Question 1

The division of productive activities among persons and regions so that no one individual or area is totally self-sufficient is known as

Accepted Answer

A)   advantage-taking.
B)   comparative value.
C)   specialization.
D)   outsourcing.E) B) and C)
F) A) and D)

Question 2

In the above figure, the opportunity cost of moving from producing 75 guitars and 25 ukuleles to producing 25 guitars and 75 ukuleles is

Accepted Answer

A)   25 guitars.
B)   75 ukuleles.
C)   25 ukuleles.
D)   50 guitars.E) A) and C)
F) C) and D)

Question 3

The opportunity cost of going to college for a student receiving a scholarship

Accepted Answer

A)   is the income that she would have earned if she did not go to college.
B)   is the risk of dropping out.
C)   is the expenses for food and clothing that she purchases while in college.
D)   is zero because she does not have to pay tuition.E) B) and D)
F) B) and C)

Question 4

One opportunity cost associated with going to college is

Accepted Answer

A)   purchasing text books.
B)   paying tuition.
C)   giving up employment possibilities while in college.
D)   paying for room, board, and other living expenses.E) B) and D)
F) All of the above

Question 5

How are scarcity, choice, and opportunity cost related?

Accepted Answer

Since resources are scarce, we cannot ha...

Question 6

A graphical representation which shows the trade-off that occurs when more of one output is obtained at the expense of another is called

Accepted Answer

A)   a scarcity curve.
B)   a production possibilities curve.
C)   a growth curve.
D)   a supply curve.E) None of the above
F) All of the above

Question 7

Refer to the above figure. Which of the following points indicates an unobtainable point of production?

Accepted Answer

A)   a
B)   d
C)   e
D)   More information is needed to answer the question.E) A) and C)
F) All of the above

Question 8

If the production of capital goods is shown along the horizontal axis of a production possibilities curve, and the production of consumer goods is shown along the vertical axis of a production possibilities curve, and the economy desires to have a rapid rate of economic growth, then the economy should produce at a point

Accepted Answer

A)   near the middle of the curve dividing resources equally between the production of consumer and capital goods.
B)   at a point near the vertical axis concentrating on the production of consumer goods.
C)   at a point near the horizontal axis concentrating on the production of capital goods.
D)   at a point inside the curve allowing the economy to adjust rapidly to changes in economic activity.E) A) and B)
F) A) and C)

Question 9

The conversion of resources into consumer goods or services is called

Accepted Answer

A)   human capital.
B)   production.
C)   opportunity cost.
D)   consumption.E) All of the above
F) A) and C)

Question 10

When deriving the production possibilities curve, it is assumed that

Accepted Answer

A)   the amount of each good that is to be produced is fixed.
B)   the prices of resources are fixed along the curve.
C)   most resources can be used to produce only one good.
D)   resources are efficiently used.E) A) and B)
F) A) and C)

Question 11

Which of the following is an assumption used in deriving a production possibilities curve?

Accepted Answer

A)   Poverty always exists in society.
B)   The wages in an industry increase constantly.
C)   Prices will continue to increase.
D)   The amount of resources is fixed.E) B) and C)
F) None of the above

Question 12

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

Accepted Answer

A)   be bowed out.
B)   be a loop.
C)   be a straight line.
D)   not exist.E) A) and C)
F) A) and B)

Question 13

Using productive resources to make capital goods requires that we

Accepted Answer

A)   get everyone to agree on the best use of those resources.
B)   get government approval of our plan to make capital goods.
C)   forgo some level of current consumption.
D)   prove that the existence of the capital goods will not cause any environmental damage.E) All of the above
F) None of the above

Question 14

Which of the following is NOT an economic resource?

Accepted Answer

A)   company stock share
B)   low-skilled labor
C)   coal
D)   an economistE) All of the above
F) A) and D)

Question 15

-In the above figure, which of the following points indicates the efficient use of resources?

Accepted Answer

A)   a
B)   f
C)   g
D)   hE) B) and D)
F) None of the above

Question 16

Why do most people choose to specialize in a narrow set of skills for their work, rather than to learn a little bit about several varied fields of endeavor?

Accepted Answer

A)   They feel that doing so will minimize their chances of being unemployed.
B)   They don't correctly perceive the costs of being so specialized.
C)   It allows them to earn more income by being more productive.
D)   They are unaware of how much better off they would be if they diversified their skills.E) B) and C)
F) A) and D)

Question 17

A point outside a production possibilities curve indicates

Accepted Answer

A)   that resources are not being used efficiently.
B)   an output combination that society cannot attain given its current level of resources and technology.
C)   that resources are being used very efficiently.
D)   that both goods are characterized by increasing costs.E) None of the above
F) A) and D)

Question 18

Scarcity and shortages differ in that

Accepted Answer

A)   scarcity is caused by natural disasters and shortages are caused by mistakes people make.
B)   scarcity is a condition of human life while shortages are usually temporary phenomena related to an imbalance between the amount desired and the amount produced.
C)   scarcity is a type of shortage but shortage is a broader concept.
D)   shortages apply to resource markets while scarcity applies to product markets.E) A) and D)
F) A) and B)

Question 19

Which of the following would NOT allow society to move to point "h" in the above figure?

Accepted Answer

A)   an improvement in technology
B)   more efficient use of current resources
C)   an increase in quantity of labor
D)   an increase in quantity of capitalE) A) and C)
F) B) and C)

Question 20

A movement along the production possibilities curve would imply that

Accepted Answer

A)   the labor force has grown.
B)   productivity has increased.
C)   society has chosen a different set of outputs.
D)   productivity has declined because workers are demanding more leisure.E) A) and D)
F) All of the above

Exam 2: Scarcity and the World of Trade-Offs

Correct Answer
verified

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

Correct Answer
verified

Using productive resources to make capital goods requires that we

Correct Answer
verified

Why do most people choose to specialize in a narrow set of skills for their work, rather than to learn a little bit about several varied fields of endeavor?

Correct Answer
verified

A movement along the production possibilities curve would imply that

Correct Answer
verified

A point outside a production possibilities curve indicates

Correct Answer
verified

Which of the following is NOT an economic resource?

Correct Answer
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When deriving the production possibilities curve, it is assumed that

Correct Answer
verified

Which of the following is an assumption used in deriving a production possibilities curve?

Correct Answer
verified

One opportunity cost associated with going to college is

Correct Answer
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Which of the following would NOT allow society to move to point "h" in the above figure?

Correct Answer
verified

Refer to the above figure. Which of the following points indicates an unobtainable point of production?

Correct Answer
verified

How are scarcity, choice, and opportunity cost related?

Correct Answer
verified
Since resources are scarce, we cannot ha...
View Answer

-In the above figure, which of the following points indicates the efficient use of resources?

Correct Answer
verified

In the above figure, the opportunity cost of moving from producing 75 guitars and 25 ukuleles to producing 25 guitars and 75 ukuleles is

Correct Answer
verified

A graphical representation which shows the trade-off that occurs when more of one output is obtained at the expense of another is called

Correct Answer
verified

The opportunity cost of going to college for a student receiving a scholarship

Correct Answer
verified

Scarcity and shortages differ in that

Correct Answer
verified

The division of productive activities among persons and regions so that no one individual or area is totally self-sufficient is known as

Correct Answer
verified

The conversion of resources into consumer goods or services is called

Correct Answer
verified

Exam 2: Scarcity and the World of Trade-Offs

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Using productive resources to make capital goods requires that we

Correct AnswerverifiedShow Answer

Why do most people choose to specialize in a narrow set of skills for their work, rather than to learn a little bit about several varied fields of endeavor?

Correct AnswerverifiedShow Answer

A movement along the production possibilities curve would imply that

Correct AnswerverifiedShow Answer

A point outside a production possibilities curve indicates

Correct AnswerverifiedShow Answer

Which of the following is NOT an economic resource?

Correct AnswerverifiedShow Answer

When deriving the production possibilities curve, it is assumed that

Correct AnswerverifiedShow Answer

Which of the following is an assumption used in deriving a production possibilities curve?

Correct AnswerverifiedShow Answer

One opportunity cost associated with going to college is

Correct AnswerverifiedShow Answer

Which of the following would NOT allow society to move to point "h" in the above figure?

Correct AnswerverifiedShow Answer

Refer to the above figure. Which of the following points indicates an unobtainable point of production?

Correct AnswerverifiedShow Answer

How are scarcity, choice, and opportunity cost related?

Correct AnswerverifiedSince resources are scarce, we cannot ha...View AnswerShow Answer

-In the above figure, which of the following points indicates the efficient use of resources?

Correct AnswerverifiedShow Answer

In the above figure, the opportunity cost of moving from producing 75 guitars and 25 ukuleles to producing 25 guitars and 75 ukuleles is

Correct AnswerverifiedShow Answer

A graphical representation which shows the trade-off that occurs when more of one output is obtained at the expense of another is called

Correct AnswerverifiedShow Answer

The opportunity cost of going to college for a student receiving a scholarship

Correct AnswerverifiedShow Answer

Scarcity and shortages differ in that

Correct AnswerverifiedShow Answer

The division of productive activities among persons and regions so that no one individual or area is totally self-sufficient is known as

Correct AnswerverifiedShow Answer

The conversion of resources into consumer goods or services is called

Correct AnswerverifiedShow Answer

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Since resources are scarce, we cannot ha...
View Answer

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Correct Answer
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Correct Answer
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Correct Answer
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