Question 1

If society decides it wants more of one good and all resources are fully utilized,then

Accepted Answer

A) it is unable to do this unless technology advances. 
B) additional resource supplies will have to be found. 
C) it has to give up some of another good and incur some opportunity costs. 
D) more unemployment will occur. 
A) it is unable to do this unless technology advances. 
B) additional resource supplies will have to be found. 
C) it has to give up some of another good and incur some opportunity costs. 
D) more unemployment will occur.

Question 2

Figure 2-11 shows the production possibilities frontiers for Pakistan and Indonesia.Each country produces two goods,cotton and cashews.
-Refer to Figure 2-11.What is the opportunity cost of producing 1 bolt of cotton in Pakistan?

Accepted Answer

A) 3/8 of a pound of cashews 
B) 5/8 of a pound of cashews 
C) 1 3/5 pounds of cashews 
D) 150 pounds of cashews 
A) 3/8 of a pound of cashews 
B) 5/8 of a pound of cashews 
C) 1 3/5 pounds of cashews 
D) 150 pounds of cashews

Question 3

For each watch that Switzerland produces,it gives up the opportunity to make 50 pounds of chocolate.Germany can produce 1 watch for every 100 pounds of chocolate it produces.Which of the following is true about the comparative advantage between the two countries?

Accepted Answer

A) Switzerland has the comparative advantage in chocolate. 
B) Switzerland has the comparative advantage in watches. 
C) Germany has the comparative advantage in watches and chocolate. 
D) Germany has the comparative advantage in watches. 
A) Switzerland has the comparative advantage in chocolate. 
B) Switzerland has the comparative advantage in watches. 
C) Germany has the comparative advantage in watches and chocolate. 
D) Germany has the comparative advantage in watches.

Question 4

In economics,the term "free market" refers to a market where no sales tax is imposed on products sold.

Accepted Answer

A) True 
 B)False

Question 5

How do firms and households interact in markets?

Accepted Answer

Firms supply goods and service

Question 6

Table 2-5
Production choices for Nadia's Neckware
 $$\begin{array} { | c | c | c | } 
\hline \text { Choice } & \begin{array} { l } 
\text { Quantity of } \
\text { Ascots } \
\text { Produced }
\end{array} & \begin{array} { l } 
\text { Quantity of } \
\text { Bowties } \
\text { Produced }
\end{array} \
\hline \text { A } & 32 & 0 \
\hline \text { B } & 24 & 6 \
\hline \text { C } & 16 & 12 \
\hline \text { D } & 8 & 18 \
\hline \text { E } & 0 & 24 \
\hline
\end{array}$$
-Refer to Table 2-5.Assume Nadia's Neckware only produces ascots and bowties.A combination of 24 ascots and 12 bowties would appear

Accepted Answer

A) along Nadia's production possibilities frontier. 
B) inside Nadia's production possibilities frontier. 
C) outside Nadia's production possibilities frontier. 
D) at the horizontal intercept of Nadia's production possibilities frontier. 
A) along Nadia's production possibilities frontier. 
B) inside Nadia's production possibilities frontier. 
C) outside Nadia's production possibilities frontier. 
D) at the horizontal intercept of Nadia's production possibilities frontier.

Question 7

How are efficiency and inefficiency represented on a production possibilities frontier?

Accepted Answer

Efficiency is represented by p

Question 8

All of the following are considered intellectual property except

Accepted Answer

A) books. 
B) films. 
C) software. 
D) shares of stock. 
A) books. 
B) films. 
C) software. 
D) shares of stock.

Question 9

Without technological advancement,how can a nation achieve economic growth?

Accepted Answer

A) by producing more high-value goods and fewer low-value goods 
B) through an increase in supplies of factors of production 
C) by producing more low-value goods and fewer high-value goods 
D) by decreasing the size of the labor force 
A) by producing more high-value goods and fewer low-value goods 
B) through an increase in supplies of factors of production 
C) by producing more low-value goods and fewer high-value goods 
D) by decreasing the size of the labor force

Question 10

If a country is producing efficiently and is on the production possibilities frontier,the country can produce more of one good without producing less of the other good.

