For economists, the word "utility" means A.versatility and flexibility. |
C. Pleasure or satisfaction |
In economics, the pleasure, happiness, or satisfaction received from a product is called A.marginal cost. |
D. Utility |
When economists say that people act rationally in their self-interest, they mean that individuals A. look for and pursue opportunities to increase their utility. |
A. Look for and pursue opportunities to increase their utility |
According to Emerson: "Want is a growing giant whom the coat of Have was never large enough to cover." According to economists, "Want" exceeds "Have" because A. people are greedy. |
B. Productive resources are limited |
According to economists, economic self-interest A. is a reality that underlies economic behavior. |
A. is a reality that underlies economic behavior. |
1. Joe sold gold coins for $1,000 that he bought a year ago for $1,000. He says, "At least I didn’t lose any money on my financial investment." His economist friend points out that in effect he did lose money because he could have received a 3 percent return on the $1,000 if he had bought a bank certificate of deposit instead of the coins. A. opportunity costs. |
A. Opportunity Cost |
A person should consume more of something when its marginal A. benefit exceeds its marginal cost. |
A. Benefit exceeds the marginal cost |
Economics may best be defined as the A. interaction between macro and micro considerations. |
B. social science concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity |
The study of economics is primarily concerned with A. keeping private businesses from losing money. |
C. Choices that are made in seeking the best use of resources |
The economic perspective entails |
B. A comparison of marginal benefits and marginal costs in decision making |
Purposeful behavior suggests that A.everyone will make identical choices. |
C. Individuals may make different choices because of different desired outcomes |
Purposeful behavior means that A. people are selfish in their decision making. |
B. People weigh costs and benefits to make decisions |
Economies involves marginal analysis because A. most decisions involve changes from the present situation. |
A. Most decisions involve changes from the present situation |
You should decide to go to a movie IF A. if the marginal cost of the movie exceeds its marginal benefit. |
B. the marginal benefit of the movie exceeds its marginal costs |
Opportunity cost exists because A. the decision to engage in one activity means forgoing some other activity. |
A. the decision to engage in one activity means forgoing some other activity |
The assertion that "there is no free lunch" means that A. there are always trade-offs between economic goals. |
B. all production involves the use of scarce resources and thus the sacrifice of alternative goods. |
Consumers spend their incomes to get the maximum benefit or satisfaction from the goods and services they purchase. This is a reflection of A. resource scarcity and the necessity of choice. |
B. Purposeful behavior |
If someone produced too little of a good, this would suggest that A.rational choice cannot be applied to many economic decisions. |
D. The good was produced to the point when its marginal benefit exceeded its marginal cost. |
Even though local newspapers are very inexpensive, people rarely buy more than one of them each day. This fact A. is an example of irrational behavior. |
D. implies that, for most people, the marginal benefit of reading a second newspaper is less than the marginal cost. |
In deciding whether to study for an economic quiz or go to a concert, one is confronted by the idea of |
A. Scarcity and opportunity costs |
Which one of the following expressions best states the idea of opportunity cost? A. "A penny saved is a penny earned." |
C. "there is no such thing as free lunch" |
Suppose that a university decides to spend $1 million to upgrade personal computers and scientific equipment for faculty rather than spend $1 million to expand parking for students. This example illustrates A. distorted priorities. |
Opportunity Cost |
Which of the following closely relates to the idea of opportunity costs? A.marginal cost. |
A. Trade-Offs |
Economists contend the most economic decisions are A.random. |
Purposeful |
Alex sees that his neighbors’ lawns all need mowing. He offers to provide the service in exchange for a wage of $20 per hour. Some neighbors accept Alex’s offer and others refuse. Economists would describe Alex’s behavior as A. rational self-interest because he is attempting to increase his own income by identifying and satisfying someone else’s wants. |
A. rational self-interest because he is attempting to increase his own income by identifying and satisfying someone else’s wants. |
Kara was out jogging and, despite being tired, decided to run one more mile. Based on her actions, economists would conclude that Kara A. must be an avid runner. |
B. decided that the marginal benefit of running one more mile would outweigh the cost of the additional mile. |
An economic hypothesis A.has the same meaning as an economic principle or economic law. |
C. Is a possible explanation of cause and effect |
Which of the following terms implies the LEAST degree of confidence in an economic generalization? A. Hypothesis |
A. Hypothesis |
Which of he following terms implies the GREATEST degree of confidence in and economic generalization? A. Hypothesis |
C. Theory |
A well-tested economic theory is often called A. Hypothesis |
C. A principle |
The scientific method is A.not applicable to economics because economics deals with human beings. |
D. used by economists and other social scientists, as well as by physical scientists and life scientists, to formulate and test hypotheses. |
The process by which economists test hypotheses against facts to develop theories, principles, and models is called A. the economic perspective. |
B. The scientific method |
Economic theories are: A.are useless because they are not based on laboratory experimentation. |
C. are generalizations based on hypotheses tested and supported with observed facts. |
Which of the following is a CORRECT statement A. Economic concepts or laws that are valid during recessions are necessarily valid during prosperity. |
B. Although they are generalizations, economic laws are useful because they allow us to predict and therefore influence or adjust to events. |
In constructing models, economists A. make simplifying assumptions. |
A. Make simplifying assumptions |
The latin term "ceteris paribus" A.that if event A precedes event B, A has caused B. |
C. Other things equal |
The basic purpose of the other-things-eaul assumptions is to A. allow one to reason about the relationship between variables X and Y without the intrusion of variable Z. |
A. allow one to reason about the relationship between variables X and Y without the intrusion of variable Z. |
Suppose an economist says that "other things equal, the lower the price of bananas, the greater the amount of bananas purchased." This statement indicates that |
B. all factors other than the price of bananas (for example, consumer tastes and incomes) are assumed to be constant. |
The term "other things equal" means that A.the associated statement is normative. |
C. a number of relevant variables are assumed to be constant. |
Kelly works at an ice cream shop and observes that the number of people buying ice cream varies greatly from day to day. For a couple of weeks, she has recorded the number of people at the shop each day, as well as the daily temperature. If Kelly is using the scientific method to better understand ice cream buying habits, her next step A.conclude definitively that people buy more ice cream when the temperature rises. |
C. use the observed data to form a hypothesis about ice cream buying behavior. |
Rosa works at a gelato shop and observes that the number of people buying gelato varies greatly from day to day. For a couple of weeks, she has recorded the number of people at the shop each day, as well as the daily temperature, and has observed a positive relationship between temperature and the number of customers. Based on her observations, Rosa should |
B. determine if there are other relevant factors and attempt to hold these constant before drawing conclusions. |
Macroeconomics approaches the stud of economics from the viewpoint of A. the entire economy. |
A. the entire economy |
Which of the following is associated with macroeconomics? A. an examination of the incomes of professional athletes |
B. an empirical investigation of the general price level and unemployment rates since 1990 |
The issues of inflation, unemployment, and business cycles are A. major topics of macroeconomics. |
A. Major topics of macroeconomics |
Which of the following statements pertains to macroeconomics? A.Because the minimum wage was raised, Mrs. Olsen decided to enter the labor force. |
C. National income grew by 2.7% |
Macroeconomics can best be described as the A. analysis of how a consumer tries to spend income. |
B. Study of large aggregates of the economy or the economy as a whole. |
Microeconomics is concerned with A. the aggregate or total levels of income, employment, and output. |
B. a detailed examination of specific economic units that make up the economic system. |
Which of the following is a microeconomic statement? A.The real domestic output increased by 1.6 percent last year. |
C. The price of smartphones declined 2.8 percent last year. |
Which of the following statements is true? A. Microeconomics focuses on specific decision-making units of the economy; macroeconomics examines the economy as a whole. |
A.Microeconomics focuses on specific decision-making units of the economy; macroeconomics examines the economy as a whole. |
A normative statement is one that A. is based on the law of averages. |
D. Is based on value judgements |
A Positive statement is one that A.is derived by induction. |
D. Focuses on facts, descriptions and theoretical relationships |
Which of the following is a positive statement? A.A humidity level of 90 percent is too high. |
C. The temperature is 92 degrees today. |
Normative statements are concerned primarily with A. facts and theories. |
B. What ought to be |
A positive statement is concerned primarily with A.some goal that is desirable to society. |
C. What is |
"Economics is concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity." This statement is A. positive but incorrect. |
B. Positive and Correct |
Ben says that "an increase in the tax on beer will raise its price." Holly argues that "taxes should be increased on beer because college students drink too much." We can conclude that A. Positive and incorrect |
B. Positive and Correct |
"Macroeconomics is the part of economics concerned with individual units, such as a person, a household, a firm, or an industry." This statement is A. positive but incorrect. |
A. Positive but correct |
The economizing problem is: A. the need to make choices because economic wants exceed economic means. |
A. The need to make choices because economic wants exceed economic means |
The economizing problem is one of deciding how to make the best use of |
B. limited resources o satisfy virtually unlimited wants |
Scarcity |
B. Persists because economic wants exceeds available resources |
The alternative combination of two goods that a consumer can purchase with a specific money income is shown by |
D. A budget line |
The budget line shows A. the amount of product X that a consumer is willing to give up to obtain one more unit of product Y. |
B. All possible combination of two goods that can be purchased, given money income and the prices of the goods. |
Refer to the budget line shown in the diagram. If the consumer’s money income is $50, the A.prices of C and D cannot be determined. |
D. Price of C is $10 and the price of D is $5 |
Refer to the budget line shown in the diagram. Which of the following combinations of goods A. 4 units of C and 6 units of D |
A. 4 untis of C and 6 units of D |
Refer to the budget line shown in the diagram. The absolute value of the slope of the budget line is A.MUC / MUD. |
PC/PD |
Refer to the budget line. The absolute value of the slope of the budget line is: A. two. |
A. Two |
In moving along a given budget line: |
A. The prices of both products and money income are assumed to be constant |
An increase in money income A. shifts the consumer’s budget line to the right. |
A. Shifts the consumer’s budget line to the right |
The shift of the budget line from cd to ab in the figure is consistent with |
C. A decrease in money income |
Any combination of goods lying outside of the budget line A.implies that the consumer is not spending all of the consumer’s income. |
D. is unattainable, given the consumer’s income |
Suppose you have a money income of $10, all of which you spend on Coke and popcorn. In the diagram, the prices of Coke and popcorn, respectively, are A. $.50 and $1.00. |
A. $.50 and $1.00 |
Other things equal, an increase in a consumer’s money income A. increases the amount of utility a consumer receives from a given quantity of a good. |
B. Shifts the individual’s budget line rightward because she can now purchase more of both products. |
The slope of the budget line reflects the A. desirability of the two products. |
B. price ratio of the two products |
Suppose Elroy’s budget line is as shown on the diagram. If his tastes change in favor of Coke and against popcorn, the budget line will A.become steeper. |
D. Be unaffected |
Assume the price of product Y (the quantity of which is on the vertical axis) is $15 and the price of product X (the quantity of which is on the horizontal axis) is $3. Also assume that money income is $60. The absolute value of the slope of the resulting budget line is A. 5. |
B. 1/5 |
Refer to the graphs. Assume that pizza is measured in slices and beer in pints. In which of the graphs is the opportunity cost of a pint of beer equal to one slice of pizza? A.graph A |
D. Graph D |
Refer to the graphs. Assume that pizza is measured in slices and beer in pints. In which of the graphs is the opportunity cost of a pint of beer the lowest? A. graph A |
B. Graph B |
78. Suppose that Julia receives a $20 gift card for the local coffee shop, where she only buys lattes and muffins. If the price of a latte is $4 and the price of a muffin is $2, then we can conclude that Julia A.should only buy muffins. |
C. can buy 5 lattes or 10 muffins if she chooses to buy only one of the two goods. |
Camille is at the candy store with Grandma Mary, who offers to buy her $6 worth of candy. If lollipops are $1 each and candy bars are $2 each, what combination of candy can Camille’s Grandma Mary buy her? A. six lollipops and three candy bars |
B. two lollipops and two candy bars |
Which of the following is a labor resource A. a computer programmer |
A. a computer programmer |
Which of the following is a capital resource? A.a computer programmer |
D. Software used by a firm |
The four factors of production are: A. land, labor, capital, and money. |
B. Land, labor, capital and entrepreneurial ability. |
Which of the following is a land resource? |
D. Natural gas |
Which of the following lists includes only capital resources (and therefore no labor or land resources)? |
D. autos owned by a car rental firm, computers at the car rental agency, vans used to shuttle rental customers to and from the airport |
Money isn’t and economic resource because |
A. Money, as such, does not produce anything |
Economic resources are also called |
D. Factors of production |
Which of the following so economists consider to be capital? |
B. A construction crane |
The man function of the entrepreneur is to A. make routine pricing decisions. |
B. Innovate |
Which of the following is NOT a main function of the entrepreneur |
A. To make routine pricing decisions |
The process of producing and accumulating capital goods is called |
C. Investment |
Which of the following is NOT considered by economists to be and economic resource |
A. Money |
Which of the following would not be classified as an economic resource by economists? A.a professional soccer player |
C. money in a business checking account |
The production possibilities curve illustrates the basic principle that A.the production of more of any one good will in time require smaller and smaller sacrifices of other goods. |
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. |
Which of the following will not produce an outward shift of the production possibilities curve? A. upgrading the quality of a nation’s human resources |
B. Reducing unemployment |
Unemployment |
D. is illustrated by a point inside the production possibilities curve. |
If the production possibilities curve is a straight line, |
B. economic resources are perfectly substitutable between the production of the two goods |
A production possibilities curve illustrates A. scarcity. |
A. Scarcity |
A production possibilities curve shows A.that resources are unlimited. |
C. the maximum amounts of two goods that can be produced, assuming the full use of available resources. |
A nation’s production possibilities curve is bowed out from the origin because A. resources are not generally equally efficient in producing every good. |
A. resources are not generally equally efficient in producing every good. |
Refer to the table. If the economy is producing at production alternative C, the opportunity cost of the 10th unit of consumer goods will be |
D. ⅓ of a unit of capital goods. |
Refer to the table. As compared to production alternative D, the choice of alternative C would A. tend to generate a more rapid growth rate. |
A. tend to generate a more rapid growth rate. |
Refer to the table. |
C. would involve an inefficient use of the economy’s scarce resources |
Refer to the table. For this economy to produce a total output of 3 units of capital goods and 13 units of consumer goods, it must |
A. expand its resources or improve its technology. |
Refer to the table. For these data, the law of increasing opportunity costs is reflected in the fact that A. the amount of consumer goods that must be sacrificed to get more capital goods diminishes beyond a point. |
B. larger and larger amounts of capital goods must be sacrificed to get additional units of consumer goods. |
When an economy is operating under conditions of full employment, the production of more of commodity A will mean the production of less of commodity B because A.of the law of increasing opportunity costs. |
C. Resources are limited |
Assume that a change in government policy results in greater production of both consumer goods and investment goods. We can conclude that |
A. the economy was not employing all of its resources before the policy change. |
The production possibility curve |
C. is a frontier between all combinations of two goods that can be produced and those combinations that cannot be produced |
Any point inside the production possibilities indicates |
D. that more output could be produced with the available resources |
Refer to the diagram. Other things equal, this economy will shift its production possibilities curve outward the most if A.the ratio of capital to consumer goods is minimized. |
D. it chooses point A |
Refer to the diagram. This economy will experience unemployment if it produces at point |
D |
111. Which of the following is assumed in constructing a typical production possibilities curve? A.The economy is using its resources inefficiently. |
C. Production technology is fixed |
The typical production possibilities curve is |
C. a downsloping line that is bowed out from the origin. |
The slope of the typical production possibilities curve |
B. increases as one moves southeast along the curve. |
Assume an economy is incurring unemployment. The effect of resolving this problem will be to A. move the level of actual output closer to the economy’s production possibilities curve. |
A. move the level of actual output closer to the economy’s production possibilities curve. |
Refer to the tables. Suppose that the amount and quality of resources are the same in both countries. We can conclude that A. Duckistan is technologically better than Herbania at producing military goods. |
D. Herbania is technologically superior to Duckistan in producing civilian goods. |
Refer to the tables. Suppose that technology and the quality of resources are the same in both countries. We can conclude that A. Duckistan has more resources than Herbania. |
Refer to the tables. Suppose that technology and the quality of resources are the same in both countries. We can conclude that |
Refer to the tables. Opportunity costs of producing military goods are |
D. smaller in Duckistan than Herbania. |
Refer to the tables. Opportunity costs are |
C. increasing in both Duckistan and Herbania. |
Refer to the tables. Suppose that Duckistan and Herbania are each producing 14 units of civilian goods and 2 units of military goods. Then |
A. Duckistan is fully employing its resources, but Herbania is not. |
In the figure are two linear production possibilities curves for countries Alpha and Beta. We can conclude that |
D. the opportunity cost of shelter is greater in Alpha than it is in Beta. |
Which of the following is not correct? A typical production possibilities curve |
C. specifies how much of each product a society will want to produce. |
Refer to the diagram. This production possibilities curve is constructed so that |
D. the opportunity costs of both bread and tractors increase as more of each is produced. |
Refer to the diagram. Which of the following is a normative statement? |
A. Point C is superior to point B because it is important to enhance the future of society. |
Refer to the diagram. Which of the following is a positive statement? |
D. Given its resources and technology, this society is incapable of simultaneously producing 3 units of tractors and 15 units of bread. |
Refer to the diagram. Starting at point A, the opportunity cost of producing each successive unit of tractors is |
B. 2, 4, 6, and 8 units of bread. |
Refer to the diagram. Starting at point E, the production of successive units of bread will cost |
C. 1/8, 1/6, 1/4, and 1/2 units of tractors. |
Refer to the production possibilities curve. At the onset of the Second World War, the United States had large amounts of idle human and property resources. Its economic adjustment from peacetime to wartime can best be described by the movement from point |
C. a to point b. |
Refer to the production possibilities curve. At the onset of the Second World War, the Soviet Union was already at full employment. Its economic adjustment from peacetime to wartime can best be described by the movement from point |
A. c to point b. |
The production possibilities curve shows |
A. the various combinations of two goods that can be produced when society employs all of its scarce resources. |
The negative slope of the production possibilities curve is a graphical way of indicating that |
B. to produce more of one product, we must do with less of another. |
If an economy is operating on its production possibilities curve for consumer goods and capital goods, this means that |
D. more consumer goods can only be produced at the cost of fewer capital goods. |
The construction of a production possibilities curve assumes A. the quantities of all resources are unlimited. |
B. technology is fixed. |
A typical concave (bowed out from the origin) production possibilities curve implies |
B. that society must choose among various attainable combinations of goods. |
The production possibilities curve tells us |
D. the combinations of two goods that can be produced with society’s available resources. |
The production possibilities curve has |
B. a negative slope that increases as we move along it from left to right. |
Refer to the tables. If South Cantina is producing at production alternative D, the opportunity cost of the third unit of capital goods will be |
D. 6 units of consumer goods. |
Refer to the tables. If North Cantina is producing at production alternative B, the opportunity cost of the eleventh unit of consumer goods will be |
D. ⅛ of a unit of capital goods. |
Refer to the tables. Suppose that North Cantina is producing 2 units of capital goods and 17 units of consumer goods, while South Cantina is producing 2 units of capital goods and 21 units of consumer goods. We can conclude that |
B. South Cantina is fully and efficiently using its resources, but North Cantina is not. |
Refer to the tables. Suppose that resources in North Cantina and South Cantina are identical in quantity and quality. We can conclude that A. South Cantina has better technology than North Cantina in producing both capital and consumer goods. |
D. North Cantina has better technology than South Cantina in producing consumer goods but not capital goods. |
Refer to the tables. The opportunity cost of the fifth unit of capital goods |
A. is higher in North Cantina than in South Cantina. |
If an economy is operating inside its production possibilities curve for consumer goods and capital goods, it |
C. can produce more of both consumer goods and capital goods by using resources that are currently idle. |
Refer to the diagram. Points A, B, C, D, and E show |
B. combinations of bicycles and computers that society can produce by using its resources efficiently. |
Refer to the diagram. If society is currently producing 9 units of bicycles and 4 units of computers and it now decides to increase computer output to 6, the cost |
A. will be 4 units of bicycles. |
Refer to the diagram. The combination of computers and bicycles shown by point G is |
B. unattainable given currently available resources and technology. |
Refer to the diagram. If society is currently producing the combination of bicycles and computers shown by point D, the production of 2 more units of bicycles |
B. will cost 1 unit of computers. |
Refer to the diagram. The combination of computers and bicycles shown by point F |
B. is attainable but implies that the economy is not using all its resources. |
Refer to the diagram. The movement down the production possibilities curve from point A to point E suggests that the production of |
D. both bicycles and computers is subject to increasing opportunity costs. |
Refer to the diagram. As it relates to production possibilities analysis, the law of increasing opportunity cost is reflected in curve |
C. C |
Refer to the diagram. Curve B is a |
A. production possibilities curve indicating constant opportunity costs. |
Refer to the diagram. All other things equal, curve C |
C. is a more desirable production possibilities curve for an economy than curve A. |
The fact that the slope of the production possibilities curve becomes steeper as we move down along the curve indicates that |
A. the principle of increasing opportunity costs is relevant. |
The law of increasing opportunity costs states that |
A. if society wants to produce more of a particular good, it must sacrifice larger and larger amounts of another good to do so. |
The concept of opportunity cost A. is irrelevant in socialistic economies because of central planning. |
B. suggests that the use of resources in any particular line of production means that alternative outputs must be forgone. |
The law of increasing opportunity costs is reflected in a production possibilities curve that is |
C. bowed out from the origin. |
The point on the production possibilities curve that is most desirable can be found by |
B. comparing marginal benefits and marginal costs. |
The optimal point on a production possibilities curve is achieved where |
B. each good is produced at a level where marginal benefits equal marginal costs. |
The marginal benefit curve is |
D. downsloping because successive units of a specific product yield less and less extra benefit. |
The marginal cost curve is |
A. upsloping because of increasing marginal opportunity costs. |
The output of digital music players should be |
B. reduced if marginal costs exceed marginal benefits. |
If the output of product X is such that marginal benefit equals marginal cost, |
A. the correct amount of resources is being allocated to X’s production. |
Refer to the diagram for athletic shoes. The optimal output of shoes is |
B. Q2. |
Refer to the diagram for athletic shoes. If the current output of shoes is Q1, then A. society would consider additional units of shoes to be more valuable than alternative uses of those resources. |
A. society would consider additional units of shoes to be more valuable than alternative uses of those resources. |
Refer to the diagram for athletic shoes. If the current output of shoes is Q3, then |
C. society would consider additional units of shoes to be less valuable than alternative products. |
Refer to the diagram for athletic shoes. If the current output of shoes is Q3, then |
A. society should produce fewer shoes to achieve the optimal allocation of resources. |
Suppose that a fully employed economy produces only two goods, hamburgers and flat-panel TVs. If the economy is currently producing more than the optimal quantity of hamburgers, then to attain the optimal allocation of resources, it should |
B. produce more TVs and fewer hamburgers. |
Suppose that an economy is producing on its production possibilities curve but is not producing quantities of each good where the marginal benefit equals the marginal cost for each good. This economy |
D. can improve its allocation by producing more of both goods. |
The optimal allocation of resources is found |
A. where MB = MC. |
Refer to the diagram. Technological advance in producing both capital goods and consumer goods is shown by the shift of the production possibilities curve from AB to |
A. CD. |
Refer to the diagram. Technological advance that improves the ability to produce capital goods but not consumer goods is shown by the shift of the production possibilities curve from AB to |
B. BE. |
Refer to the diagram. Technological advance that is useful in producing consumer goods but not in producing capital goods is shown by the shift of the production possibilities curve from AB to |
C. AF. |
171. The basic difference between consumer goods and capital goods is that |
D. consumer goods satisfy wants directly, while capital goods satisfy wants indirectly. |
Which of the following will shift the production possibilities curve to the right? |
D. a technological advance that allows farmers to produce more output from given inputs |
Other things equal, which of the following would shift an economy’s production possibilities curve to the left? |
C. a law requiring mandatory retirement from the labor force at age 55 |
Refer to the diagram. The concave shape of each production possibilities curve indicates that |
D. resources are not equally suited for alternative uses. |
Refer to the diagram. The concept of opportunity cost is best represented by the |
C. move from B on PP1 to C on PP1. |
Refer to the diagram. Other things equal, which of the following positions relative to PP1 would be the most likely to result in a future production possibilities curve of |
A |
Refer to the diagram. An improvement in technology will A. shift the production possibilities curve from PP1 to PP2. |
A. shift the production possibilities curve from PP1 to PP2. |
Refer to the diagram. Which one of the following would shift the production possibilities curve from PP1 to PP2? |
B. immigration of skilled workers into the economy |
Which of the following statements, if any, is correct for a nation that is producing only consumer and capital goods? A. Other things equal, the more consumer goods a nation produces, the greater will be its future growth rate. |
B. Other things equal, the more capital goods a nation produces, the greater will be its future growth rate. |
All of the following could immediately or eventually lead to an inward shift of a nation’s production possibilities curve, except |
C. an increase in the average skill level of all occupational groups. |
A nation’s production possibilities curve might shift to the left (inward) as a result of |
C. the depletion of its soil fertility due to overplanting and overgrazing. |
Which of the following will enable a nation to obtain a combination of consumer goods and capital goods outside its production possibilities curve? A. full employment |
B. international specialization and trade |
Suppose that Scoobania, which has full employment, can obtain 1 unit of capital goods by sacrificing 2 units of consumer goods domestically but can obtain 1 unit of capital goods from another country by trading 1 unit of consumer goods for it. This reality illustrates |
C. achieving points beyond the production possibilities curve through international specialization and trade. |
Through specialization and international trade, a nation |
A. can attain some combination of goods lying outside its production possibilities curve. |
Some agricultural sub-Saharan nations of Africa have overfarmed and overgrazed their land to the extent that significant portions of it have turned into desert. This suggests that |
B. the production possibilities curves of such nations have shifted inward. |
If all discrimination in the United States were eliminated, the economy would |
B. produce at some point closer to its production possibilities curve. |
A country can achieve some combination of goods outside its production possibilities curve by |
B. specializing and engaging in international trade. |
In recent years the economy of Japan has grown, despite the fact that the population of Japan has declined. Which of the following would best explain Japan’s economic growth despite having a smaller population? |
B. advancements in technology that make labor more productive |
(Consider This) Free products offered by firms |
B. may or may not be free to individuals but are never free to society. |
Microeconomics Ch 1
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