Question 1

Why is it that all of our wants cannot be satisfied?

Accepted Answer

A)   because of shortages
B)   because we cannot seem to decide what we really want
C)   because other people try to change your mind about what you want
D)   because limited resources mean all the goods we want cannot be obtainedE) B) and D)
F) B) and C)

Question 2

Opportunity cost exists because

Accepted Answer

A)   resources in this world are scarce.
B)   prices must adjust to eliminate shortages.
C)   production could not occur without the opportunity cost of using resources.
D)   the value of economic goods is positive while the value of goods is zero.E) A) and B)
F) A) and C)

Question 3

In economics, physical capital includes

Accepted Answer

A)   money.
B)   bank deposits.
C)   machinery.
D)   shares of company stock.E) B) and C)
F) C) and D)

Question 4

Opportunity cost is

Accepted Answer

A)   the combined value of all the alternatives not selected.
B)   the same thing as the money price of a good.
C)   the value of the next best alternative which was given up.
D)   based on the intrinsic value of the good itself.E) A) and B)
F) None of the above

Question 5

The most basic concept of economics is

Accepted Answer

A)   money.
B)   scarcity.
C)   bounded rationality.
D)   shortage.E) All of the above
F) None of the above

Question 6

Look at the following production possibilities table for smartphones and tablets. The table shows the maximum combination of smartphones and tablets of corn that can be produced, when all resources are fully employed. Production Possibilities
Good A B C D E
 Based on the above information

Accepted Answer

A)   there is no trade-off between smartphones and tablets.
B)   the opportunity cost of producing 30 instead of 20 smartphones is 120 tablets.
C)   the opportunity cost of producing 40 instead of 30 smartphones is 30 tablets.
D)   the opportunity cost of producing 90 instead of 50 tablets is 50 smartphones.E) B) and C)
F) A) and B)

Question 7

When two countries specialize in the production of different goods and trade with each other, it is most likely each country will

Accepted Answer

A)   export the goods in which it has a comparative advantage.
B)   export the goods in which it has an absolute advantage.
C)   import the goods in which it has a comparative advantage.
D)   import the goods in which it has an absolute advantage.E) A) and B)
F) None of the above

Question 8

Suppose you order a slice of pepperoni pizza and a soda at a shopping mall food court. What are examples of the opportunity costs of this decision?

Accepted Answer

The opportunity cost of an action is the...

Question 9

How can the concepts of opportunity costs, scarcity and choice be illustrated by the production possibilities curve?

Accepted Answer

The concept of opportunity cost is illus...

Question 10

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.E) All of the above
F) None of the above

Question 11

Which of the following would cause an economy to produce at a point inside its production possibilities curve?

Accepted Answer

A)   the efficient allocation of all factors of production
B)   population growth
C)   unemployment and an inefficient use of available resources
D)   capital accumulationE) A) and B)
F) B) and C)

Question 12

A man-made resource such as a building or a machine is an example of which resource?

Accepted Answer

A)   entrepreneurial ability
B)   labor
C)   physical capital
D)   human capitalE) None of the above
F) C) and D)

Question 13

-Refer to the above figure. The Law of Increasing Additional Costs applies in

Accepted Answer

A)   Panel A only.
B)   Panel B only.
C)   Panels A and B.
D)   neither Panel A nor B.E) A) and C)
F) All of the above

Question 14

It is not uncommon for people to say something like, "If we can put someone on the moon we should be able to . . . ," followed by the person's favorite project. What response can an economist make to this person?

Accepted Answer

Society must make choices, and when it c...

Question 15

The reason that most of the coffee that is consumed in the United States comes from Colombia is that

Accepted Answer

A)   Colombia has an absolute advantage in producing coffee relative to the United States.
B)   Colombia has a comparative advantage in producing coffee relative to the United States.
C)   coffee cannot be grown in the United States.
D)   government trade disincentives regarding Colombian coffee make such trade possible.E) All of the above
F) C) and D)

Question 16

The law of increasing additional cost occurs when

Accepted Answer

A)   there are always shortages in some goods.
B)   technology is not used.
C)   resources are not perfectly adaptable for alternative uses.
D)   there are always alternatives and it is costly to figure out which alternative is best.E) B) and D)
F) C) and D)

Question 17

-Refer to the above figure. Production at Point F

Accepted Answer

A)   is not attainable given the underlying assumptions of the production possibilities curve (PP
C)  .
B)   would not be desirable.
C)   can only be attained by giving up Point E.
D)   can be attained only if a society desired more goods and services.E) B) and C)
F) A) and D)

Question 18

In the above figure, the production of 75 ukuleles and 75 guitars is

Accepted Answer

A)   efficient production.
B)   inefficient production.
C)   impossible production.
D)   full employment production.E) B) and D)
F) B) and C)

Question 19

Suppose the current unemployment rate is 15 percent. If it rises to 20 percent

Accepted Answer

A)   the economy will move up along the production possibilities curve.
B)   the economy will move closer to the production possibilities curve.
C)   the production possibilities curve will shift inward.
D)   the economy will operate farther inside the production possibilities curve.E) A) and C)
F) A) and B)

Question 20

The existence of scarcity means that

Accepted Answer

A)   there are not enough resources to satisfy unlimited human wants.
B)   firms will increase their production to eliminate the scarcity.
C)   the government will step in to eliminate the scarcity.
D)   firms working with the government will allocate resources to eliminate the scarcity.E) B) and C)
F) A) and B)

Exam 2: Scarcity and the World of Trade-Offs

A man-made resource such as a building or a machine is an example of which resource?

Correct AnswerverifiedShow Answer

In the above figure, the production of 75 ukuleles and 75 guitars is

Correct AnswerverifiedShow Answer

-Refer to the above figure. Production at Point F

Correct AnswerverifiedShow Answer

The law of increasing additional cost occurs when

Correct AnswerverifiedShow Answer

Look at the following production possibilities table for smartphones and tablets. The table shows the maximum combination of smartphones and tablets of corn that can be produced, when all resources are fully employed. Production Possibilities Good A B C D E Based on the above information

Correct AnswerverifiedShow Answer

-Refer to the above figure. The Law of Increasing Additional Costs applies in

Correct AnswerverifiedShow Answer

The most basic concept of economics is

Correct AnswerverifiedShow Answer

Suppose the current unemployment rate is 15 percent. If it rises to 20 percent

Correct AnswerverifiedShow Answer

In economics, physical capital includes

Correct AnswerverifiedShow Answer

The reason that most of the coffee that is consumed in the United States comes from Colombia is that

Correct AnswerverifiedShow Answer

How can the concepts of opportunity costs, scarcity and choice be illustrated by the production possibilities curve?

Correct AnswerverifiedThe concept of opportunity cost is illus...View AnswerShow Answer

Opportunity cost is

Correct AnswerverifiedShow Answer

Why is it that all of our wants cannot be satisfied?

Correct AnswerverifiedShow Answer

It is not uncommon for people to say something like, "If we can put someone on the moon we should be able to . . . ," followed by the person's favorite project. What response can an economist make to this person?

Correct AnswerverifiedSociety must make choices, and when it c...View AnswerShow Answer

When two countries specialize in the production of different goods and trade with each other, it is most likely each country will

Correct AnswerverifiedShow Answer

Which of the following would cause an economy to produce at a point inside its production possibilities curve?

Correct AnswerverifiedShow Answer

Opportunity cost exists because

Correct AnswerverifiedShow Answer

Suppose you order a slice of pepperoni pizza and a soda at a shopping mall food court. What are examples of the opportunity costs of this decision?

Correct AnswerverifiedThe opportunity cost of an action is the...View AnswerShow Answer

The existence of scarcity means that

Correct AnswerverifiedShow Answer

Opportunity cost can best be defined as

Correct AnswerverifiedShow Answer

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The concept of opportunity cost is illus...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Society must make choices, and when it c...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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The opportunity cost of an action is the...
View Answer

Correct Answer
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Correct Answer
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