Question 1

For a given production possibilities frontier, which points are attainable?

Accepted Answer

A)  points inside the frontier 
B)  points outside the frontier 
C)  points on or outside the frontier 
D)  points on the frontier only 
E)  points on or inside the frontierF) D) and E)
G) C) and D)

Question 2

Figure 3-2
 
-In Figure 3-2, the production possibilities frontier has a bowed-out shape because of the law of

Accepted Answer

A)  decreasing costs.
B)  increasing costs.
C)  demand.
D)  comparative advantage.E) A) and B)
F) None of the above

Question 3

Both conservatives and liberals tend to approve of markets because

Accepted Answer

A)  markets are effective in solving many of society's problems.
B)  markets work well in all cases, and can be relied upon to solve problems.
C)  their goals are similar enough that they can rely on the same means.
D)  production is the most important goal, and market systems are very productive.
E)  of all of the above.F) A) and B)
G) A) and C)

Question 4

The major coordination tasks can be summarized with the questions

Accepted Answer

A)  who, what, when, where? 
B)  how, what, for whom? 
C)  how, what, why? 
D)  how, why, for whom? 
E)  who, how, what?F) D) and E)
G) A) and E)

Question 5

The U.S.government spent over $3.6 trillion in budget year 2010.

Accepted Answer

A) True 
 B)False

Question 6

An optimal decision is one that is selected based on an analysis of

Accepted Answer

A)  explicit costs but not implicit costs.
B)  implicit costs but not explicit costs.
C)  both explicit costs and implicit costs.
D)  neither explicit costs nor implicit costs.E) B) and D)
F) B) and C)

Question 7

Economics is often described as a science of constrained choice.How do you justify this argument?

Accepted Answer

Economics deals with the allocation of l...

Question 8

A well-functioning market will have high monetary costs applied to high opportunity costs.

Accepted Answer

A) True 
 B)False

Question 9

Suppose a presidential candidate campaigns on the need to improve U.S.infrastructure, a term for capital goods like bridges, highways, and technology (much of it publicly owned).Which would lead to faster growth: government expenditure on capital goods or expenditure on consumption goods such as sports stadiums?
 Illustrate your answer, drawing appropriate production possibilities frontiers accompanied by an explanation.

Accepted Answer

Draw a PPF labeling one axis (say, Y) ca...

Question 10

A market system works very well in solving some basic problems of the economy but it fails in some cases.Provide examples.

Accepted Answer

The market deals with efficiency in prod...

Question 11

The opportunity cost of a college education includes wages lost while enrolled in school.

Accepted Answer

A) True 
 B)False

Question 12

What is Jim's opportunity cost of operating his own business?

Accepted Answer

A)  the total amount of money he puts into capital equipment 
B)  the value of his labor that is put into the business 
C)  the cost of hiring his laborers 
D)  All of the above are correct.E) C) and D)
F) None of the above

Question 13

Centrally planned economies are not constrained by the problem of scarcity.

Accepted Answer

A) True 
 B)False

Question 14

Scarcity is a concept that applies to all of the following except

Accepted Answer

A)  time.
B)  natural resources.
C)  human wants.
D)  machinery.E) A) and D)
F) B) and C)

Question 15

At various times, the United States has undergone the painful process of reducing military spending.Military bases from the Carolinas to California pleaded to be spared, citing huge job losses if they close.How can one rationally decide which bases to shut down, given the necessity of jobs?

Accepted Answer

One must examine the opportunity cost of...

Question 16

Which of the following is an example of opportunity cost not measured by money cost?

Accepted Answer

A)  the time spent eating a business lunch at a restaurant 
B)  the time spent preparing a meal eaten at home 
C)  the time spent studying to obtain an "A" in economics 
D)  the time spent repairing a car in one's own garage 
E)  All of the above are correct.F) B) and D)
G) A) and E)

Question 17

How does scarcity affect the range of possible choices that decision makers face?

Accepted Answer

A)  It narrows the choice to a single option.
B)  It narrows the range of choices.
C)  It increases the possible methods for solving problems.
D)  It clarifies the choices by highlighting the best solutions.
E)  It simplifies the choices and therefore widens the range.F) D) and E)
G) C) and D)

Question 18

Is faster economic growth unambiguously better?

Accepted Answer

A)  No, because growth has an opportunity cost.
B)  No, because growth serves no useful purpose.
C)  Yes, because more goods and services are always better.
D)  Yes, because it expands the production possibilities of an economy.
E)  Uncertain-economic growth has no answer to this question.F) None of the above
G) B) and C)

Question 19

All of the points inside a production possibilities frontier are ____; all of the points outside the production possibilities frontier are ____.

Accepted Answer

A)  efficient, inefficient 
B)  optimal, irrational 
C)  attainable, unattainable 
D)  rational, zero-cost 
E)  unattainable, efficientF) C) and D)
G) A) and E)

Question 20

In terms of efficiency, any point on a production possibilities frontier is as good another.

