Question 1

What are the factors that can cause a shift in the production possibilities curve?

Accepted Answer

Advancement in technology, imp

Question 2

Suppose Freeland produces few consumption goods and many investment goods while Liberty Nation produces few investment goods and many consumption goods. Other things equal, you would expect

Accepted Answer

A) ​per capita income to grow more rapidly in Liberty Nation. 
B) ​population to grow faster in Liberty Nation. 
C) ​the production possibilities curve for Freeland will shift out more rapidly than that of Liberty Nation. 
D) ​that if both countries started with identical production possibilities curves, in twenty years, people in Liberty Nation will be able to produce more consumer goods than people in Freeland. 
A) ​per capita income to grow more rapidly in Liberty Nation. 
B) ​population to grow faster in Liberty Nation. 
C) ​the production possibilities curve for Freeland will shift out more rapidly than that of Liberty Nation. 
D) ​that if both countries started with identical production possibilities curves, in twenty years, people in Liberty Nation will be able to produce more consumer goods than people in Freeland.

Question 3

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

Accepted Answer

A) ​increases as the economy moves in a southeast direction along the production possibilities curve. 
B) ​decreases as the economy moves in a southeast direction along the production possibilities curve. 
C) ​remains constant as the economy moves in a southeast direction along the production possibilities curve. 
D) ​equals zero. 
A) ​increases as the economy moves in a southeast direction along the production possibilities curve. 
B) ​decreases as the economy moves in a southeast direction along the production possibilities curve. 
C) ​remains constant as the economy moves in a southeast direction along the production possibilities curve. 
D) ​equals zero.

Question 4

Which of the following is NOT illustrated by a production possibility curve?

Accepted Answer

A) ​scarcity 
B) ​opportunity cost 
C) ​necessity for choice 
D) ​price 
A) ​scarcity 
B) ​opportunity cost 
C) ​necessity for choice 
D) ​price

Question 5

​Exhibit 3-4  
-Refer to Exhibit 3-4. The opportunity cost of one more unit of a capital good is greater at Point ____ than at Point ____.

Accepted Answer

A) ​D; E 
B) ​E; D 
C) ​B; A 
D) ​None of the above.The opportunity cost of a good is constant everywhere along the production possibilities curve. 
A) ​D; E 
B) ​E; D 
C) ​B; A 
D) ​None of the above.The opportunity cost of a good is constant everywhere along the production possibilities curve.

Question 6

Excessive unemployment of resources is illustrated using a production possibilities curve by:

Accepted Answer

A) ​an inward shift of the curve. 
B) ​an outward shift of the curve. 
C) ​a movement along the curve in a northwest direction. 
D) ​a point inside the curve. 
A) ​an inward shift of the curve. 
B) ​an outward shift of the curve. 
C) ​a movement along the curve in a northwest direction. 
D) ​a point inside the curve.

Question 7

Along a production possibilities curve that is concave to the origin, the opportunity cost of production of the good on the horizontal axis ____ as we move down along the curve.

Accepted Answer

A) ​Decreases 
B) ​Increases 
C) ​remains constant 
D) ​first decreases, then increases 
A) ​Decreases 
B) ​Increases 
C) ​remains constant 
D) ​first decreases, then increases

Question 8

The main reason economists are concerned about the problem of idle or unemployed resources is that:

Accepted Answer

A) ​high rates of crime are related to high rates of unemployment. 
B) ​high rates of inflation are caused by idle land, labor, and capital resources. 
C) ​government benefits paid to unemployed workers put stress on the federal budget. 
D) ​unemployed resources mean less production and a lower standard of living for the nation. 
A) ​high rates of crime are related to high rates of unemployment. 
B) ​high rates of inflation are caused by idle land, labor, and capital resources. 
C) ​government benefits paid to unemployed workers put stress on the federal budget. 
D) ​unemployed resources mean less production and a lower standard of living for the nation.

Question 9

An economist defines efficiency as:

Accepted Answer

A) ​the maximization of output from available resources. 
B) ​the maximization of revenue from available resources. 
C) ​the maximization of inputs using available resources. 
D) ​the creation of a surplus using available resources. 
A) ​the maximization of output from available resources. 
B) ​the maximization of revenue from available resources. 
C) ​the maximization of inputs using available resources. 
D) ​the creation of a surplus using available resources.

