Question 1

If economic theories are solidly based on relevant facts, then there can be no question as to the character of appropriate economic policy.

Accepted Answer

A) True 
 B)False

Question 2

Which situation would most likely shift the production possibilities curve for a nation in an outward direction?

Accepted Answer

A)  a decrease in the quality of products
B)  an increase in the supply of resources
C)  a decrease in the state of technology
D)  an increase in the amount of discriminationE) B) and D)
F) A) and D)

Question 3

In the above diagram variables x and y are:

Accepted Answer

A)  both dependent variables.
B)  directly related.
C)  inversely related.
D)  unrelated.E) A) and D)
F) A) and C)

Question 4

An economic model is:

Accepted Answer

A)  a value judgment.
B)  a fact.
C)  built using theory.
D)  built on correlations.E) B) and C)
F) C) and D)

Question 5

A production possibilities curve illustrates:

Accepted Answer

A)  scarcity.
B)  market prices.
C)  consumer preferences.
D)  the distribution of income.E) B) and C)
F) All of the above

Question 6

The production possibilities curve illustrates the basic principle that:

Accepted Answer

A)  the production of more of any one good will in time require smaller and smaller sacrifices of other goods.
B)  an economy will automatically seek that level of output at which all of its resources are employed.
C)  if all the resources of an economy are in use, more of one good can be produced only if less of another good is produced.
D)  an economy's capacity to produce increases in proportion to its population size.E) All of the above
F) A) and C)

Question 7

Refer to the above production possibilities curves.Curve (a)  is the current curve for the economy.The movement from curve (a)  to curve (b)  suggests:

Accepted Answer

A)  a movement from unemployment to full employment.
B)  an improvement in capital goods technology but not in consumer goods technology.
C)  an improvement in consumer goods technology but not in capital goods technology.
D)  a decline in the total output of this society.E) All of the above
F) B) and D)

Question 8

In drawing a production possibilities curve we hold constant:

Accepted Answer

A)  the money supply.
B)  the consumer price index.
C)  both technology and resource supplies
D)  resource supplies only.E) None of the above
F) C) and D)

Question 9

Marginal costs exist because:

Accepted Answer

A)  the decision to produce more of some product means the sacrifice of other products.
B)  wants are scarce relative to resources.
C)  households and businesses make rational decisions.
D)  most decisions do not involve sacrifices or tradeoffs.E) C) and D)
F) All of the above

Question 10

Refer to the above diagram.Which line(s)  show(s)  a positive vertical intercept?

Accepted Answer

A)  A and D only
B)  B and C only
C)  A, D, and E
D)  A, D, and BE) A) and B)
F) C) and D)

Question 11

The future location of the economy's production possibilities curve will be affected by:

Accepted Answer

A)  the current division of domestic output between consumption and capital goods.
B)  the rate of technological progress.
C)  the growth of the economy's supplies of resources.
D)  all of the above.E) None of the above
F) B) and D)

Question 12

Certain inherently desirable products such as education and health care should be produced so long as resources are available.

Accepted Answer

A) True 
 B)False

Question 13

Choices are usually made at the margin, is which of the ten key concepts to retain for a lifetime?

Accepted Answer

A)  Facing trade-offs
B)  Interest Expense
C)  Marginal analysis
D)  The influence of incentivesE) All of the above
F) B) and D)

Question 14

How is the economic perspective reflected in lines for fast food?

Accepted Answer

A)  Customers select the shortest line because they have perfect information.
B)  Customers select the shortest line because they believe it will reduce their time cost of obtaining food.
C)  Lines will typically be of unequal length because of the inefficiencies in counter service.
D)  The set of food choices is often too complex for most customers and thus creates long lines.E) None of the above
F) C) and D)

Question 15

Some agricultural sub-Saharan nations of Africa have over-farmed and overgrazed their land to the extent that significant portions of it have turned into desert.This suggests that:

Accepted Answer

A)  the concavity of the production possibilities curves of such nations has increased.
B)  the production possibilities curves of such nations have shifted inward.
C)  the production possibilities curves of such nations have shifted outward.
D)  these nations are operating at some point outside of their production possibilities curves.E) A) and C)
F) None of the above

Question 16

When economists describe "a market," they mean:

Accepted Answer

A)  a place where stocks and bonds are traded.
B)  information networks that allow individuals to keep in touch with each other.
C)  a hypothetical place where the production of goods and services takes place.
D)  a mechanism which coordinates actions of consumers and producers to establish equilibrium prices and quantities.E) A) and B)
F) A) and C)

Question 17

Refer to the production possibilities curves.The movement from curve (a) to curve (c) indicates an improvement in civilian goods technology but not in war goods technology.

Accepted Answer

A) True 
 B)False

Question 18

1/8, 1/6, 1/4, and ½ units of tractors. D) 1/2, 1/4, 1/6, and 1/8 units of tractors." class="answers-bank-image d-inline" rel="preload" > Refer to the above diagram.Starting at point E, the production of successive units of bread will cost:

Accepted Answer

A)  a constant 8 units of tractors.
B)  a constant 6 units of tractors.
C)  1/8, 1/6, 1/4, and ½ units of tractors.
D)  1/2, 1/4, 1/6, and 1/8 units of tractors.E) All of the above
F) B) and D)

Question 19

Production possibilities tables for two countries, North Cantina and South Cantina: North Cantina Production possibilities (alternatives) 
 South Cantina Production possibilities (alternatives) 
 Refer to the above tables.Suppose that resources in North Cantina and South Cantina are identical in quantity and quality.We can conclude that:

Accepted Answer

A)  South Cantina has better technology than North Cantina in producing both capital and consumer goods.
B)  North Cantina has better technology than South Cantina in producing both capital and consumer goods.
C)  North Cantina is growing more rapidly than South Cantina.
D)  North Cantina has better technology than South Cantina in producing consumer goods.E) A) and B)
F) None of the above

Question 20

The "economic perspective" entails:

Accepted Answer

A)  rational behaviour by individuals and institutions.
B)  a comparison of marginal benefits and marginal costs in decision making.
C)  the altering of behaviour when marginal benefits and marginal costs change.
D)  all of the above.E) A) and D)
F) B) and C)

Exam 1: B: Limits, Alternatives, and Choices

A production possibilities curve illustrates:

Correct Answer
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Marginal costs exist because:

Correct Answer
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Correct Answer
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If economic theories are solidly based on relevant facts, then there can be no question as to the character of appropriate economic policy.

Correct Answer
verified

Refer to the above production possibilities curves.Curve (a) is the current curve for the economy.The movement from curve (a) to curve (b) suggests:

Correct Answer
verified

The production possibilities curve illustrates the basic principle that:

Correct Answer
verified

The future location of the economy's production possibilities curve will be affected by:

Correct Answer
verified

Choices are usually made at the margin, is which of the ten key concepts to retain for a lifetime?

Correct Answer
verified

How is the economic perspective reflected in lines for fast food?

Correct Answer
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In drawing a production possibilities curve we hold constant:

Correct Answer
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When economists describe "a market," they mean:

Correct Answer
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Refer to the production possibilities curves.The movement from curve (a) to curve (c) indicates an improvement in civilian goods technology but not in war goods technology.

Correct Answer
verified

Refer to the above diagram.Which line(s) show(s) a positive vertical intercept?

Correct Answer
verified

The "economic perspective" entails:

Correct Answer
verified

Some agricultural sub-Saharan nations of Africa have over-farmed and overgrazed their land to the extent that significant portions of it have turned into desert.This suggests that:

Correct Answer
verified

In the above diagram variables x and y are:

Correct Answer
verified

Which situation would most likely shift the production possibilities curve for a nation in an outward direction?

Correct Answer
verified

Refer to the above diagram.Starting at point E, the production of successive units of bread will cost:

Correct Answer
verified

Certain inherently desirable products such as education and health care should be produced so long as resources are available.

Correct Answer
verified

An economic model is:

Correct Answer
verified

Exam 1: B: Limits, Alternatives, and Choices

A production possibilities curve illustrates:

Correct AnswerverifiedShow Answer

Marginal costs exist because:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If economic theories are solidly based on relevant facts, then there can be no question as to the character of appropriate economic policy.

Correct AnswerverifiedShow Answer

Refer to the above production possibilities curves.Curve (a) is the current curve for the economy.The movement from curve (a) to curve (b) suggests:

Correct AnswerverifiedShow Answer

The production possibilities curve illustrates the basic principle that:

Correct AnswerverifiedShow Answer

The future location of the economy's production possibilities curve will be affected by:

Correct AnswerverifiedShow Answer

Choices are usually made at the margin, is which of the ten key concepts to retain for a lifetime?

Correct AnswerverifiedShow Answer

How is the economic perspective reflected in lines for fast food?

Correct AnswerverifiedShow Answer

In drawing a production possibilities curve we hold constant:

Correct AnswerverifiedShow Answer

When economists describe "a market," they mean:

Correct AnswerverifiedShow Answer

Refer to the production possibilities curves.The movement from curve (a) to curve (c) indicates an improvement in civilian goods technology but not in war goods technology.

Correct AnswerverifiedShow Answer

Refer to the above diagram.Which line(s) show(s) a positive vertical intercept?

Correct AnswerverifiedShow Answer

The "economic perspective" entails:

Correct AnswerverifiedShow Answer

Some agricultural sub-Saharan nations of Africa have over-farmed and overgrazed their land to the extent that significant portions of it have turned into desert.This suggests that:

Correct AnswerverifiedShow Answer

In the above diagram variables x and y are:

Correct AnswerverifiedShow Answer

Which situation would most likely shift the production possibilities curve for a nation in an outward direction?

Correct AnswerverifiedShow Answer

Refer to the above diagram.Starting at point E, the production of successive units of bread will cost:

Correct AnswerverifiedShow Answer

Certain inherently desirable products such as education and health care should be produced so long as resources are available.

Correct AnswerverifiedShow Answer

An economic model is:

Correct AnswerverifiedShow Answer

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