Question 1

A rightward (an outward)  shift of a nation's production possibilities curve could be caused by:

Accepted Answer

A)   a decrease in technology.
B)   an increase in resources.
C)   producing more consumer and fewer capital goods.
D)   a decline in the labor force's level of education and skills.

Question 2

Exhibit 2-18 Production possibilities curves 
-In Exhibit 2-18, the production possibilities curves for a country are shown for the years Year X and Year Y. Suppose this country was located at point A in Year X and point B in Year Y. This economy:

Accepted Answer

A)   is worse off in Year Y than in Year X.
B)   has stagnated production in this two year period.
C)   is more efficient in Year Y than in Year X.
D)   has shown growth between these two years.
E)   has higher unemployment in Year Y than in Year X.

Question 3

In economics, investment refers to the process of accumulating:

Accepted Answer

A)   capital goods.
B)   consumer goods.
C)   money.
D)   stocks and bonds.

Question 4

Which fundamental economic question is most closely related to the issues of income distribution and poverty?

Accepted Answer

A)   The What to Produce question.
B)   The Why to Produce question.
C)   The How to Produce question.
D)   The For Whom to Produce question.

Question 5

If some resources were used inefficiently, the economy would operate outside its production possibilities curve.

Accepted Answer

A) True 
 B)False

Question 6

The opportunity cost of watching television is:

Accepted Answer

A)   all of the alternative programs that appear on other stations.
B)   zero because there is no money expenditure involved.
C)   the alternative use of the time foregone by watching the program.
D)   zero if it benefits you.

Question 7

Which of the following correctly lists the three fundamental economic questions?

Accepted Answer

A)   If to produce? Why to produce? When to produce?
B)   If to produce? What to produce? How to produce?
C)   Why to produce? What to produce? How to produce?
D)   What to produce? How to produce? For whom to produce?

Question 8

Exhibit 2-6 Production possibilities curve data   A  B  C  D  E  F  Capital goods 15014012090500 Consume goods 020406080100\begin{array} { | l | r | r | r | r | r | r | } \hline & 	ext { A } & 	ext { B } & 	ext { C } & 	ext { D } & 	ext { E } &  { 	ext { F } } \\hline 	ext { Capital goods } & 150 & 140 & 120 & 90 & 50 & 0 \	ext { Consume goods } & 0 & 20 & 40 & 60 & 80 & 100 \\hline\end{array} Capital goods  Consume goods ​ A 1500​ B 14020​ C 12040​ D 9060​ E 5080​ F 0100​​ 
-In Exhibit 2-6, the concept of increasing opportunity costs is represented by the fact that:

Accepted Answer

A)   the quantity of capital goods produced must be less than 150.
B)   the quantity of consumer goods is constant for each change in the quantity of capital goods produced.
C)   greater amounts of capital goods must be sacrificed to produce each additional unit of consumer goods.
D)   the amount of consumer goods produced must be greater than zero.

Question 9

Exhibit 2-12 Production possibilities curve 
-In Exhibit 2-12, suppose an economy with the given production possibilities curve is currently located at point A in the figure. Which of the following statements is false?

Accepted Answer

A)   This economy could produce more of both capital and consumption goods.
B)   This economy is experiencing full employment.
C)   This economy could produce more capital goods while holding fixed the number of consumption goods produced.
D)   This economy could produce more consumption goods while holding fixed the number of capital goods produced.
E)   Not every resource in this economy is being utilized

Question 10

Assuming an economy is already experiencing full employment, then it must produce more consumer goods and fewer capital goods if it wishes to experience greater rates of economic growth over time.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following would be least likely to cause the production possibilities curve to shift outward?

Accepted Answer

A)   a decreased desire for leisure by workers in the economy.
B)   an invention that requires fewer resources to produce a good.
C)   a shift in consumer preferences that causes expansion in the output of one product and a decline in output of other products.
D)   an expansion in the man-made productive resources available to the economy as the result of a high rate of investment.

Question 12

Which of the following is true about the production possibilities curve when a technological progress occurs? The curve:

Accepted Answer

A)   shifts inwards to the left.
B)   becomes flatter at one end and steeper at the other end.
C)   becomes steeper.
D)   shifts outward to the right.
E)   does not change.

Question 13

Mikki decides to work five hours the night before her economics exam. She earns an extra $75, but her exam score is 10 points lower than it would have been had she stayed home and studied. Her opportunity cost is the:

Accepted Answer

A)   five hours she worked.
B)   $75 she earned.
C)   10 points she lost on her exam.
D)   time she could have spent watching television.
E)   guilt she feels about neglecting her economics studies.

Question 14

Exhibit 2-9 Production possibilities curve 
-Movement along this production possibilities curve shown in Exhibit 2-9 indicates:

Accepted Answer

A)   that labor is not equally productive or homogeneous (nonhomogeneous) .
B)   decreasing opportunity costs.
C)   all inputs are homogeneous.
D)   all of these.

Question 15

A source of economic growth is:

Accepted Answer

A)   unemployment.
B)   inefficiency.
C)   less resources.
D)   greater entrepreneurship.

Question 16

Compare two economies A and B that start out with identical production possibilities curves. Economy A chooses an efficient point with 6 consumption goods and 3 capital goods, while economy B also chooses an efficient point, but with 4 consumption goods and 5 capital goods. In the future we can predict:

Accepted Answer

A)   economy A will operate inefficiently.
B)   economy B will operate inefficiently.
C)   economy A and economy B will grow equally fast.
D)   economy A will grow faster than economy B.
E)   economy B will grow faster than economy A.