Question 10

Given its production possibilities curve, the optimal combination of outputs for a society:

Accepted Answer

A) ​is beyond the production possibilities curve. 
B) ​is at the midpoint of the production possibilities curve. 
C) ​is inside the production possibilities curve. 
D) ​depends on the preferences of that society. 
A) ​is beyond the production possibilities curve. 
B) ​is at the midpoint of the production possibilities curve. 
C) ​is inside the production possibilities curve. 
D) ​depends on the preferences of that society.

Question 11

Alex must prepare for exams in both biology and economics this week. Assume that the production possibilities curve showing the tradeoff between exam scores in biology and economics is concave toward the origin. As Alex moves along the curve spending more of his time studying for economics, the opportunity cost of an hour of preparation for economics:

Accepted Answer

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

Question 12

​Exhibit 3-4  
-Refer to Exhibit 3-4. For this economy, the most preferred point at which to produce is:

Accepted Answer

A) ​Point C. 
B) ​Point D. 
C) ​Point E. 
D) ​It cannot be determined without information about society's preferences. 
A) ​Point C. 
B) ​Point D. 
C) ​Point E. 
D) ​It cannot be determined without information about society's preferences.

Question 13

Which of the following distinguishes a "straight-line" production possibilities curve from one that is "bowed out"?

Accepted Answer

A) ​A straight-line production possibilities curve exhibits increasing opportunity costs, whereas a bowed production possibilities curve does not. 
B) ​A straight-line production possibilities curve exhibits decreasing opportunity costs, whereas a bowed production possibilities curve does not. 
C) ​A straight-line production possibilities curve exhibits constant opportunity costs, whereas a bowed production possibilities curve does not. 
D) ​A straight-line production possibilities curve is upward sloping, whereas a bowed production possibilities curve is not. 
A) ​A straight-line production possibilities curve exhibits increasing opportunity costs, whereas a bowed production possibilities curve does not. 
B) ​A straight-line production possibilities curve exhibits decreasing opportunity costs, whereas a bowed production possibilities curve does not. 
C) ​A straight-line production possibilities curve exhibits constant opportunity costs, whereas a bowed production possibilities curve does not. 
D) ​A straight-line production possibilities curve is upward sloping, whereas a bowed production possibilities curve is not.

Question 14

The circular flow of economic activity is a model of the:

Accepted Answer

A) ​flow of goods, services, and payments between households and firms. 
B) ​influence of government on business behavior. 
C) ​role of unions and government in the economy. 
D) ​interaction among taxes, prices, and profits. 
A) ​flow of goods, services, and payments between households and firms. 
B) ​influence of government on business behavior. 
C) ​role of unions and government in the economy. 
D) ​interaction among taxes, prices, and profits.

Question 15

​Exhibit 3-15  
-Refer to Exhibit 3-15. Moving from Point C to Point D, what is the opportunity cost of producing a mountain bike?

Accepted Answer

The answer of ​Exhibit 3-15  
-Refer to Exhibit 3-15....

Question 16

​Exhibit 3-3  
-Refer to Exhibit 3-3. A movement from Point G to Point F:

Accepted Answer

A) ​involves sacrificing bread in order to produce a greater quantity of wine. 
B) ​involves sacrificing wine in order to produce a greater quantity of bread. 
C) ​involves no sacrifice of output, as both more wine and bread can be produced if available resources are used more efficiently. 
D) ​will increase the level of unemployment in the economy. 
A) ​involves sacrificing bread in order to produce a greater quantity of wine. 
B) ​involves sacrificing wine in order to produce a greater quantity of bread. 
C) ​involves no sacrifice of output, as both more wine and bread can be produced if available resources are used more efficiently. 
D) ​will increase the level of unemployment in the economy.

Question 17

Consider a production possibilities curve for an economy producing bicycles and video game players. It is possible to increase the production of bicycles without sacrificing video game players if:

Accepted Answer

A) ​the production possibilities curve shifts outward due to technological progress. 
B) ​the production possibilities curve shifts outward due to increased immigration (which enlarges the labor force). 
C) ​the economy moves from a point inside the production possibilities curve to a point on the curve. 
D) ​any of the above occur. 
A) ​the production possibilities curve shifts outward due to technological progress. 
B) ​the production possibilities curve shifts outward due to increased immigration (which enlarges the labor force). 
C) ​the economy moves from a point inside the production possibilities curve to a point on the curve. 
D) ​any of the above occur.

Question 18

An improvement in technology will tend to cause a society's production possibilities curve to shift outward.

Accepted Answer

A) True 
 B)False

Question 19

The simple circular flow model shows that workers and owners of land and capital offer their services through:

Accepted Answer

A) ​product markets. 
B) ​factor markets. 
C) ​money markets 
D) ​government. 
A) ​product markets. 
B) ​factor markets. 
C) ​money markets 
D) ​government.

Question 20

The circular flow model indicates that income flows from households to firms through product markets and back from firms to households through factor markets. Is the total amount spent by all households equal to the total income that flows back to all households? Why or why not? Is the amount spent by each individual household equal to the amount that flows back to that specific household? Why or why not?

Accepted Answer

In our circular flow model, the total am

What are the factors that can cause a shift in the production possibilities curve?

Suppose Freeland produces few consumption goods and many investment goods while Liberty Nation produces few investment goods and many consumption goods. Other things equal, you would expect

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

Which of the following is NOT illustrated by a production possibility curve?

Exhibit 3-4 -Refer to Exhibit 3-4. The opportunity cost of one more unit of a capital good is greater at Point than at Point .

Excessive unemployment of resources is illustrated using a production possibilities curve by:

Along a production possibilities curve that is concave to the origin, the opportunity cost of production of the good on the horizontal axis ____ as we move down along the curve.

The main reason economists are concerned about the problem of idle or unemployed resources is that:

An economist defines efficiency as:

Given its production possibilities curve, the optimal combination of outputs for a society:

Exhibit 3-4 -Refer to Exhibit 3-4. For this economy, the most preferred point at which to produce is:

Which of the following distinguishes a "straight-line" production possibilities curve from one that is "bowed out"?

The circular flow of economic activity is a model of the:

Exhibit 3-15 -Refer to Exhibit 3-15. Moving from Point C to Point D, what is the opportunity cost of producing a mountain bike?

Exhibit 3-3 -Refer to Exhibit 3-3. A movement from Point G to Point F:

Consider a production possibilities curve for an economy producing bicycles and video game players. It is possible to increase the production of bicycles without sacrificing video game players if:

An improvement in technology will tend to cause a society's production possibilities curve to shift outward.

The simple circular flow model shows that workers and owners of land and capital offer their services through:

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

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

What are the factors that can cause a shift in the production possibilities curve?

Suppose Freeland produces few consumption goods and many investment goods while Liberty Nation produces few investment goods and many consumption goods. Other things equal, you would expect

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

Which of the following is NOT illustrated by a production possibility curve?

​Exhibit 3-4 -Refer to Exhibit 3-4. The opportunity cost of one more unit of a capital good is greater at Point ____ than at Point ____.

Excessive unemployment of resources is illustrated using a production possibilities curve by:

Along a production possibilities curve that is concave to the origin, the opportunity cost of production of the good on the horizontal axis ____ as we move down along the curve.

The main reason economists are concerned about the problem of idle or unemployed resources is that:

An economist defines efficiency as:

Given its production possibilities curve, the optimal combination of outputs for a society:

​Exhibit 3-4 -Refer to Exhibit 3-4. For this economy, the most preferred point at which to produce is:

Which of the following distinguishes a "straight-line" production possibilities curve from one that is "bowed out"?

The circular flow of economic activity is a model of the:

​Exhibit 3-15 -Refer to Exhibit 3-15. Moving from Point C to Point D, what is the opportunity cost of producing a mountain bike?

​Exhibit 3-3 -Refer to Exhibit 3-3. A movement from Point G to Point F:

Consider a production possibilities curve for an economy producing bicycles and video game players. It is possible to increase the production of bicycles without sacrificing video game players if:

An improvement in technology will tend to cause a society's production possibilities curve to shift outward.

The simple circular flow model shows that workers and owners of land and capital offer their services through:

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:

Exhibit 3-4 -Refer to Exhibit 3-4. The opportunity cost of one more unit of a capital good is greater at Point than at Point .

Exhibit 3-4 -Refer to Exhibit 3-4. For this economy, the most preferred point at which to produce is:

Exhibit 3-15 -Refer to Exhibit 3-15. Moving from Point C to Point D, what is the opportunity cost of producing a mountain bike?

Exhibit 3-3 -Refer to Exhibit 3-3. A movement from Point G to Point F: