Question 1

Table 2.2
   Option ABCDE Amount $100$50$25$15$0\begin{array} { | l | l | l | l | l | l | } \hline 	ext { Option } & \mathrm { A } & \mathrm { B } & \mathrm { C } & \mathrm { D } & \mathrm { E } \\hline 	ext { Amount } & \$ 100 & \$ 50 & \$ 25 & \$ 15 & \$ 0 \\hline\end{array} Option  Amount ​A$100​B$50​C$25​D$15​E$0​​ 
-Refer to 2.2. You have $100 to spend and five options to choose from. What is the opportunity cost of choosing option C when you really wanted option B?

Accepted Answer

A)   $100
B)   $25 in terms of C.
C)   $50 in terms in terms of B
D)   the total value of all the options taken together
E)   the value of none of options if B were chosen

Question 2

A downward-sloping straight-line production possibilities frontier indicates _____

Accepted Answer

A)   that society cannot decide which good it prefers.
B)   an absence of scarcity.
C)   a constant opportunity cost.
D)   that labor is inefficient.
E)   that labor is specialized.

Question 3

A production possibilities frontier can shift outward for all of the following reasons except _____

Accepted Answer

A)   a decrease in the size of the labor force.
B)   an increase in population.
C)   an improvement in technology.
D)   a larger work force.
E)   a larger capital stock.

Question 4

The Sultan of Brunei, one of the world's richest people, does not face the problem of scarcity.

Accepted Answer

A) True 
 B)False

Question 5

A command economy that is now allowing for a role for markets is known as a _____

Accepted Answer

A)   traditional system.
B)   transitional system.
C)   pure command system.
D)   mixed system.
E)   pure capitalism system.

Question 6

Exhibit 2.5
​

-Refer to Exhibit 2.5, which shows the production possibilities frontier for capital goods and consumer goods. Which of the graphs given best illustrates the impact on the production possibilities frontier of a technological improvement that will make the use of the resources used to produce consumer goods more efficient?

Accepted Answer

A)   a
B)   b
C)   c
D)   d
E)   b and d

Question 7

_____ is the value of the best alternative forgone when an item or activity is chosen.

Accepted Answer

A)   The choice cost
B)   The opportunity cost
C)   The direct cost
D)   The implicit cost
E)   The explicit cost

Question 8

At all points along the production possibilities frontier, _____

Accepted Answer

A)   the greatest achievable output levels are produced.
B)   resources are not fully employed.
C)   more of one good can be obtained without giving up more of the other.
D)   more efficient output levels are possible.
E)   society is equally well off.

Question 9

Exhibit 2.2
​ 
-Refer to Exhibit 2.2, which shows the production possibilities frontier for Good A and Good B. When moving from point f to point g, the production of _____

Accepted Answer

A)   Good B increases without a change in the production of Good A.
B)   Good A increases without a change in the production of Good B.
C)   both Good A and Good B increases.
D)   both Good A and Good B decreases.
E)   Good B increases and the production of Good A decreases.

Question 10

Table 2.3
   Table 2.3 Products  A  B  C  D  E  Capital goods 01234 Consumer  goods 40352070\begin{array}{l}	ext { Table } 2.3\\begin{array} { | l | l | l | l | l | l | } \hline 	ext { Products } & 	ext { A } & 	ext { B } & 	ext { C } & 	ext { D } & 	ext { E } \\hline 	ext { Capital goods } & 0 & 1 & 2 & 3 & 4 \\hline \begin{array} { l } 	ext { Consumer } \	ext { goods }\end{array} & 40 & 35 & 20 & 7 & 0 \\hline\end{array}\end{array} Table 2.3 Products  Capital goods  Consumer  goods ​​ A 040​ B 135​ C 220​ D 37​ E 40​​​ 
-Refer to Table 2.3, which shows the production possibilities frontier between the production of capital goods and consumer goods in an economy. What is the opportunity cost of producing 3 units of capital goods at point D?