Question 17

Exhibit 2-7 Production possibilities curve 
-For the economy shown in Exhibit 2-7, which of the following is true when the economy is at point A?

Accepted Answer

A)   More cars are being produced than are needed.
B)   There must be resources that are not being used fully.
C)   Some car production must be forgone in order to produce more grain in the same period.
D)   Increased grain production would be impossible.

Question 18

Exhibit 2-13 Production possibilities curve 
-In Exhibit 2-13, point H is:

Accepted Answer

A)   achievable with today's resource base.
B)   not achievable today because the economy has not achieved full employment.
C)   not achievable today because the economy is not at its maximum point of efficiency.
D)   not achievable today because of waste.
E)   not achievable today because of inadequate production capacity.

Question 19

One source of economic growth is:

Accepted Answer

A)   producing inside the production possibilities curve.
B)   producing outside the production possibilities curve.
C)   increasing capital.
D)   discouraging profit-seeking entrepreneurs.

Question 20

A point outside a production possibilities curve reflects:

Accepted Answer

A)   efficiency.
B)   specialization.
C)   inefficiency.
D)   unemployment.
E)   an impossible choice.

Exam 2: Production Possibilities, Opportunity Cost, and Economic Growth

A source of economic growth is:

Correct Answer
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Exhibit 2-12 Production possibilities curve -In Exhibit 2-12, suppose an economy with the given production possibilities curve is currently located at point A in the figure. Which of the following statements is false?

Correct Answer
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Which of the following is true about the production possibilities curve when a technological progress occurs? The curve:

Correct Answer
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Correct Answer
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Which of the following correctly lists the three fundamental economic questions?

Correct Answer
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If some resources were used inefficiently, the economy would operate outside its production possibilities curve.

Correct Answer
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Exhibit 2-9 Production possibilities curve -Movement along this production possibilities curve shown in Exhibit 2-9 indicates:

Correct Answer
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Mikki decides to work five hours the night before her economics exam. She earns an extra $75, but her exam score is 10 points lower than it would have been had she stayed home and studied. Her opportunity cost is the:

Correct Answer
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The opportunity cost of watching television is:

Correct Answer
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Exhibit 2-7 Production possibilities curve -For the economy shown in Exhibit 2-7, which of the following is true when the economy is at point A?

Correct Answer
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Which fundamental economic question is most closely related to the issues of income distribution and poverty?

Correct Answer
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In economics, investment refers to the process of accumulating:

Correct Answer
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Which of the following would be least likely to cause the production possibilities curve to shift outward?

Correct Answer
verified

Assuming an economy is already experiencing full employment, then it must produce more consumer goods and fewer capital goods if it wishes to experience greater rates of economic growth over time.

Correct Answer
verified

Exhibit 2-13 Production possibilities curve -In Exhibit 2-13, point H is:

Correct Answer
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A point outside a production possibilities curve reflects:

Correct Answer
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Exhibit 2-18 Production possibilities curves -In Exhibit 2-18, the production possibilities curves for a country are shown for the years Year X and Year Y. Suppose this country was located at point A in Year X and point B in Year Y. This economy:

Correct Answer
verified

Correct Answer
verified

A rightward (an outward) shift of a nation's production possibilities curve could be caused by:

Correct Answer
verified

One source of economic growth is:

Correct Answer
verified

Exam 2: Production Possibilities, Opportunity Cost, and Economic Growth

A source of economic growth is:

Correct AnswerverifiedShow Answer

Exhibit 2-12 Production possibilities curve -In Exhibit 2-12, suppose an economy with the given production possibilities curve is currently located at point A in the figure. Which of the following statements is false?

Correct AnswerverifiedShow Answer

Which of the following is true about the production possibilities curve when a technological progress occurs? The curve:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following correctly lists the three fundamental economic questions?

Correct AnswerverifiedShow Answer

If some resources were used inefficiently, the economy would operate outside its production possibilities curve.

Correct AnswerverifiedShow Answer

Exhibit 2-9 Production possibilities curve -Movement along this production possibilities curve shown in Exhibit 2-9 indicates:

Correct AnswerverifiedShow Answer

Mikki decides to work five hours the night before her economics exam. She earns an extra $75, but her exam score is 10 points lower than it would have been had she stayed home and studied. Her opportunity cost is the:

Correct AnswerverifiedShow Answer

The opportunity cost of watching television is:

Correct AnswerverifiedShow Answer

Exhibit 2-7 Production possibilities curve -For the economy shown in Exhibit 2-7, which of the following is true when the economy is at point A?

Correct AnswerverifiedShow Answer

Which fundamental economic question is most closely related to the issues of income distribution and poverty?

Correct AnswerverifiedShow Answer

In economics, investment refers to the process of accumulating:

Correct AnswerverifiedShow Answer

Which of the following would be least likely to cause the production possibilities curve to shift outward?

Correct AnswerverifiedShow Answer

Assuming an economy is already experiencing full employment, then it must produce more consumer goods and fewer capital goods if it wishes to experience greater rates of economic growth over time.

Correct AnswerverifiedShow Answer

Exhibit 2-13 Production possibilities curve -In Exhibit 2-13, point H is:

Correct AnswerverifiedShow Answer

A point outside a production possibilities curve reflects:

Correct AnswerverifiedShow Answer

Exhibit 2-18 Production possibilities curves -In Exhibit 2-18, the production possibilities curves for a country are shown for the years Year X and Year Y. Suppose this country was located at point A in Year X and point B in Year Y. This economy:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A rightward (an outward) shift of a nation's production possibilities curve could be caused by:

Correct AnswerverifiedShow Answer

One source of economic growth is:

Correct AnswerverifiedShow Answer

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