Accepted Answer

A) True 
 B)False

Question 11

The ________ demonstrates the roles played by households and firms in the market system.

Accepted Answer

A) production possibilities frontier 
B) circular flow model 
C) theory of comparative advantage 
D) business cycle 
A) production possibilities frontier 
B) circular flow model 
C) theory of comparative advantage 
D) business cycle

Question 12

$$\begin{array} { | l | c | c | } 
\hline & \begin{array} { c } 
\text { One Digital } \
\text { Camera }
\end{array} & \begin{array} { c } 
\text { Wheat } \
\text { (per pound) }
\end{array} \
\hline \text { China } & 100 \text { hours } & 4 \text { hours } \
\hline \text { South Korea } & 60 \text { hours } & 3 \text { hours } \
\hline
\end{array}$$ Table 2-11 shows the number of labor hours required to produce a digital camera and a pound of wheat in China and South Korea.
-Refer to Table 2-11.What is China's opportunity cost of producing one pound of wheat?

Accepted Answer

A) 0.04 units of a digital camera 
B) 4 digital cameras 
C) 25 digital cameras 
D) 40 digital cameras 
A) 0.04 units of a digital camera 
B) 4 digital cameras 
C) 25 digital cameras 
D) 40 digital cameras

Question 13

In a production possibilities frontier model,a point inside the frontier is

Accepted Answer

A) allocatively efficient. 
B) productively efficient. 
C) productively and allocatively inefficient. 
D) productively inefficient. 
A) allocatively efficient. 
B) productively efficient. 
C) productively and allocatively inefficient. 
D) productively inefficient.

Question 14

On a diagram of a production possibilities frontier,economic decline (negative growth)is represented by the production possibilities frontier shifting inward.

Accepted Answer

A) True 
 B)False

Question 15

Figure 2-10  
-Refer to Figure 2-10.If the economy is currently producing at point D,what is the opportunity cost of moving to point B?

Accepted Answer

A) 16 thousand spoons 
B) 46 thousand forks 
C) 60 thousand spoons 
D) 0 forks 
A) 16 thousand spoons 
B) 46 thousand forks 
C) 60 thousand spoons 
D) 0 forks

Question 16

In a simple circular flow diagram,who supplies factors of production in markets and who buys these factors of production? Who supplies goods and services in markets and who buys these goods and services?

Accepted Answer

Households supply factors of p

Question 17

$$\begin{array} { | l | c | c | } 
\hline & \text { One Motorcycle } & \text { One Guitar } \
\hline \text { Ireland } & 20 \text { hours } & 4 \text { hours } \
\hline \text { Scotland } & 8 \text { hours } & 2 \text { hours } \
\hline
\end{array}$$ Table 2-14 shows the number of labor hours required to produce a motorcycle and a guitar in Ireland and Scotland.
-Refer to Table 2-14.If the two countries specialize and trade,who should export guitars?

Accepted Answer

A) There is no basis for trade between the two countries. 
B) Ireland 
C) Scotland 
D) They should both be exporting guitars. 
A) There is no basis for trade between the two countries. 
B) Ireland 
C) Scotland 
D) They should both be exporting guitars.

Question 18

Figure 2-12 shows the production possibilities frontiers for Tahiti and Bora Bora.Each country produces two goods,milk and honey.
-Refer to Figure 2-12.What is the opportunity cost of producing one gallon of milk in Tahiti?