Accepted Answer

A)   35 units of capital goods.
B)   13 units of consumer goods.
C)   7 units of consumer goods.
D)   15 units of consumer goods.
E)   5 units of consumer goods.

Question 11

Opportunity costs exist because _____

Accepted Answer

A)   technology is fixed.
B)   of comparative advantage.
C)   resources are scarce but wants are unlimited.
D)   the value of lost opportunities varies.
E)   of costs.

Question 12

Which of the following provides the best evidence of the specialization of labor?

Accepted Answer

A)   a firm that produces a line of related products, such as eight kinds of breakfast cereal
B)   an architect who is willing to practice in only one geographic area
C)   a physician who practices cardiology and orthopedic surgery
D)   a family that eats at Wendy's every Thursday night
E)   a retailer who sells goods but does not provide services

Question 13

On a given production possibilities frontier, which of the following is not assumed to be fixed?

Accepted Answer

A)   the amount of labor available
B)   the amount of capital available
C)   the level of technology
D)   the amount of land and natural resources available
E)   the amount of goods produced

Question 14

When drawing a production possibilities frontier for two goods, all of the following are usually assumed, except for one. Which of the following is the exception?

Accepted Answer

A)   The quantity of resources is rapidly growing.
B)   Technology is fixed.
C)   Resources can be shifted from the production of one good to the other.
D)   The production possibilities frontier is drawn for a particular time period.
E)   Resources are fully and efficiently employed.

Question 15

An improvement in the technology used to produce goods would _____

Accepted Answer

A)   enable an economy to produce outside its original production possibilities frontier.
B)   enable an economy to move along its original production possibilities frontier.
C)   eliminate scarcity, and the production possibilities frontier would no longer exist.
D)   have no effect on the production possibilities frontier.
E)   change the production possibilities frontier to a line with a positive slope.

Question 16

Barter is _____

Accepted Answer

A)   illegal in the United States.
B)   an efficient system of exchange.
C)   most useful when there is much specialization and international trade.
D)   only possible if money is used as a medium of exchange.
E)   the direct exchange of goods without the use of money.

Question 17

Table 2.2
   Option ABCDE Amount $100$50$25$15$0\begin{array} { | l | l | l | l | l | l | } \hline 	ext { Option } & \mathrm { A } & \mathrm { B } & \mathrm { C } & \mathrm { D } & \mathrm { E } \\hline 	ext { Amount } & \$ 100 & \$ 50 & \$ 25 & \$ 15 & \$ 0 \\hline\end{array} Option  Amount ​A$100​B$50​C$25​D$15​E$0​​ 
-Refer to Table 2.2. You have $100 to spend and five options to choose from. What is the opportunity cost if you spent all the $100?

Accepted Answer

A)   $100
B)   $50 in terms of D
C)   $15 in terms in terms of B
D)   the total value of all the options
E)   the value of the option given up if A were not chosen

Question 18

Inefficiency is a flaw of a command economy because there is less incentive for resources to flow to their highest-valued uses.

Accepted Answer

A) True 
 B)False

Question 19

A major distinguishing feature between capitalist and socialist (or command)  economies is that _____

Accepted Answer

A)   the average citizen is wealthy in capitalist economies, whereas the average citizen is poor in socialist economies.
B)   decision making is decentralized in socialist economies, while decision making is centralized in capitalist economies.
C)   resources are privately owned in capitalist economies, whereas private property rights are enforced in command economies.
D)   resources are publicly owned in capitalist economies, whereas resources are privately owned in command economies.
E)   decision making is decentralized under capitalism, while decision making is centralized in command economies.

