Question 1

One of the assumptions underlying the production possibilities curve is that

Accepted Answer

A)  at least one of the factors of production is a free good.
B)  the quantity of the resources available for the production of economic goods is fixed over a given time period.
C)  there is at least one factor of production that is employed inefficiently.
D)  some of the factors of production are not being used.

Question 2

The law of increasing additional cost is due to

Accepted Answer

A)  scarcity.
B)  inefficient use of technology.
C)  the fact that resources are not perfectly adaptable for alternative uses.
D)  the fact that there are always alternatives and it is costly to figure out which alternative is best.

Question 3

Which of the following is NOT an example of investment in human capital?

Accepted Answer

A)  A medical student's internship
B)  The purchase of a personal computer for playing games
C)  A mechanic attends a training workshop on a new type of engine
D)  Johnny learns how to read

Question 4

The production possibilities curve demonstrate which of the following concepts?

Accepted Answer

A)  scarcity
B)  choice
C)  trade-offs
D)  all of the above

Question 5

Politicians often argue that a country's standard of living is reduced when it allows imports into the country.Offer an economically sound counter-argument.

Accepted Answer

Specialization of labor is productive,so...

Question 6

Which of the following statements indicates the idea of trade-offs?

Accepted Answer

A)  "I chose the road less traveled."
B)  "The devil made me do it."
C)  "You've got me under your spell."
D)  "Always give it the best that you can."

Question 7

Economic goods are defined as

Accepted Answer

A)  tangible items only.
B)  services only.
C)  anything from which an individual derives satisfaction.
D)  any item which is available in sufficient quantity at zero price.

Question 8

Which of the following statements about scarcity is TRUE?

Accepted Answer

A)  Scarcity is no longer a problem for industrialized countries.
B)  Scarcity exists in all societies.
C)  Scarcity is a problem only for greedy people.
D)  Scarcity is a problem only in countries that do not use markets to organize economic activity.

Question 9

Which of the following is NOT a factor of production?

Accepted Answer

A)  land
B)  labor
C)  a product
D)  entrepreneurship

Question 10

Assuming Vice President Smith has to sacrifice more than his assistant in order to engage in full-time typing,we would say that his assistant has a(n) ________ advantage in typing versus Mr.Smith.

Accepted Answer

A)  absolute
B)  comparative
C)  pecuniary
D)  overwhelming

Question 11

The principle of comparative advantage implies that

Accepted Answer

A)  only wealthy countries ultimately can benefit from international trade.
B)  every country can benefit from international trade.
C)  we should limit the extent to which people specialize.
D)  most people are harmed by trade.

Question 12

The more society consumes today,

Accepted Answer

A)  the more it consumes next year.
B)  the harder it will be to consume less in the future because people will find it hard to adjust to less.
C)  the less society can consume in the future.
D)  the easier it will be to consume less in the future.

Question 13

A bowed production possibilities curve is consistent with

Accepted Answer

A)  an unchanged opportunity cost.
B)  a technologically inefficient society.
C)  the underutilization of productive resources.
D)  highly specialized resources.

Question 14

The only way that a society can produce outside the production possibilities curve is

Accepted Answer

A)  through economic growth.
B)  by producing efficiently.
C)  by obeying the Law of Increasing Additional Cost.
D)  to use the concept of opportunity cost.

Question 15

Technology is best defined as

Accepted Answer

A)  society's pool of applied knowledge concerning the production of goods and services.
B)  the maximum output that can be obtained from a stock of physical capital.
C)  output inside the production possibilities curve.
D)  the utilization of more resources for the same amount of production.

Question 16

What is production? What economic factors are involved in production?

Accepted Answer

Production involves any activity that co...

Question 17

One opportunity cost associated with going to college is

Accepted Answer

A)  purchasing text books.
B)  paying tuition.
C)  giving up employment possibilities while in college.
D)  paying for room,board,and other living expenses.

Question 18

Opportunity cost can best be defined as

Accepted Answer

A)  the interest cost of financing a business loan at the bank.
B)  the value of all of the alternatives sacrificed.
C)  the value of the next-highest-ranked alternative.
D)  There is no real definition for opportunity cost.

Question 19

-In the above figure,which of the following points indicates the efficient use of resources?

Accepted Answer

A)  a
B)  f
C)  g
D)  h

Question 20

Services can be thought of as

Accepted Answer

A)  unvalued goods.
B)  unwanted goods.
C)  free goods.
D)  intangible goods.

Exam 2: Scarcity and the World of Trade-Offs

Which of the following statements indicates the idea of trade-offs?

Correct AnswerverifiedShow Answer

Which of the following is NOT a factor of production?

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The more society consumes today,

Correct AnswerverifiedShow Answer

A bowed production possibilities curve is consistent with

Correct AnswerverifiedShow Answer

Economic goods are defined as

Correct AnswerverifiedShow Answer

Opportunity cost can best be defined as

Correct AnswerverifiedShow Answer

-In the above figure,which of the following points indicates the efficient use of resources?

Correct AnswerverifiedShow Answer

The principle of comparative advantage implies that

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Which of the following statements about scarcity is TRUE?

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Which of the following is NOT an example of investment in human capital?

Correct AnswerverifiedShow Answer

One of the assumptions underlying the production possibilities curve is that

Correct AnswerverifiedShow Answer

The law of increasing additional cost is due to

Correct AnswerverifiedShow Answer

Technology is best defined as

Correct AnswerverifiedShow Answer

Politicians often argue that a country's standard of living is reduced when it allows imports into the country.Offer an economically sound counter-argument.

Correct AnswerverifiedSpecialization of labor is productive,so...View AnswerShow Answer

One opportunity cost associated with going to college is

Correct AnswerverifiedShow Answer

Assuming Vice President Smith has to sacrifice more than his assistant in order to engage in full-time typing,we would say that his assistant has a(n) ________ advantage in typing versus Mr.Smith.

Correct AnswerverifiedShow Answer

The only way that a society can produce outside the production possibilities curve is

Correct AnswerverifiedShow Answer

Services can be thought of as

Correct AnswerverifiedShow Answer

What is production? What economic factors are involved in production?

Correct AnswerverifiedProduction involves any activity that co...View AnswerShow Answer

The production possibilities curve demonstrate which of the following concepts?

Correct AnswerverifiedShow Answer

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Specialization of labor is productive,so...
View Answer

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Production involves any activity that co...
View Answer

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