Question 1

Any movement along an existing production possibilities curve will

Accepted Answer

A) ​increase the production of one good while decreasing the production of the other. 
B) ​increase the production of both goods. 
C) ​increase efficiency. 
D) ​increase employment. 
A) ​increase the production of one good while decreasing the production of the other. 
B) ​increase the production of both goods. 
C) ​increase efficiency. 
D) ​increase employment.

Question 2

​Exhibit 3-4  
-Refer to Exhibit 3-4. Based on the production possibilities curve above, which of the following points are inefficient?

Accepted Answer

A) ​A only 
B) ​B only 
C) ​A and B only 
D) ​A, B, and G only 
A) ​A only 
B) ​B only 
C) ​A and B only 
D) ​A, B, and G only

Question 3

It can be said that, ultimately, consumers are the driving force behind answers to the three basic economic questions faced by societies. Explain the consumer's role in providing these answers.

Accepted Answer

What will be produced is directly determ

Question 4

​Exhibit 3-3  
-Refer to Exhibit 3-3. Currently, it is not possible to produce at:

Accepted Answer

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

Question 5

Which of the following will shift the production possibilities curve outward?

Accepted Answer

A) ​a hurricane that destroys buildings throughout Florida 
B) ​an increase in the capacity utilization of existing factories 
C) ​an increase in the unemployment rate 
D) ​a decrease in the market price of both goods 
A) ​a hurricane that destroys buildings throughout Florida 
B) ​an increase in the capacity utilization of existing factories 
C) ​an increase in the unemployment rate 
D) ​a decrease in the market price of both goods

Question 6

Which of the following would be primarily determined in factor markets?

Accepted Answer

A) ​The number of computers produced. 
B) ​The wage rates for high school teachers. 
C) ​The price of automobiles. 
D) ​Sales tax revenues. 
A) ​The number of computers produced. 
B) ​The wage rates for high school teachers. 
C) ​The price of automobiles. 
D) ​Sales tax revenues.

Question 7

Which of the following is not one of the fundamental economic questions all societies must face?

Accepted Answer

A) ​What goods and services are to be produced? 
B) ​How goods and services are to be produced? 
C) ​Which goods and services are to be produced by the government? 
D) ​Who is to receive the goods and services produced in the society? 
A) ​What goods and services are to be produced? 
B) ​How goods and services are to be produced? 
C) ​Which goods and services are to be produced by the government? 
D) ​Who is to receive the goods and services produced in the society?

Question 8

Which of the following is a possible explanation for the shift of the production possibilities curve illustrated?

Accepted Answer

A) ​an increase in the number of idle factories 
B) ​a technological advance that affects only bicycle production 
C) ​a technological advance that affects both pizza and bicycle production 
D) ​a decrease in the quantity of labor available due to emigration 
A) ​an increase in the number of idle factories 
B) ​a technological advance that affects only bicycle production 
C) ​a technological advance that affects both pizza and bicycle production 
D) ​a decrease in the quantity of labor available due to emigration

Question 9

When economic growth occurs it will:

Accepted Answer

A) ​eventually eliminate scarcity. 
B) ​shift the production possibilities curve to the left. 
C) ​be a product of luck. 
D) ​often result from improved technology. 
A) ​eventually eliminate scarcity. 
B) ​shift the production possibilities curve to the left. 
C) ​be a product of luck. 
D) ​often result from improved technology.

Question 10

An economy that has many unemployed workers and idle factories is not operating efficiently.

Accepted Answer

A) True 
 B)False

Question 11

​Exhibit 3-3  
-Refer to Exhibit 3-3. Along the production possibilities curve, the most efficient point of production depicted is:

Accepted Answer

A) ​Point B. 
B) ​Point C. 
C) ​Point D. 
D) ​All points on the production possibilities curve are equally efficient. 
A) ​Point B. 
B) ​Point C. 
C) ​Point D. 
D) ​All points on the production possibilities curve are equally efficient.

Question 12

A production possibilities curve is negatively sloped because:

Accepted Answer

A) ​unemployment increases as an economy moves down along the curve. 
B) ​along the curve, production of one good must be sacrificed in order to increase production of another. 
C) ​unemployment decreases as an economy moves down along the curve. 
D) ​as the price falls, more goods are purchased. 
A) ​unemployment increases as an economy moves down along the curve. 
B) ​along the curve, production of one good must be sacrificed in order to increase production of another. 
C) ​unemployment decreases as an economy moves down along the curve. 
D) ​as the price falls, more goods are purchased.

Question 13

Which of the following would not shift the production possibilities curve in an inward direction?

Accepted Answer

A) ​a sharp increase in the unemployment rate 
B) ​a decrease in the capital stock 
C) ​land is contaminated due to a nuclear meltdown 
D) ​a devastating war destroys both property and people 
A) ​a sharp increase in the unemployment rate 
B) ​a decrease in the capital stock 
C) ​land is contaminated due to a nuclear meltdown 
D) ​a devastating war destroys both property and people

Question 14

Which of the following is an example of a pure market economy?

Accepted Answer

A) ​United States 
B) ​Switzerland 
C) ​Singapore 
D) ​No nation has a pure market economy 
A) ​United States 
B) ​Switzerland 
C) ​Singapore 
D) ​No nation has a pure market economy

Question 15

Since resources are not equally substitutable across uses:

Accepted Answer

A) ​the production possibilities curve will be positively sloped. 
B) ​the production possibilities curve will be a straight line. 
C) ​the production possibilities curve will be bowed outward. 
D) ​the production possibilities curve will be bowed inward. 
A) ​the production possibilities curve will be positively sloped. 
B) ​the production possibilities curve will be a straight line. 
C) ​the production possibilities curve will be bowed outward. 
D) ​the production possibilities curve will be bowed inward.

