Question 1

John has decided to view the solar eclipse tomorrow.The eclipse is an example of

Accepted Answer

A)  a good.
B)  an economic good.
C)  a service.
D)  entrepreneurship.E) A) and D)
F) A) and C)

Question 2

To an economist,the term "needs"

Accepted Answer

A)  means the purchase of necessary goods.
B)  is objectively undefinable.
C)  identifies the purchases of basic goods and services.
D)  refers to the purchase of goods by the poor.E) B) and C)
F) All of the above

Question 3

Scarcity refers to

Accepted Answer

A)  the ability of society to employ all of its resources.
B)  the ability of society to consume all that it produces.
C)  the inability of society to satisfy all human wants because of limited resources.
D)  the inability of society to eliminate poverty.E) None of the above
F) A) and C)

Question 4

The difference between scarcity and a shortage is that

Accepted Answer

A)  scarcity is caused by poverty and shortages are caused by natural disasters.
B)  shortages are a type of scarcity caused by natural disasters while scarcity is caused by human errors.
C)  scarcity always is a part of human life while shortages usually are temporary.
D)  shortages are always part of human life while scarcity is usually temporary.E) A) and B)
F) None of the above

Question 5

The discovery of new natural resources will cause

Accepted Answer

A)  the economy to move closer to the production possibilities curve.
B)  the production possibilities curve to shift up and to the right.
C)  an upward movement along the curve.
D)  the curve to shift back and to the left.E) All of the above
F) A) and D)

Question 6

Briefly explain the factors of production and give an example of each.

Accepted Answer

The resources,which are the inputs used ...

Question 7

There are not enough of four goods to satisfy the wants of people.For good A,this is true when the price is $100.This is true for good B at a price of $10,for good C at a price of $1,and for good D at a price of zero.Which situation reflects scarcity rather than shortage?

Accepted Answer

A)  A
B)  B
C)  C
D)  DE) A) and C)
F) All of the above

Question 8

Extremely cold winter weather has destroyed oranges in Florida.The freeze has caused

Accepted Answer

A)  scarcity because there are less oranges now than people want.
B)  scarcity because people have to switch to other types of citrus fruits.
C)  a shortage because people cannot obtain as many oranges as they wish to buy at the pre-freeze price.
D)  a shortage because the orange growers will have less income.E) B) and D)
F) B) and C)

Question 9

If all resources were perfectly adaptable for alternative uses,the production possibilities curve would

Accepted Answer

A)  be bowed out.
B)  be bowed in.
C)  be a straight line.
D)  not exist.E) All of the above
F) B) and C)

Question 10

Which of the following activities are production?

Accepted Answer

A)  Combining flour,milk,and eggs to make cookies.
B)  Moving coal from southern Illinois to an electrical power plant in northern Illinois.
C)  Taking ice cubes from a tray to put in a drink.
D)  All of the above are production.E) All of the above
F) C) and D)

Question 11

-According to the concept of comparative advantage,a good should be produced in that nation in which

Accepted Answer

A)  domestic opportunity cost is greatest.
B)  domestic opportunity cost is the smallest.
C)  money is used.
D)  terms of trade are maximized.E) A) and B)
F) B) and C)

Question 12

The reason the production possibilities curve is bowed outward (concave) is

Accepted Answer

A)  the law of increasing additional cost.
B)  that technology is constantly changing.
C)  that the number of resources is increasing.
D)  that the economy has more capital goods than entrepreneurial effort.E) A) and B)
F) B) and C)

Question 13

Comparative advantage is the ability to

Accepted Answer

A)  perform an activity at a lower opportunity cost.
B)  determine who your best trading partners are.
C)  determine the best use of capital goods.
D)  convince others of the best choices to make in their own self-interest.E) B) and C)
F) A) and D)

Question 14

The above table shows the daily production possibilities for a bakery.
Currently the bakery bakes 60 pizzas and 180 loaves of bread,that is-it is at alternative C.
-Using the above table,what is the opportunity cost of moving from alternative C to alternative B?

Accepted Answer

A)  1/2 a pizza pie
B)  60 pizza pies
C)  90 pizza pies
D)  30 pizza piesE) A) and B)
F) A) and C)

Question 15

-Refer to the above figure.How do you describe what is happening as the economy moves from point A to point C?

Accepted Answer

A)  The economy has acquired new resources that are well suited for producing bread.
B)  Land that was once used to graze sheep is now being used to grow wheat.
C)  Resources are becoming unemployed.
D)  The technology for growing wheat has improved.E) None of the above
F) C) and D)

Question 16

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.E) A) and B)
F) B) and D)

Question 17

Economic growth is shown by

Accepted Answer

A)  a point near the top of the production possibilities curve.
B)  a point outside the production possibilities curve.
C)  an inward shift of the production possibilities curve.
D)  an outward shift of the production possibilities curve.E) B) and D)
F) None of the above

Question 18

-In the above figure,the opportunity cost of moving from point A to point C is

Accepted Answer

A)  50 guitars.
B)  0 guitars.
C)  25 guitars.
D)  50 ukuleles.E) A) and B)
F) A) and D)

Question 19

-Refer to the above figure.If the farmer is growing 8,000 bushels of beans and 8,000 bushels of wheat,then we know that

Accepted Answer

A)  the farmer is not using resources efficiently.
B)  the farmer is using more land for wheat than for beans.
C)  the farmer should increase the amount of wheat grown and reduce the amount of beans.
D)  the farmer cannot be using the amount of land that was used to construct the curve.E) A) and C)
F) B) and C)

Question 20

-In the above figure,the opportunity cost of moving from point D to point C is

Accepted Answer

A)  20 guitars.
B)  50 ukuleles.
C)  55 guitars.
D)  25 ukuleles.E) A) and B)
F) C) and D)

Exam 2: Scarcity and the World of Trade-Offs

Comparative advantage is the ability to

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Which of the following activities are production?

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-Refer to the above figure.If the farmer is growing 8,000 bushels of beans and 8,000 bushels of wheat,then we know that

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John has decided to view the solar eclipse tomorrow.The eclipse is an example of

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-According to the concept of comparative advantage,a good should be produced in that nation in which

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Briefly explain the factors of production and give an example of each.

Correct AnswerverifiedThe resources,which are the inputs used ...View AnswerShow Answer

Economic growth is shown by

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Scarcity refers to

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The above table shows the daily production possibilities for a bakery. Currently the bakery bakes 60 pizzas and 180 loaves of bread,that is-it is at alternative C. -Using the above table,what is the opportunity cost of moving from alternative C to alternative B?

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-In the above figure,the opportunity cost of moving from point D to point C is

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To an economist,the term "needs"

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The discovery of new natural resources will cause

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There are not enough of four goods to satisfy the wants of people.For good A,this is true when the price is $100.This is true for good B at a price of $10,for good C at a price of $1,and for good D at a price of zero.Which situation reflects scarcity rather than shortage?

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-Refer to the above figure.How do you describe what is happening as the economy moves from point A to point C?

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Extremely cold winter weather has destroyed oranges in Florida.The freeze has caused

Correct AnswerverifiedShow Answer

-In the above figure,the opportunity cost of moving from point A to point C is

Correct AnswerverifiedShow Answer

The difference between scarcity and a shortage is that

Correct AnswerverifiedShow Answer

If all resources were perfectly adaptable for alternative uses,the production possibilities curve would

Correct AnswerverifiedShow Answer

Technology is best defined as

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The reason the production possibilities curve is bowed outward (concave) is

Correct AnswerverifiedShow Answer

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The resources,which are the inputs used ...
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