the price asked for those goods. 
B) ​the government views as best suited for consumption. 
C) ​business firms choose to favor. 
D) ​desire the goods the least. 
A) ​have sufficient income and are willing to pay the price asked for those goods. 
B) ​the government views as best suited for consumption. 
C) ​business firms choose to favor. 
D) ​desire the goods the least.

Question 12

Illustrate a production possibilities curve for automobiles and breakfast cereal that is bowed outward. Show what is likely to happen to the production possibilities curve as a result of a devastating war on a country's home soil.

Accepted Answer

@#IMG-DLM& The production possibilities

Question 13

An increase in available resources will tend to cause a society's production possibilities curve to shift inward.

Accepted Answer

A) True 
 B)False

Question 14

An increase in production of one good will have zero opportunity cost only if the economy initially existed at a point inside the production possibilities curve.

Accepted Answer

A) True 
 B)False

Question 15

Brittany must write a political science term paper and prepare for an economics exam. The production possibilities curve between political science and economics preparation is a straight line. As time spent studying economics increases, the opportunity cost of studying for economics:

Accepted Answer

A) ​increases. 
B) ​remains the same. 
C) ​decreases. 
D) ​first increases then decreases. 
A) ​increases. 
B) ​remains the same. 
C) ​decreases. 
D) ​first increases then decreases.

Question 16

Which of the following is not a resource exchanged in the factor markets?

Accepted Answer

A) ​land 
B) ​capital 
C) ​labor 
D) ​All of the above are traded in the factor market. 
A) ​land 
B) ​capital 
C) ​labor 
D) ​All of the above are traded in the factor market.

Question 17

The private ownership of property and the use of the market system to direct and coordinate economic activity is most characteristic of:

Accepted Answer

A) ​a command economy. 
B) ​a mixed economy. 
C) ​a market economy. 
D) ​a traditional economy. 
A) ​a command economy. 
B) ​a mixed economy. 
C) ​a market economy. 
D) ​a traditional economy.

Question 18

A production possibilities curve is negatively sloped because:

Accepted Answer

A) ​the price of a good falls as you move down along the curve. 
B) ​resources are wasted as you move along the curve. 
C) ​it is not possible to adjust production decisions at all once an economy operates on the curve. 
D) ​once on the frontier, it is only possible to increase production of one good by reducing production of the other. 
A) ​the price of a good falls as you move down along the curve. 
B) ​resources are wasted as you move along the curve. 
C) ​it is not possible to adjust production decisions at all once an economy operates on the curve. 
D) ​once on the frontier, it is only possible to increase production of one good by reducing production of the other.

Question 19

Inefficiency is best illustrated by which of the following?

Accepted Answer

A) ​foregoing civilian goods in order to produce more military goods 
B) ​limiting economic growth by reducing capital spending 
C) ​high levels of unemployment of labor and other resources that could be productively employed 
D) ​producing outside the production possibilities frontier 
A) ​foregoing civilian goods in order to produce more military goods 
B) ​limiting economic growth by reducing capital spending 
C) ​high levels of unemployment of labor and other resources that could be productively employed 
D) ​producing outside the production possibilities frontier

Question 20

An economy is producing two goods, ice cream and cookies, and is currently operating efficiently. This economy can produce more cookies if:

Accepted Answer

A) ​it increases the price of ice cream. 
B) ​it increases the price of cookies. 
C) ​more of the economy's resources become idle. 
D) ​it produces less ice cream. 
A) ​it increases the price of ice cream. 
B) ​it increases the price of cookies. 
C) ​more of the economy's resources become idle. 
D) ​it produces less ice cream.

Exam 3: Scarcity, Trade-Offs, and Production Possibilities

Any output combination outside the production possibilities curve is attainable in the current period only if prices decrease.

​Exhibit 3-13 -Refer to Exhibit 3-13. The opportunity cost of producing an additional cake equals:​

​Exhibit 3-4 -Refer to Exhibit 3-4. Which point corresponds to an economy experiencing significant unemployment and/or producing inefficiently?

Which concept explains how individual consumers in market economies determine what is to be produced?

Which of the following scenarios would cause an outward shift in the production possibilities curve?

In a market economy, prices help determine the distribution of goods and services but not the allocation of resources.

​Exhibit 3-8 -Refer to Exhibit 3-8. At Point A in the production possibilities graph shown, the economy:

Which of the following is considered to be the best method of production?

A market economy answers the question "how" will goods be produced by focusing on

​Exhibit 3-12 -Refer to Exhibit 3-12. The statement "to get more apples we have to give up wheat" is best illustrated in the diagram by a movement from:

In a market economy, the goods produced go to those who(m):

Illustrate a production possibilities curve for automobiles and breakfast cereal that is bowed outward. Show what is likely to happen to the production possibilities curve as a result of a devastating war on a country's home soil.

An increase in available resources will tend to cause a society's production possibilities curve to shift inward.

An increase in production of one good will have zero opportunity cost only if the economy initially existed at a point inside the production possibilities curve.

Brittany must write a political science term paper and prepare for an economics exam. The production possibilities curve between political science and economics preparation is a straight line. As time spent studying economics increases, the opportunity cost of studying for economics:

Which of the following is not a resource exchanged in the factor markets?

The private ownership of property and the use of the market system to direct and coordinate economic activity is most characteristic of:

A production possibilities curve is negatively sloped because:

Inefficiency is best illustrated by which of the following?

An economy is producing two goods, ice cream and cookies, and is currently operating efficiently. This economy can produce more cookies if:

The Role and Method of Economics

Eight Powerful Ideas

Demand, Supply, and Market Equilibrium

Market in Motion and Price Controls

Elasticities

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Filters

Exhibit 3-13 -Refer to Exhibit 3-13. The opportunity cost of producing an additional cake equals:

Exhibit 3-4 -Refer to Exhibit 3-4. Which point corresponds to an economy experiencing significant unemployment and/or producing inefficiently?

Exhibit 3-8 -Refer to Exhibit 3-8. At Point A in the production possibilities graph shown, the economy:

Exhibit 3-12 -Refer to Exhibit 3-12. The statement "to get more apples we have to give up wheat" is best illustrated in the diagram by a movement from: