Question 1

Use the following figure to answer questions: Figure 1.4 
-Which of the following is true about the combination of plasma televisions and MP3 players represented by point F in Figure 1.4?

Accepted Answer

A)  Point F is inefficient now.
B)  Point F is unattainable even with advances in technology.
C)  Point F will be more easily attainable if the government takes control of all privately run factories.
D)  Point F can possibly be reached if more economic resources become available or technology improves.

Question 2

Use the following figure to answer the questions: Figure 1.7:

-The cost of producing at point G rather than point D is

Accepted Answer

A)  OA units of food.
B)  KL units of clothing.
C)  AB units of food.
D)  OL units of clothing.

Question 3

Use the following figure to answer questions: Figure 1.5
-Using Figure 1.5,if an economy has the capacity to produce represented by PP2,then point E represents

Accepted Answer

A)  A constant trade-off between potato chips and doughnuts.
B)  A combination of potato chips and doughnuts that is not attainable.
C)  An efficient use of resources.
D)  None of the choices are correct.

Question 4

Factors of production are

Accepted Answer

A)  Scarce in every society.
B)  Scarce only in advanced countries.
C)  Scarce only in the poorest countries of the world.
D)  Unlimited in quantity.

Question 5

Table 1.1 shows the hypothetical trade-off between different combinations of Stealth bombers and B-1 bombers that might be produced in a year with the limited U.S.capacity,ceteris paribus.Complete the table by calculating the required opportunity costs for both the B-1 and Stealth bombers. 
- On the basis of your calculations in Table 1.1,you may infer that the law of increasing opportunity costs applies to

Accepted Answer

A)  Stealth bombers but not to B-1 bombers.
B)  B-1 bombers but not to Stealth bombers.
C)  Both B-1 bombers and Stealth bombers.
D)  Neither B-1 bombers nor Stealth bombers.

Question 6

Every time we use scarce resources in one way,we give up the opportunity to use them in other ways.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following events would allow the production possibilities curve to shift outward?

Accepted Answer

A)  The economy's capital stock declines.
B)  More teenagers enter the labor force.
C)  Technology is lost.
D)  People begin to retire at earlier ages.

Question 8

All output combinations that lie outside a production possibilities curve are attainable with available resources and technology.

Accepted Answer

A) True 
 B)False

Question 9

Output combinations that lie inside the production possibilities curve are characterized by efficient use of resources.

Accepted Answer

A) True 
 B)False

Question 10

Use the following figure to answer the questions: Figure 1.7:

-The benefit of producing at point G rather than point D is :

Accepted Answer

A)  OA units of food.
B)  KL units of clothing.
C)  AB units of food.
D)  OL units of clothing.

Question 11

One World View article is titled "Chronic Food Shortage Shows Despite Efforts by North Korea to Hide It." If North Korea reduces the size of its military and produces more food,this is most consistent with

Accepted Answer

A)  A movement along the economy's production possibilities curve.
B)  Privatization.
C)  A laissez faire policy.
D)  The law of increasing opportunity costs.

Question 12

Which of the following is an assumption under which the production possibilities curve is drawn?

Accepted Answer

A)  Total unemployment is zero.
B)  The supply of resources is fixed.
C)  The price level is changing.
D)  Technology is changing.

Question 13

Given that resources are scarce,

Accepted Answer

A)  A "free lunch" is possible,but only for a limited number of people.
B)  Opportunity costs are experienced whenever choices are made.
C)  Poor countries must make choices,but rich countries with abundant resources do not have to make choices.
D)  Some choices involve opportunity costs while other choices do not.

Question 14

Which of the following is true when an economy is producing efficiently?

Accepted Answer

A)  The economy is producing on the production possibilities curve.
B)  The economy is producing outside the production possibilities curve.
C)  The economy is getting the fewest goods and services from the available resources.
D)  Everyone in the economy is happy.

Question 15

The book Wealth of Nations was written by

Accepted Answer

A)  Adam Smith in 1776.
B)  John Maynard Keynes in 1776.
C)  Adam Smith in 1936.
D)  John Maynard Keynes in 1936.

Question 16

According to the law of increasing opportunity costs,

Accepted Answer

A)  Greater production leads to greater inefficiency.
B)  Greater production means factor prices rise.
C)  Greater production of one good requires increasingly larger sacrifices of other goods.
D)  Higher opportunity costs induce higher output per unit of input.

Question 17

If North Korea is currently producing at efficiency,and it proceeds to increase the size of its military,then,as long as nothing else changes,its

Accepted Answer

A)  Production possibilities curve will shift outward.
B)  Production possibilities curve will shift inward.
C)  Production of nonmilitary goods will increase.
D)  Production of nonmilitary goods will decrease.

Question 18

A mixed economy

Accepted Answer

A)  Is justified by the superiority of laissez faire over government intervention.
B)  Utilizes both market and nonmarket signals to allocate goods and services.
C)  Relies on the use of central planning by private firms rather than the government.
D)  Is one that allows trade with other countries.

Question 19

The essential feature of the market mechanism is the price signal.

Accepted Answer

A) True 
 B)False

Question 20

The basic factors of production include

Accepted Answer

A)  Land,labor,money,and capital.
B)  Land,labor,money,and inputs.
C)  Labor and money.
D)  Land,labor,capital,and entrepreneurship.

Exam 1: Economics: the Core Issues Appendix: Using Graphs

Use the following figure to answer the questions: Figure 1.7: -The cost of producing at point G rather than point D is

Correct Answer
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Every time we use scarce resources in one way,we give up the opportunity to use them in other ways.

Correct Answer
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One World View article is titled "Chronic Food Shortage Shows Despite Efforts by North Korea to Hide It." If North Korea reduces the size of its military and produces more food,this is most consistent with

Correct Answer
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Use the following figure to answer questions: Figure 1.5 -Using Figure 1.5,if an economy has the capacity to produce represented by PP2,then point E represents

Correct Answer
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Use the following figure to answer questions: Figure 1.4 -Which of the following is true about the combination of plasma televisions and MP3 players represented by point F in Figure 1.4?

Correct Answer
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Output combinations that lie inside the production possibilities curve are characterized by efficient use of resources.

Correct Answer
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All output combinations that lie outside a production possibilities curve are attainable with available resources and technology.

Correct Answer
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According to the law of increasing opportunity costs,

Correct Answer
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The basic factors of production include

Correct Answer
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Which of the following events would allow the production possibilities curve to shift outward?

Correct Answer
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Factors of production are

Correct Answer
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If North Korea is currently producing at efficiency,and it proceeds to increase the size of its military,then,as long as nothing else changes,its

Correct Answer
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A mixed economy

Correct Answer
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Which of the following is true when an economy is producing efficiently?

Correct Answer
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Correct Answer
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Given that resources are scarce,

Correct Answer
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The essential feature of the market mechanism is the price signal.

Correct Answer
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The book Wealth of Nations was written by

Correct Answer
verified

Use the following figure to answer the questions: Figure 1.7: -The benefit of producing at point G rather than point D is :

Correct Answer
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Which of the following is an assumption under which the production possibilities curve is drawn?

Correct Answer
verified

Exam 1: Economics: the Core Issues Appendix: Using Graphs

Use the following figure to answer the questions: Figure 1.7: -The cost of producing at point G rather than point D is

Correct AnswerverifiedShow Answer

Every time we use scarce resources in one way,we give up the opportunity to use them in other ways.

Correct AnswerverifiedShow Answer

One World View article is titled "Chronic Food Shortage Shows Despite Efforts by North Korea to Hide It." If North Korea reduces the size of its military and produces more food,this is most consistent with

Correct AnswerverifiedShow Answer

Use the following figure to answer questions: Figure 1.5 -Using Figure 1.5,if an economy has the capacity to produce represented by PP2,then point E represents

Correct AnswerverifiedShow Answer

Use the following figure to answer questions: Figure 1.4 -Which of the following is true about the combination of plasma televisions and MP3 players represented by point F in Figure 1.4?

Correct AnswerverifiedShow Answer

Output combinations that lie inside the production possibilities curve are characterized by efficient use of resources.

Correct AnswerverifiedShow Answer

All output combinations that lie outside a production possibilities curve are attainable with available resources and technology.

Correct AnswerverifiedShow Answer

According to the law of increasing opportunity costs,

Correct AnswerverifiedShow Answer

The basic factors of production include

Correct AnswerverifiedShow Answer

Which of the following events would allow the production possibilities curve to shift outward?

Correct AnswerverifiedShow Answer

Factors of production are

Correct AnswerverifiedShow Answer

If North Korea is currently producing at efficiency,and it proceeds to increase the size of its military,then,as long as nothing else changes,its

Correct AnswerverifiedShow Answer

A mixed economy

Correct AnswerverifiedShow Answer

Which of the following is true when an economy is producing efficiently?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Given that resources are scarce,

Correct AnswerverifiedShow Answer

The essential feature of the market mechanism is the price signal.

Correct AnswerverifiedShow Answer

The book Wealth of Nations was written by

Correct AnswerverifiedShow Answer

Use the following figure to answer the questions: Figure 1.7: -The benefit of producing at point G rather than point D is :

Correct AnswerverifiedShow Answer

Which of the following is an assumption under which the production possibilities curve is drawn?

Correct AnswerverifiedShow Answer

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