Question 1

Any point on the production possibilities curve illustrates:

Accepted Answer

A)   minimum production combinations.
B)   maximum production combinations.
C)   economic growth.
D)   a nonfeasible production combination.E) None of the above
F) C) and D)

Question 2

Just before class,Jim tells Stuart,"Stuart,you shouldn't skip class today because you have paid tuition to enroll in the class." Stuart ignores Jim's advice,and instead makes the decision of whether to attend based on the importance to his grade that he feels he'd be missing that day in class relative to his value of the extra time he could have to finish the video game he is playing.To an economist,Stuart is:

Accepted Answer

A)   using marginal analysis.
B)   ignoring the total value of attending class.
C)   ignoring the concept of opportunity cost.
D)   irresponsible.E) None of the above
F) A) and D)

Question 3

The process of accumulating capital is called:

Accepted Answer

A)   capitalization.
B)   loanable funds.
C)   investment.
D)   debt management.E) B) and C)
F) All of the above

Question 4

When the production possibilities curve is bowed out,resources are:

Accepted Answer

A)   equally well-suited to production of both goods.
B)   not being used efficiently.
C)   not equally suited to the production of both types of goods.
D)   increasing as more of one good is produced.
E)   of an inferior quality.F) B) and D)
G) All of the above

Question 5

If an economy is operating at a point inside the production possibilities curve,

Accepted Answer

A)   its resources are not being used efficiently.
B)   the curve will begin to shift inward.
C)   the curve will begin to shift outward.
D)   This is a trick question because an economy cannot produce at a point inside the curve.E) A) and D)
F) A) and C)

Question 6

Which of the following will be most likely to cause the production possibilities curve for a country to shift inward?

Accepted Answer

A)   an increase in the labor force
B)   an increase in unemployment
C)   development of an improved technological method of production
D)   a decrease in the stock of physical capitalE) None of the above
F) B) and C)

Question 7

The production possibilities curve shows different combinations of goods that:

Accepted Answer

A)   can be consumed by households.
B)   can be consumed by firms.
C)   can be produced with the available technology.
D)   are produced and consumed by firms.
E)   are bought and sold in the market.F) All of the above
G) A) and E)

Question 8

Exhibit 2-10 Production possibilities curve data
 
-Suppose an economy is faced with the production possibilities table shown in Exhibit 2-10.The first unit of capital goods will cost the economy ____ units of consumption goods.

Accepted Answer

A)   25
B)   2
C)   1
D)   23
E)   11F) C) and D)
G) None of the above

Question 9

Investment in capital accumulation,as well as investment in education and other labor productivity enhancing programs,are necessary for economic growth.

Accepted Answer

A) True 
 B)False

Question 10

Every economic choice has an opportunity cost.

Accepted Answer

A) True 
 B)False

Question 11

The production possibilities curve shows that:

Accepted Answer

A)   some of one good must be given up to get more of another good in an economy that is operating efficiently.
B)   no output combination is impossible.
C)   an economy that is operating efficiently can have more of one good without giving up some of another good.
D)   scarcity can be eliminated.E) None of the above
F) A) and B)

Question 12

On the production possibilities curve,a movement between points that yields a loss of one good in order to raise the output of another good will maintain efficient production.

Accepted Answer

A) True 
 B)False

Question 13

People in poor countries may have difficulties achieving economic growth because:

Accepted Answer

A)   their production possibilities curves slope upward instead of downward.
B)   they must cut back on current consumption to increase capital goods.
C)   they have a solid consumption base already in place.
D)   their resource bases are fully developed.
E)   the law of increasing costs makes it hard to produce more goods.F) B) and E)
G) D) and E)

Question 14

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.E) None of the above
F) All of the above

Question 15

If more of one good can be produced without producing less of another output,the economy must have been operating efficiently.

Accepted Answer

A) True 
 B)False

Question 16

An analysis of production possibilities curves indicates that the reason why underdeveloped nations have difficulties increasing their economic growth rates is because:

Accepted Answer

A)   low population growth rates mean fewer workers to produce food and other necessities.
B)   their production possibilities curves shift in when resources are increased.
C)   their production possibilities curves are positively sloped, unlike those in more developed economies.
D)   they must cut back their already meager consumption levels to increase capital production.
E)   the opportunity cost of shifting resources from consumption goods to capital goods is relatively low.F) C) and D)
G) A) and E)

Question 17

The principle that the opportunity cost increases as the production of one output expands along the production possibilities curve is the:

Accepted Answer

A)   law of increasing opportunity costs.
B)   law of demand.
C)   law of supply.
D)   law of diminishing returns.E) A) and B)
F) A) and C)

Question 18

Given a production possibilities curve,a point:

Accepted Answer

A)   inside the curve represents unemployment.
B)   on the curve represents full employment.
C)   outside the curve is currently unattainable.
D)   all of the above.E) A) and B)
F) A) and C)

Question 19

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.F) A) and B)
G) B) and C)

Question 20

Exhibit 2-11 Production possibilities curves
 
-In Exhibit 2-11,which of the following could have caused the production possibilities curve to shift from the one labeled B to the one labeled A?

