Question 1

Inputs in production processes are called resources.

Accepted Answer

A) True 
 B)False

Question 2

Efficient production can be carried out anywhere on or below the production possibilities frontier.

Accepted Answer

A) True 
 B)False

Question 3

The idea of opportunity cost is relevant

Accepted Answer

A)   only in consumption decisions.
B)   only in production decisions.
C)   only in financial decisions.
D)   in almost any kind of decision.

Question 4

Being on the PPF implies that increasing the production of one good or service can only be accomplished by decreasing the quantity produced of another good or service.

Accepted Answer

A) True 
 B)False

Question 5

A point lying inside (under) a production possibilities curve indicates that

Accepted Answer

A)   the economy is saving money.
B)   there are no associated opportunity costs.
C)   more output could be produced with existing resources.
D)   technology limits production.

Question 6

Is faster economic growth unambiguously better?

Accepted Answer

A)   No,because growth has an opportunity cost.
B)   No,because growth serves no useful purpose.
C)   Yes,because more goods and services are always better.
D)   Yes,because it expands the production possibilities of an economy.
E)   Uncertain-economic growth has no answer to this question.

Question 7

In Table 3-2,from point C,the opportunity cost of 3 more units of cotton would be

Accepted Answer

A)   4 units of corn.
B)   8 units of corn.
C)   14 units of corn.
D)   16 units of corn.

Question 8

A decrease in the unemployment rate will shift the PPF outward from the origin.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is a listing of the types or categories of resources?

Accepted Answer

A)   land,labor,and capital
B)   land,labor,and education
C)   land,labor,and efficiency
D)   land,labor,and markets
E)   land,labor,and inputs

Question 10

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 11

If a farmer's opportunity cost of producing 50,000 bushels of wheat is 20,000 fewer bushels of soybeans,then her opportunity cost of producing 50,000 bushels of soybeans must also be 20,000 fewer bushels of wheat.

Accepted Answer

A) True 
 B)False

Question 12

Why might the money price for something be higher than the opportunity cost? Why might it be lower? Give an example of each to illustrate your answer.

Accepted Answer

Money price can be higher than opportuni...

Question 13

If the economy of Gwondanaland is growing more rapidly than the economy of Japan,most likely

Accepted Answer

A)   Japan has more current investment than Gwondanaland.
B)   Japan has more government spending than Gwondanaland.
C)   Japan spends more on capital goods than Gwondanaland.
D)   Gwondanaland has lower current consumption than Japan.
E)   Gwondanaland has lower current investment than Japan.

Question 14

The definition of efficiency implies that production is carried out on the production possibilities frontier.

Accepted Answer

A) True 
 B)False

Question 15

Voluntary exchange results in mutual gains.

Accepted Answer

A) True 
 B)False

Question 16

The principle of comparative advantage helps explain trade between nations.

Accepted Answer

A) True 
 B)False

Question 17

In a properly functioning economy,money costs approximate opportunity costs.

Accepted Answer

A) True 
 B)False

Question 18

Economic growth solves the problem of scarcity.

Accepted Answer

A) True 
 B)False

Question 19

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 20

Probably the most important source of efficiency in production is

Accepted Answer

A)   investing in more capital goods.
B)   consuming rationally.
C)   expanding the production possibilities frontier.
D)   increasing inputs of energy and raw materials.
E)   the specialization of labor.

Exam 3: The Fundamental Economic Problem Scarcity and Choice

Which of the following is a listing of the types or categories of resources?

Correct AnswerverifiedShow Answer

Voluntary exchange results in mutual gains.

Correct AnswerverifiedShow Answer

If the economy of Gwondanaland is growing more rapidly than the economy of Japan,most likely

Correct AnswerverifiedShow Answer

Is faster economic growth unambiguously better?

Correct AnswerverifiedShow Answer

In a properly functioning economy,money costs approximate opportunity costs.

Correct AnswerverifiedShow Answer

The idea of opportunity cost is relevant

Correct AnswerverifiedShow Answer

Efficient production can be carried out anywhere on or below the production possibilities frontier.

Correct AnswerverifiedShow Answer

In Table 3-2,from point C,the opportunity cost of 3 more units of cotton would be

Correct AnswerverifiedShow Answer

Being on the PPF implies that increasing the production of one good or service can only be accomplished by decreasing the quantity produced of another good or service.

Correct AnswerverifiedShow Answer

The principle of comparative advantage helps explain trade between nations.

Correct AnswerverifiedShow Answer

The definition of efficiency implies that production is carried out on the production possibilities frontier.

Correct AnswerverifiedShow Answer

Economic growth solves the problem of scarcity.

Correct AnswerverifiedShow Answer

Inputs in production processes are called resources.

Correct AnswerverifiedShow Answer

Opportunity costs exist for

Correct AnswerverifiedShow Answer

Why might the money price for something be higher than the opportunity cost? Why might it be lower? Give an example of each to illustrate your answer.

Correct AnswerverifiedMoney price can be higher than opportuni...View AnswerShow Answer

If a farmer's opportunity cost of producing 50,000 bushels of wheat is 20,000 fewer bushels of soybeans,then her opportunity cost of producing 50,000 bushels of soybeans must also be 20,000 fewer bushels of wheat.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A decrease in the unemployment rate will shift the PPF outward from the origin.

Correct AnswerverifiedShow Answer

Probably the most important source of efficiency in production is

Correct AnswerverifiedShow Answer

A point lying inside (under) a production possibilities curve indicates that

Correct AnswerverifiedShow Answer

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Money price can be higher than opportuni...
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