Question 20

Table 2.3
   Table 2.3 Products  A  B  C  D  E  Capital goods 01234 Consumer  goods 40352070\begin{array}{l}	ext { Table } 2.3\\begin{array} { | l | l | l | l | l | l | } \hline 	ext { Products } & 	ext { A } & 	ext { B } & 	ext { C } & 	ext { D } & 	ext { E } \\hline 	ext { Capital goods } & 0 & 1 & 2 & 3 & 4 \\hline \begin{array} { l } 	ext { Consumer } \	ext { goods }\end{array} & 40 & 35 & 20 & 7 & 0 \\hline\end{array}\end{array} Table 2.3 Products  Capital goods  Consumer  goods ​​ A 040​ B 135​ C 220​ D 37​ E 40​​​ 
-Refer to Table 2.3, which shows the production possibilities frontier between the production of capital goods and consumer goods in an economy. Moving from D to B means _____

Accepted Answer

A)   1 unit of capital goods is given up for 7 units of consumer goods.
B)   2 units of capital goods are given up for 13 units of consumer goods.
C)   1 unit of capital goods is given up for 13 units of consumer goods.
D)   2 units of capital goods are given up for 28 units of consumer goods.

Exam 2: Economic Tools and Economic Systems.

Inefficiency is a flaw of a command economy because there is less incentive for resources to flow to their highest-valued uses.

Correct Answer
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At all points along the production possibilities frontier, _____

Correct Answer
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Correct Answer
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Exhibit 2.2 -Refer to Exhibit 2.2, which shows the production possibilities frontier for Good A and Good B. When moving from point f to point g, the production of _____

Correct Answer
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A downward-sloping straight-line production possibilities frontier indicates _____

Correct Answer
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Opportunity costs exist because _____

Correct Answer
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Correct Answer
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The Sultan of Brunei, one of the world's richest people, does not face the problem of scarcity.

Correct Answer
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A command economy that is now allowing for a role for markets is known as a _____

Correct Answer
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Barter is _____

Correct Answer
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A major distinguishing feature between capitalist and socialist (or command) economies is that _____

Correct Answer
verified

When drawing a production possibilities frontier for two goods, all of the following are usually assumed, except for one. Which of the following is the exception?

Correct Answer
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An improvement in the technology used to produce goods would _____

Correct Answer
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On a given production possibilities frontier, which of the following is not assumed to be fixed?

Correct Answer
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Correct Answer
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Correct Answer
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_____ is the value of the best alternative forgone when an item or activity is chosen.

Correct Answer
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A production possibilities frontier can shift outward for all of the following reasons except _____

Correct Answer
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Correct Answer
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Which of the following provides the best evidence of the specialization of labor?

Correct Answer
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Exam 2: Economic Tools and Economic Systems.

Inefficiency is a flaw of a command economy because there is less incentive for resources to flow to their highest-valued uses.

Correct AnswerverifiedShow Answer

At all points along the production possibilities frontier, _____

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Exhibit 2.2 ​ -Refer to Exhibit 2.2, which shows the production possibilities frontier for Good A and Good B. When moving from point f to point g, the production of _____

Correct AnswerverifiedShow Answer

A downward-sloping straight-line production possibilities frontier indicates _____

Correct AnswerverifiedShow Answer

Opportunity costs exist because _____

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The Sultan of Brunei, one of the world's richest people, does not face the problem of scarcity.

Correct AnswerverifiedShow Answer

A command economy that is now allowing for a role for markets is known as a _____

Correct AnswerverifiedShow Answer

Barter is _____

Correct AnswerverifiedShow Answer

A major distinguishing feature between capitalist and socialist (or command) economies is that _____

Correct AnswerverifiedShow Answer

When drawing a production possibilities frontier for two goods, all of the following are usually assumed, except for one. Which of the following is the exception?

Correct AnswerverifiedShow Answer

An improvement in the technology used to produce goods would _____

Correct AnswerverifiedShow Answer

On a given production possibilities frontier, which of the following is not assumed to be fixed?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

_____ is the value of the best alternative forgone when an item or activity is chosen.

Correct AnswerverifiedShow Answer

A production possibilities frontier can shift outward for all of the following reasons except _____

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following provides the best evidence of the specialization of labor?

Correct AnswerverifiedShow Answer

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Exhibit 2.2 -Refer to Exhibit 2.2, which shows the production possibilities frontier for Good A and Good B. When moving from point f to point g, the production of _____

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