Question 16

If the production possibilities curve is a straight line:

Accepted Answer

A) ​opportunity costs increase as output of either commodity is expanded. 
B) ​resources are not equally substitutable between the production of the goods. 
C) ​opportunity costs are negative. 
D) ​as an increasing quantity of resources are shifted from one manufacturing process (good Y) to another (good X), there is no increase in opportunity cost. 
A) ​opportunity costs increase as output of either commodity is expanded. 
B) ​resources are not equally substitutable between the production of the goods. 
C) ​opportunity costs are negative. 
D) ​as an increasing quantity of resources are shifted from one manufacturing process (good Y) to another (good X), there is no increase in opportunity cost.

Question 17

​Exhibit 3-5  
-Refer to Exhibit 3-5. If an economy operates at Point A on the production possibilities curve shown above, then:

Accepted Answer

A) ​it cannot increase its output of food. 
B) ​it cannot increase its output of clothing. 
C) ​it cannot simultaneously increase its output of both food and clothing. 
D) ​it is utilizing its resources inefficiently. 
A) ​it cannot increase its output of food. 
B) ​it cannot increase its output of clothing. 
C) ​it cannot simultaneously increase its output of both food and clothing. 
D) ​it is utilizing its resources inefficiently.

Question 18

An increase in the unemployment rate from 15 percent to 20 percent might be illustrated as:

Accepted Answer

A) ​a movement up and to the left from one point along the production possibilities curve to another. 
B) ​a movement from a point on the production possibilities curve to an interior point. 
C) ​a movement from an interior point to a point on the production possibilities curve. 
D) ​a movement from a point inside the production possibilities curve to one closer to the origin. 
A) ​a movement up and to the left from one point along the production possibilities curve to another. 
B) ​a movement from a point on the production possibilities curve to an interior point. 
C) ​a movement from an interior point to a point on the production possibilities curve. 
D) ​a movement from a point inside the production possibilities curve to one closer to the origin.

Question 19

Which of the following is an incorrect statement?

Accepted Answer

A) ​An economy with many unemployed workers and idle factories is not operating efficiently. 
B) ​Idle factories represent unemployed capital resources. 
C) ​A large amount of unemployed resources will shift the production possibilities curve outward. 
D) ​Idle farms represent unemployed land resources. 
A) ​An economy with many unemployed workers and idle factories is not operating efficiently. 
B) ​Idle factories represent unemployed capital resources. 
C) ​A large amount of unemployed resources will shift the production possibilities curve outward. 
D) ​Idle farms represent unemployed land resources.

Question 20

The production possibilities curve is:

Accepted Answer

A) ​a graph that shows the combinations of output which are most profitable to produce. 
B) ​a graph that shows the various combinations of output it is possible for an economy to produce given its available resources and technology. 
C) ​a graph that shows the various combinations of resources that can be used to produce a given level of output. 
D) ​a curve that shows the quantity of output that will be offered for sale at various prices. 
A) ​a graph that shows the combinations of output which are most profitable to produce. 
B) ​a graph that shows the various combinations of output it is possible for an economy to produce given its available resources and technology. 
C) ​a graph that shows the various combinations of resources that can be used to produce a given level of output. 
D) ​a curve that shows the quantity of output that will be offered for sale at various prices.

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

Any movement along an existing production possibilities curve will

​Exhibit 3-4 -Refer to Exhibit 3-4. Based on the production possibilities curve above, which of the following points are inefficient?

It can be said that, ultimately, consumers are the driving force behind answers to the three basic economic questions faced by societies. Explain the consumer's role in providing these answers.

​Exhibit 3-3 -Refer to Exhibit 3-3. Currently, it is not possible to produce at:

Which of the following will shift the production possibilities curve outward?

Which of the following would be primarily determined in factor markets?

Which of the following is not one of the fundamental economic questions all societies must face?

Which of the following is a possible explanation for the shift of the production possibilities curve illustrated?

When economic growth occurs it will:

An economy that has many unemployed workers and idle factories is not operating efficiently.

​Exhibit 3-3 -Refer to Exhibit 3-3. Along the production possibilities curve, the most efficient point of production depicted is:

A production possibilities curve is negatively sloped because:

Which of the following would not shift the production possibilities curve in an inward direction?

Which of the following is an example of a pure market economy?

Since resources are not equally substitutable across uses:

If the production possibilities curve is a straight line:

​Exhibit 3-5 -Refer to Exhibit 3-5. If an economy operates at Point A on the production possibilities curve shown above, then:

An increase in the unemployment rate from 15 percent to 20 percent might be illustrated as:

Which of the following is an incorrect statement?

The production possibilities curve is:

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 3-4 -Refer to Exhibit 3-4. Based on the production possibilities curve above, which of the following points are inefficient?

Exhibit 3-3 -Refer to Exhibit 3-3. Currently, it is not possible to produce at:

Exhibit 3-3 -Refer to Exhibit 3-3. Along the production possibilities curve, the most efficient point of production depicted is:

Exhibit 3-5 -Refer to Exhibit 3-5. If an economy operates at Point A on the production possibilities curve shown above, then: