Question 1

Opportunity costs exist for

Accepted Answer

A)  households but not businesses or governments.
B)  businesses but not households or governments.
C)  businesses and households but not governments.
D)  households, businesses, and governments.

Question 2

The major coordination tasks can be summarized with the questions

Accepted Answer

A)  who, what, when, where.
B)  how, what, for whom.
C)  how, what, why.
D)  how, why, for whom.
E)  who, how, what.

Question 3

If Japan and the United States engage in trade, and Japan gains as a result of the trade, does that mean the United States has lost in some manner?

Accepted Answer

If economic agents engage in voluntary t...

Question 4

In a centrally planned economy, resources are allocated primarily in accordance with directives from government agencies.

Accepted Answer

A) True 
 B)False

Question 5

A principle that economists emphasize is that the ____ of decision makers are always limited.

Accepted Answer

A)  ideas
B)  goals
C)  resources
D)  opportunities
E)  offices

Question 6

What would be the opportunity cost of a child using a coupon for a free ice cream cone?

Accepted Answer

A)  The dollar cost of the cone he or she selected
B)  The other types of ice cream he or she could have selected
C)  Zero, because the good was not a durable good
D)  Zero, because the good was free

Question 7

Although finished goods are scarce, the inputs to produce them are not scarce.

Accepted Answer

A) True 
 B)False

Question 8

Economists define efficiency as

Accepted Answer

A)  output maximization.
B)  the absence of waste.
C)  input maximization.
D)  the presence of surplus.

Question 9

Figure 3-2 
-In Figure 3-2, a move from a point like B to a point such as D

Accepted Answer

A)  is not possible.
B)  can be attained with a more efficient allocation of resources.
C)  can be attained if there is an improvement in technology.
D)  can be attained if unused resources are put into production.

Question 10

Few bother to think about what makes Florida oranges show up daily in South Dakota supermarkets, but the people of South Dakota are likely to think a great deal about this.Why does someone take the time and energy to assure that oranges that are grown in Florida move more than 1,000 miles before they appear on grocery shelves?

Accepted Answer

In a market economy, there is profit to ...

Question 11

In terms of the production possibilities diagram, the principle of increasing cost simply asserts that the frontier is

Accepted Answer

A)  downward sloping.
B)  upward sloping.
C)  bowed inward.
D)  bowed outward.
E)  undefined, because no market will exist in this case.

Question 12

Specialization of labor makes sense only if there is some means of exchange.

Accepted Answer

A) True 
 B)False

Question 13

The problem of scarcity

Accepted Answer

A)  has been "cooked up" by disenchanted anticapitalists.
B)  exists because resources are limited relative to wants.
C)  is solved by promoting economic growth.
D)  is caused by artificially high prices.

Question 14

How do economists define efficiency? Elaborate.

Accepted Answer

Economists define efficiency as the abse...

Question 15

A society that relies on a market-based economy will always protect the natural environment.

Accepted Answer

A) True 
 B)False

Question 16

Figure 3-6 
-In Figure 3-6, assume this economy is currently operating at point D.What is the opportunity cost of moving to B?

Accepted Answer

A)  About 200 bushels of wheat
B)  200 bushels of soybeans
C)  Infinite, B cannot be produced at any cost.
D)  0

Question 17

Figure 3-2 
-In Figure 3-2, the production possibilities frontier has a bowed-out shape because of the law of

Accepted Answer

A)  decreasing costs.
B)  increasing costs.
C)  demand.
D)  comparative advantage.

Question 18

Rob took the afternoon off from his job as a tire salesman to mow his lawn.Rob told his wife that this made sense because he would be saving the $50 he would have to pay a lawn service, noting that this would be the opportunity cost to the family.Rob's wife disagreed.What did Rob's wife say?

Accepted Answer

A)  The opportunity cost would be Rob's lost income from selling tires that afternoon plus the $50.
B)  The opportunity cost would be Rob's lost income from selling tires that afternoon minus the $50.
C)  That Rob just wanted to take the afternoon off.
D)  The opportunity cost would be Rob's lost income from selling tires that afternoon.

Question 19

A market system works very well in solving some basic problems of the economy but it fails in some cases.Provide examples.

Accepted Answer

The market deals with efficiency in prod...

Question 20

When a firm or economy is operating efficiently, it is operating

Accepted Answer

A)  outside its production possibilities frontier.
B)  inside its production possibilities frontier.
C)  on its production possibilities frontier.
D)  at the intersection of the production possibilities frontier and the vertical axis.
E)  at the intersection of the production possibilities frontier and the horizontal axis.

Exam 3: The Fundamental Economic Problem: Scarcity and Choice

What would be the opportunity cost of a child using a coupon for a free ice cream cone?

Correct Answer
verified

In a centrally planned economy, resources are allocated primarily in accordance with directives from government agencies.