Accepted Answer

A)   A major natural disaster.
B)   An increase in resources.
C)   An advance in technology.
D)   A decrease in unemployment.
E)   An improvement in literacy.F) A) and B)
G) A) and D)

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

An analysis of production possibilities curves indicates that the reason why underdeveloped nations have difficulties increasing their economic growth rates is because:

Correct Answer
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People in poor countries may have difficulties achieving economic growth because:

Correct Answer
verified

Exhibit 2-10 Production possibilities curve data -Suppose an economy is faced with the production possibilities table shown in Exhibit 2-10.The first unit of capital goods will cost the economy ____ units of consumption goods.

Correct Answer
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Correct Answer
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When the production possibilities curve is bowed out,resources are:

Correct Answer
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Investment in capital accumulation,as well as investment in education and other labor productivity enhancing programs,are necessary for economic growth.

Correct Answer
verified

The opportunity cost of watching television is:

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
verified

On the production possibilities curve,a movement between points that yields a loss of one good in order to raise the output of another good will maintain efficient production.

Correct Answer
verified

The production possibilities curve shows different combinations of goods that:

Correct Answer
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If more of one good can be produced without producing less of another output,the economy must have been operating efficiently.

Correct Answer
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Given a production possibilities curve,a point:

Correct Answer
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The production possibilities curve shows that:

Correct Answer
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Any point on the production possibilities curve illustrates:

Correct Answer
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Exhibit 2-11 Production possibilities curves -In Exhibit 2-11,which of the following could have caused the production possibilities curve to shift from the one labeled B to the one labeled A?

Correct Answer
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Which of the following will be most likely to cause the production possibilities curve for a country to shift inward?

Correct Answer
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If an economy is operating at a point inside the production possibilities curve,

Correct Answer
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Every economic choice has an opportunity cost.

Correct Answer
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The principle that the opportunity cost increases as the production of one output expands along the production possibilities curve is the:

Correct Answer
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The process of accumulating capital is called:

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

An analysis of production possibilities curves indicates that the reason why underdeveloped nations have difficulties increasing their economic growth rates is because:

Correct AnswerverifiedShow Answer

People in poor countries may have difficulties achieving economic growth because:

Correct AnswerverifiedShow Answer

Exhibit 2-10 Production possibilities curve data -Suppose an economy is faced with the production possibilities table shown in Exhibit 2-10.The first unit of capital goods will cost the economy ____ units of consumption goods.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When the production possibilities curve is bowed out,resources are:

Correct AnswerverifiedShow Answer

Investment in capital accumulation,as well as investment in education and other labor productivity enhancing programs,are necessary for economic growth.

Correct AnswerverifiedShow Answer

The opportunity cost of watching television is:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

On the production possibilities curve,a movement between points that yields a loss of one good in order to raise the output of another good will maintain efficient production.

Correct AnswerverifiedShow Answer

The production possibilities curve shows different combinations of goods that:

Correct AnswerverifiedShow Answer

If more of one good can be produced without producing less of another output,the economy must have been operating efficiently.

Correct AnswerverifiedShow Answer

Given a production possibilities curve,a point:

Correct AnswerverifiedShow Answer

The production possibilities curve shows that:

Correct AnswerverifiedShow Answer

Any point on the production possibilities curve illustrates:

Correct AnswerverifiedShow Answer

Exhibit 2-11 Production possibilities curves -In Exhibit 2-11,which of the following could have caused the production possibilities curve to shift from the one labeled B to the one labeled A?

Correct AnswerverifiedShow Answer

Which of the following will be most likely to cause the production possibilities curve for a country to shift inward?

Correct AnswerverifiedShow Answer

If an economy is operating at a point inside the production possibilities curve,

Correct AnswerverifiedShow Answer

Every economic choice has an opportunity cost.

Correct AnswerverifiedShow Answer

The principle that the opportunity cost increases as the production of one output expands along the production possibilities curve is the:

Correct AnswerverifiedShow Answer

The process of accumulating capital is called:

Correct AnswerverifiedShow Answer

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