Accepted Answer

A) True 
 B)False

Exam 3: The Fundamental Economic Problem: Scarcity and Choice

The major coordination tasks can be summarized with the questions

Correct Answer
verified

Centrally planned economies are not constrained by the problem of scarcity.

Correct Answer
verified

Figure 3-2 -In Figure 3-2, the production possibilities frontier has a bowed-out shape because of the law of

Correct Answer
verified

The U.S.government spent over $3.6 trillion in budget year 2010.

Correct Answer
verified

Which of the following is an example of opportunity cost not measured by money cost?

Correct Answer
verified

What is Jim's opportunity cost of operating his own business?

Correct Answer
verified

In terms of efficiency, any point on a production possibilities frontier is as good another.

Correct Answer
verified

For a given production possibilities frontier, which points are attainable?

Correct Answer
verified

Is faster economic growth unambiguously better?

Correct Answer
verified

At various times, the United States has undergone the painful process of reducing military spending.Military bases from the Carolinas to California pleaded to be spared, citing huge job losses if they close.How can one rationally decide which bases to shut down, given the necessity of jobs?

Correct Answer
verified
One must examine the opportunity cost of...
View Answer

Correct Answer
verified
Draw a PPF labeling one axis (say, Y) ca...
View Answer

A well-functioning market will have high monetary costs applied to high opportunity costs.

Correct Answer
verified

All of the points inside a production possibilities frontier are ; all of the points outside the production possibilities frontier are .

Correct Answer
verified

The opportunity cost of a college education includes wages lost while enrolled in school.

Correct Answer
verified

Economics is often described as a science of constrained choice.How do you justify this argument?

Correct Answer
verified
Economics deals with the allocation of l...
View Answer

Both conservatives and liberals tend to approve of markets because

Correct Answer
verified

How does scarcity affect the range of possible choices that decision makers face?

Correct Answer
verified

Scarcity is a concept that applies to all of the following except

Correct Answer
verified

A market system works very well in solving some basic problems of the economy but it fails in some cases.Provide examples.

Correct Answer
verified
The market deals with efficiency in prod...
View Answer

An optimal decision is one that is selected based on an analysis of

Correct Answer
verified

Exam 3: The Fundamental Economic Problem: Scarcity and Choice

The major coordination tasks can be summarized with the questions

Correct AnswerverifiedShow Answer

Centrally planned economies are not constrained by the problem of scarcity.

Correct AnswerverifiedShow Answer

Figure 3-2 -In Figure 3-2, the production possibilities frontier has a bowed-out shape because of the law of

Correct AnswerverifiedShow Answer

The U.S.government spent over $3.6 trillion in budget year 2010.

Correct AnswerverifiedShow Answer

Which of the following is an example of opportunity cost not measured by money cost?

Correct AnswerverifiedShow Answer

What is Jim's opportunity cost of operating his own business?

Correct AnswerverifiedShow Answer

In terms of efficiency, any point on a production possibilities frontier is as good another.

Correct AnswerverifiedShow Answer

For a given production possibilities frontier, which points are attainable?

Correct AnswerverifiedShow Answer

Is faster economic growth unambiguously better?

Correct AnswerverifiedShow Answer

At various times, the United States has undergone the painful process of reducing military spending.Military bases from the Carolinas to California pleaded to be spared, citing huge job losses if they close.How can one rationally decide which bases to shut down, given the necessity of jobs?

Correct AnswerverifiedOne must examine the opportunity cost of...View AnswerShow Answer

Correct AnswerverifiedDraw a PPF labeling one axis (say, Y) ca...View AnswerShow Answer

A well-functioning market will have high monetary costs applied to high opportunity costs.

Correct AnswerverifiedShow Answer

All of the points inside a production possibilities frontier are ____; all of the points outside the production possibilities frontier are ____.

Correct AnswerverifiedShow Answer

The opportunity cost of a college education includes wages lost while enrolled in school.

Correct AnswerverifiedShow Answer

Economics is often described as a science of constrained choice.How do you justify this argument?

Correct AnswerverifiedEconomics deals with the allocation of l...View AnswerShow Answer

Both conservatives and liberals tend to approve of markets because

Correct AnswerverifiedShow Answer

How does scarcity affect the range of possible choices that decision makers face?

Correct AnswerverifiedShow Answer

Scarcity is a concept that applies to all of the following except

Correct AnswerverifiedShow Answer

A market system works very well in solving some basic problems of the economy but it fails in some cases.Provide examples.

Correct AnswerverifiedThe market deals with efficiency in prod...View AnswerShow Answer

An optimal decision is one that is selected based on an analysis of

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
One must examine the opportunity cost of...
View Answer

Correct Answer
verified
Draw a PPF labeling one axis (say, Y) ca...
View Answer

Correct Answer
verified

All of the points inside a production possibilities frontier are ; all of the points outside the production possibilities frontier are .

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Economics deals with the allocation of l...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The market deals with efficiency in prod...
View Answer

Correct Answer
verified