Correct Answer
verified

When a firm or economy is operating efficiently, it is operating

Correct Answer
verified

Correct Answer
verified
In a market economy, there is profit to ...
View Answer

Economists define efficiency as

Correct Answer
verified

Rob took the afternoon off from his job as a tire salesman to mow his lawn.Rob told his wife that this made sense because he would be saving the $50 he would have to pay a lawn service, noting that this would be the opportunity cost to the family.Rob's wife disagreed.What did Rob's wife say?

Correct Answer
verified

Although finished goods are scarce, the inputs to produce them are not scarce.

Correct Answer
verified

Figure 3-6 -In Figure 3-6, assume this economy is currently operating at point D.What is the opportunity cost of moving to B?

Correct Answer
verified

The problem of scarcity

Correct Answer
verified

Specialization of labor makes sense only if there is some means of exchange.

Correct Answer
verified

The major coordination tasks can be summarized with the questions

Correct Answer
verified

How do economists define efficiency? Elaborate.

Correct Answer
verified
Economists define efficiency as the abse...
View Answer

Figure 3-2 -In Figure 3-2, a move from a point like B to a point such as D

Correct Answer
verified

Opportunity costs exist for

Correct Answer
verified

In terms of the production possibilities diagram, the principle of increasing cost simply asserts that the frontier is

Correct Answer
verified

A society that relies on a market-based economy will always protect the natural environment.

Correct Answer
verified

A principle that economists emphasize is that the ____ of decision makers are always limited.

Correct Answer
verified

A market system works very well in solving some basic problems of the economy but it fails in some cases.Provide examples.

Correct Answer
verified
The market deals with efficiency in prod...
View Answer

Figure 3-2 -In Figure 3-2, the production possibilities frontier has a bowed-out shape because of the law of

Correct Answer
verified

If Japan and the United States engage in trade, and Japan gains as a result of the trade, does that mean the United States has lost in some manner?

Correct Answer
verified
If economic agents engage in voluntary t...
View Answer

Exam 3: The Fundamental Economic Problem: Scarcity and Choice

What would be the opportunity cost of a child using a coupon for a free ice cream cone?

Correct AnswerverifiedShow Answer

In a centrally planned economy, resources are allocated primarily in accordance with directives from government agencies.

Correct AnswerverifiedShow Answer

When a firm or economy is operating efficiently, it is operating

Correct AnswerverifiedShow Answer

Correct AnswerverifiedIn a market economy, there is profit to ...View AnswerShow Answer

Economists define efficiency as

Correct AnswerverifiedShow Answer

Rob took the afternoon off from his job as a tire salesman to mow his lawn.Rob told his wife that this made sense because he would be saving the $50 he would have to pay a lawn service, noting that this would be the opportunity cost to the family.Rob's wife disagreed.What did Rob's wife say?

Correct AnswerverifiedShow Answer

Although finished goods are scarce, the inputs to produce them are not scarce.

Correct AnswerverifiedShow Answer

Figure 3-6 -In Figure 3-6, assume this economy is currently operating at point D.What is the opportunity cost of moving to B?

Correct AnswerverifiedShow Answer

The problem of scarcity

Correct AnswerverifiedShow Answer

Specialization of labor makes sense only if there is some means of exchange.

Correct AnswerverifiedShow Answer

The major coordination tasks can be summarized with the questions

Correct AnswerverifiedShow Answer

How do economists define efficiency? Elaborate.

Correct AnswerverifiedEconomists define efficiency as the abse...View AnswerShow Answer

Figure 3-2 -In Figure 3-2, a move from a point like B to a point such as D

Correct AnswerverifiedShow Answer

Opportunity costs exist for

Correct AnswerverifiedShow Answer

In terms of the production possibilities diagram, the principle of increasing cost simply asserts that the frontier is

Correct AnswerverifiedShow Answer

A society that relies on a market-based economy will always protect the natural environment.

Correct AnswerverifiedShow Answer

A principle that economists emphasize is that the ____ of decision makers are always limited.

Correct AnswerverifiedShow Answer

A market system works very well in solving some basic problems of the economy but it fails in some cases.Provide examples.

Correct AnswerverifiedThe market deals with efficiency in prod...View AnswerShow Answer

Figure 3-2 -In Figure 3-2, the production possibilities frontier has a bowed-out shape because of the law of

Correct AnswerverifiedShow Answer

If Japan and the United States engage in trade, and Japan gains as a result of the trade, does that mean the United States has lost in some manner?

Correct AnswerverifiedIf economic agents engage in voluntary t...View AnswerShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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In a market economy, there is profit to ...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified
Economists define efficiency as the abse...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The market deals with efficiency in prod...
View Answer

Correct Answer
verified

Correct Answer
verified
If economic agents engage in voluntary t...
View Answer