Accepted Answer

A) 1/2 of a gallon of honey 
B) 5/6 of a gallon of honey 
C) 1.2 gallons of honey 
D) 1.5 gallons of honey 
A) 1/2 of a gallon of honey 
B) 5/6 of a gallon of honey 
C) 1.2 gallons of honey 
D) 1.5 gallons of honey

Question 19

The term "property rights" refers to

Accepted Answer

A) the physical possession of a house or any other property which the owner legally purchased. 
B) the ability to exercise control over one's own resources within the confines of the law. 
C) the government's right to appropriate land from wealthy land owners to redistribute to peasants. 
D) the right of a business not to have its assets confiscated by the government in the event that the business is accused of committing fraud. 
A) the physical possession of a house or any other property which the owner legally purchased. 
B) the ability to exercise control over one's own resources within the confines of the law. 
C) the government's right to appropriate land from wealthy land owners to redistribute to peasants. 
D) the right of a business not to have its assets confiscated by the government in the event that the business is accused of committing fraud.

Question 20

Figure 2-13 shows the production possibilities frontiers for Costa Rica and Guatemala.Each country produces two goods,pineapples and coconuts.
-Refer to Figure 2-13.What is the opportunity cost of producing 1 ton of pineapples in Costa Rica?

Accepted Answer

A) 3/8 of a ton of coconuts 
B) 2/3 of a ton of coconuts 
C) 1 1/2 tons of coconuts 
D) 100 tons of coconuts 
A) 3/8 of a ton of coconuts 
B) 2/3 of a ton of coconuts 
C) 1 1/2 tons of coconuts 
D) 100 tons of coconuts

Exam 2: Trade-Offs, comparative Advantage, and the Market System

If society decides it wants more of one good and all resources are fully utilized,then

Figure 2-11 shows the production possibilities frontiers for Pakistan and Indonesia.Each country produces two goods,cotton and cashews. -Refer to Figure 2-11.What is the opportunity cost of producing 1 bolt of cotton in Pakistan?

For each watch that Switzerland produces,it gives up the opportunity to make 50 pounds of chocolate.Germany can produce 1 watch for every 100 pounds of chocolate it produces.Which of the following is true about the comparative advantage between the two countries?

In economics,the term "free market" refers to a market where no sales tax is imposed on products sold.

How do firms and households interact in markets?

Table 2-5 Production choices for Nadia's Neckware Choice Quantity of Ascots Produced Quantity of Bowties Produced A 32 0 B 24 6 C 16 12 D 8 18 E 0 24 -Refer to Table 2-5.Assume Nadia's Neckware only produces ascots and bowties.A combination of 24 ascots and 12 bowties would appear

How are efficiency and inefficiency represented on a production possibilities frontier?

All of the following are considered intellectual property except

Without technological advancement,how can a nation achieve economic growth?

If a country is producing efficiently and is on the production possibilities frontier,the country can produce more of one good without producing less of the other good.

The ________ demonstrates the roles played by households and firms in the market system.

In a production possibilities frontier model,a point inside the frontier is

On a diagram of a production possibilities frontier,economic decline (negative growth)is represented by the production possibilities frontier shifting inward.

Figure 2-10 -Refer to Figure 2-10.If the economy is currently producing at point D,what is the opportunity cost of moving to point B?

In a simple circular flow diagram,who supplies factors of production in markets and who buys these factors of production? Who supplies goods and services in markets and who buys these goods and services?

One Motorcycle One Guitar Ireland 20 hours 4 hours Scotland 8 hours 2 hours Table 2-14 shows the number of labor hours required to produce a motorcycle and a guitar in Ireland and Scotland. -Refer to Table 2-14.If the two countries specialize and trade,who should export guitars?

Figure 2-12 shows the production possibilities frontiers for Tahiti and Bora Bora.Each country produces two goods,milk and honey. -Refer to Figure 2-12.What is the opportunity cost of producing one gallon of milk in Tahiti?

The term "property rights" refers to

Figure 2-13 shows the production possibilities frontiers for Costa Rica and Guatemala.Each country produces two goods,pineapples and coconuts. -Refer to Figure 2-13.What is the opportunity cost of producing 1 ton of pineapples in Costa Rica?

Economics: Foundations and Models

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

Externalities, environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms,the Stock Market,and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology,production,and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, taxes, and the Distribution of Income

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

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