Question 1

​Exhibit 3-6  
-Refer to Exhibit 3-6. In the diagram, Point D is:

Accepted Answer

A) ​unattainable. 
B) ​beyond the society's productive capability. 
C) ​efficient. 
D) ​inefficient. 
A) ​unattainable. 
B) ​beyond the society's productive capability. 
C) ​efficient. 
D) ​inefficient.

Question 2

Movement from one point on the production possibilities curve to another leads to more of both goods being produced.

Accepted Answer

A) True 
 B)False

Question 3

The law of increasing opportunity costs implies that a society's production possibilities curve will be a straight line.

Accepted Answer

A) True 
 B)False

Question 4

The production possibilities curve illustrates:

Accepted Answer

A) ​the minimum quantity of two resources necessary to produce a given level of output. 
B) ​that when resources are currently being used inefficiently, it is possible to increase production of one good only by sacrificing some of another good. 
C) ​that when resources are currently being used efficiently, it is possible to increase production of one good only by sacrificing some of another good. 
D) ​the minimum quantities of output that can be produced using available resources. 
A) ​the minimum quantity of two resources necessary to produce a given level of output. 
B) ​that when resources are currently being used inefficiently, it is possible to increase production of one good only by sacrificing some of another good. 
C) ​that when resources are currently being used efficiently, it is possible to increase production of one good only by sacrificing some of another good. 
D) ​the minimum quantities of output that can be produced using available resources.

Question 5

A production possibilities curve that is "bowed out" or concave to the origin:

Accepted Answer

A) ​illustrates a tradeoff in which the opportunity cost of a good increases with the level of its production. 
B) ​illustrates a tradeoff in which the opportunity cost of a good decreases with the level of its production. 
C) ​illustrates a tradeoff in which the opportunity cost of a good is constant at all levels of production. 
D) ​demonstrates the fallacy of composition. 
A) ​illustrates a tradeoff in which the opportunity cost of a good increases with the level of its production. 
B) ​illustrates a tradeoff in which the opportunity cost of a good decreases with the level of its production. 
C) ​illustrates a tradeoff in which the opportunity cost of a good is constant at all levels of production. 
D) ​demonstrates the fallacy of composition.

Question 6

When more resources in an economy are devoted to the production of capital goods:

Accepted Answer

A) ​the production possibilities curve shifts inward. 
B) ​the production possibilities curve in the current period shifts inward, but shifts outward in the future. 
C) ​the production possibilities curve shifts outward next in the future. 
D) ​the production possibilities curve is unchanged from period to period. 
A) ​the production possibilities curve shifts inward. 
B) ​the production possibilities curve in the current period shifts inward, but shifts outward in the future. 
C) ​the production possibilities curve shifts outward next in the future. 
D) ​the production possibilities curve is unchanged from period to period.

Question 7

On a production possibilities diagram, points inside the frontier are:

Accepted Answer

A) ​unattainable given existing technology and resources. 
B) ​inefficient. 
C) ​efficient. 
D) ​efficient but not necessarily desirable. 
A) ​unattainable given existing technology and resources. 
B) ​inefficient. 
C) ​efficient. 
D) ​efficient but not necessarily desirable.

Question 8

​Exhibit 3-14  
-Refer to Exhibit 3-14. Which move to the new production possibilities curve will result in more housing and food?

Accepted Answer

A) ​A to B​ 
B) ​A to C​ 
C) ​C to B 
D) ​B to A 
A) ​A to B​ 
B) ​A to C​ 
C) ​C to B 
D) ​B to A

Question 9

​Exhibit 3-4  
-Refer to Exhibit 3-4. Other things being equal, the economy will achieve the greatest economic growth over time if it currently operates at:

Accepted Answer

A) ​Point A. 
B) ​Point D. 
C) ​Point E. 
D) ​none of the above 
A) ​Point A. 
B) ​Point D. 
C) ​Point E. 
D) ​none of the above

Question 10

Improving the level of education of the labor force will:

Accepted Answer

A) ​move the economy from a point inside the production possibilities curve to a point on the production possibilities curve. 
B) ​move the economy from a point on the production possibilities curve to a point inside the production possibilities curve. 
C) ​shift the production possibilities curve outward. 
D) ​shift the production possibilities curve inward. 
A) ​move the economy from a point inside the production possibilities curve to a point on the production possibilities curve. 
B) ​move the economy from a point on the production possibilities curve to a point inside the production possibilities curve. 
C) ​shift the production possibilities curve outward. 
D) ​shift the production possibilities curve inward.

Question 11

Which of the following is not a question that scarcity forces all societies to answer?

Accepted Answer

A) ​Which goods and services are to be produced? 
B) ​How are goods and services to be produced? 
C) ​Who will get the goods and services produced? 
D) ​How can scarcity be eliminated? 
A) ​Which goods and services are to be produced? 
B) ​How are goods and services to be produced? 
C) ​Who will get the goods and services produced? 
D) ​How can scarcity be eliminated?

Question 12

A point beyond the boundary of an economy's production possibilities curve is:

Accepted Answer

A) ​efficient. 
B) in​efficient. 
C) ​attainable. 
D) un​attainable. 
A) ​efficient. 
B) in​efficient. 
C) ​attainable. 
D) un​attainable.

Question 13

A straight line production possibilities curve implies increasing opportunity costs.

Accepted Answer

A) True 
 B)False

Question 14

When resources are used efficiently, you can produce more of one good, ceteris paribus, only by:

Accepted Answer

A) ​printing more money. 
B) ​charging a lower price for output. 
C) ​charging a higher price for output. 
D) ​producing less of another good. 
A) ​printing more money. 
B) ​charging a lower price for output. 
C) ​charging a higher price for output. 
D) ​producing less of another good.

Question 15

Which of the following does not describe a pure market economy?

Accepted Answer

A) ​The choices of buyers and sellers determine the market prices of goods and services. 
B) ​Prices serve as signals to buyers and sellers. 
C) ​Prices and outputs of most goods and services are stable over time. 
D) ​Owners of resources in greater demand by others tend to have higher incomes. 
A) ​The choices of buyers and sellers determine the market prices of goods and services. 
B) ​Prices serve as signals to buyers and sellers. 
C) ​Prices and outputs of most goods and services are stable over time. 
D) ​Owners of resources in greater demand by others tend to have higher incomes.

Question 16

What determines the position and shape of a society's production possibilities curve?

Accepted Answer

A) ​the physical resources of that society 
B) ​the level of technology of the society 
C) ​the number of factories available to the society 
D) ​all of the above 
A) ​the physical resources of that society 
B) ​the level of technology of the society 
C) ​the number of factories available to the society 
D) ​all of the above

Question 17

An inefficient use of resources can be illustrated using a production possibilities curve as:

Accepted Answer

A) ​a movement to the northeast along the curve. 
B) ​a movement to the southeast along the curve. 
C) ​a movement off the curve in a northeast direction. 
D) ​a movement off the curve in a southwest direction. 
A) ​a movement to the northeast along the curve. 
B) ​a movement to the southeast along the curve. 
C) ​a movement off the curve in a northeast direction. 
D) ​a movement off the curve in a southwest direction.

Question 18

An economy's production possibilities curve for a year is drawn assuming:

Accepted Answer

A) ​a fixed quantity of resources and technology that is changing along the curve. 
B) ​an unchanging level of technology and a changing quantity of resources. 
C) ​a fixed quantity of available resources and an unchanging level of technology. 
D) ​that the productivity of resources increases continually. 
A) ​a fixed quantity of resources and technology that is changing along the curve. 
B) ​an unchanging level of technology and a changing quantity of resources. 
C) ​a fixed quantity of available resources and an unchanging level of technology. 
D) ​that the productivity of resources increases continually.

Question 19

The concavity (bowed-out shape) of the production possibilities curve is the result of:

Accepted Answer

A) ​the law of demand. 
B) ​the law of supply. 
C) ​the law of increasing opportunity cost. 
D) ​complementarily in consumption. 
A) ​the law of demand. 
B) ​the law of supply. 
C) ​the law of increasing opportunity cost. 
D) ​complementarily in consumption.

Question 20

If additional units of output could be produced at constant opportunity cost, the production possibilities curve would be:

Accepted Answer

A) ​bowed inward toward the origin. 
B) ​bowed outward away from the origin. 
C) ​positively sloped. 
D) ​a straight line with a negative slope. 
A) ​bowed inward toward the origin. 
B) ​bowed outward away from the origin. 
C) ​positively sloped. 
D) ​a straight line with a negative slope.

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

​Exhibit 3-6 -Refer to Exhibit 3-6. In the diagram, Point D is:

Movement from one point on the production possibilities curve to another leads to more of both goods being produced.

The law of increasing opportunity costs implies that a society's production possibilities curve will be a straight line.

The production possibilities curve illustrates:

A production possibilities curve that is "bowed out" or concave to the origin:

When more resources in an economy are devoted to the production of capital goods:

On a production possibilities diagram, points inside the frontier are:

​Exhibit 3-14 -Refer to Exhibit 3-14. Which move to the new production possibilities curve will result in more housing and food?

​Exhibit 3-4 -Refer to Exhibit 3-4. Other things being equal, the economy will achieve the greatest economic growth over time if it currently operates at:

Improving the level of education of the labor force will:

Which of the following is not a question that scarcity forces all societies to answer?

A point beyond the boundary of an economy's production possibilities curve is:

A straight line production possibilities curve implies increasing opportunity costs.

When resources are used efficiently, you can produce more of one good, ceteris paribus, only by:

Which of the following does not describe a pure market economy?

What determines the position and shape of a society's production possibilities curve?

An inefficient use of resources can be illustrated using a production possibilities curve as:

An economy's production possibilities curve for a year is drawn assuming:

The concavity (bowed-out shape) of the production possibilities curve is the result of:

If additional units of output could be produced at constant opportunity cost, the production possibilities curve would be:

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 3-6 -Refer to Exhibit 3-6. In the diagram, Point D is:

Exhibit 3-14 -Refer to Exhibit 3-14. Which move to the new production possibilities curve will result in more housing and food?

Exhibit 3-4 -Refer to Exhibit 3-4. Other things being equal, the economy will achieve the greatest economic growth over time if it currently operates at: