Question 1

(The following economy produces two products.)  Production Possibilities Table
 Refer to the above table.A change from possibility C to B means that:

Accepted Answer

A)  1 unit of steel is given up to get 75 units of wheat.
B)  2 units of steel are given up to get 75 units of wheat.
C)  1 unit of steel is given up to get 15 more units of wheat.
D)  2 units of steel are given up to get 15 more units of wheat.E) B) and C)
F) A) and B)

Question 2

3, then: A) resources are being allocated efficiently to the production of shoes. B) society would consider additional units of shoes to be more valuable than alternative products. C) society would consider additional units of shoes to be less valuable than alternative products. D) society would experience a net gain by producing more shoes." class="answers-bank-image d-inline" rel="preload" > Refer to the above diagram for athletic shoes.If the current output of shoes is Q3, then:

Accepted Answer

A)  resources are being allocated efficiently to the production of shoes.
B)  society would consider additional units of shoes to be more valuable than alternative products.
C)  society would consider additional units of shoes to be less valuable than alternative products.
D)  society would experience a net gain by producing more shoes.E) B) and D)
F) None of the above

Question 3

If the equation y = -10 + 2.5x was plotted

Accepted Answer

A)  the vertical intercept would be -10.
B)  the slope would be +2.5.
C)  it would graph as an upsloping line.
D)  all of the above would be true.E) None of the above
F) B) and D)

Question 4

1/4. B) is +1/4. C) is .40. D) cannot be determined from the information given." class="answers-bank-image d-inline" rel="preload" > Refer to the above diagram.The slope of the line:

Accepted Answer

A)  is -1/4.
B)  is +1/4.
C)  is .40.
D)  cannot be determined from the information given.E) None of the above
F) A) and D)

Question 5

The main function of the entrepreneur is to:

Accepted Answer

A)  make routine pricing decisions.
B)  innovate.
C)  purchase capital.
D)  create market demand.E) A) and B)
F) B) and C)

Question 6

The economic perspective focuses largely on:

Accepted Answer

A)  marginal analysis.
B)  rational task analysis.
C)  total revenues.
D)  total costs.E) A) and D)
F) C) and D)

Question 7

All of the following could immediately or eventually lead to an inward shift of a nation's production possibilities curve, except:

Accepted Answer

A)  an increase in the amount of discrimination.
B)  a decline in the birth rate.
C)  an increase in the average skill level of all occupational groups.
D)  depletion and reduced availability of major energy resources.E) C) and D)
F) A) and B)

Question 8

A major argument for economic growth is that it:

Accepted Answer

A)  creates an equal distribution of income.
B)  protects common property resources.
C)  leads to a higher standard of living.
D)  reduces the amount of taxation.E) B) and D)
F) A) and C)

Question 9

The entrepreneur's sole function is to combine other resources (land, labour, and capital) in the production of some good or service.

Accepted Answer

A) True 
 B)False

Question 10

Refer to the above production possibilities curve.At the onset of World War II the Soviet Union's economy was already at full employment.Its economic adjustment from peacetime to wartime can best be described by the movement from point:

Accepted Answer

A)  c to point b.
B)  b to point c.
C)  a to point b.
D)  c to point d.E) None of the above
F) All of the above

Question 11

Choices are usually made at the margin, is which of the ten key concepts to retain for a lifetime?

Accepted Answer

A)  Facing trade-offs
B)  Interest Expense
C)  Marginal analysis
D)  The influence of incentivesE) None of the above
F) A) and B)

Question 12

Refer to the above 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:

Accepted Answer

A)  will be 4 units of bicycles.
B)  will be 2 units of bicycles.
C)  will be zero because unemployed resources are available.
D)  of doing so cannot be determined from the information given.E) B) and D)
F) A) and D)

Question 13

International specialization and trade:

Accepted Answer

A)  allow a nation to get more of a desired good at less sacrifice of some other good.
B)  can allow an economy to circumvent the output limits imposed by its domestic production possibilities curve.
C)  Has the same effect as having more and better resources.
D)  All of the above.E) C) and D)
F) B) and C)

Question 14

If price (P)  and quantity (Q)  are directly related, this means that:

Accepted Answer

A)  a change in Q will alter P, but a change in P will not alter Q.
B)  if P increases, Q will decrease.
C)  if P increases, Q will also increase.
D)  an increase in P will cause Q to change, but the direction in which Q changes cannot be predicted.E) A) and C)
F) B) and C)

Question 15

A nation's production possibilities curve is "bowed out" from the origin because:

Accepted Answer

A)  resources are not equally efficient in producing every good.
B)  the originator of the idea drew it this way and modern economists follow this convention.
C)  resources are scarce.
D)  wants are virtually unlimited.E) B) and C)
F) C) and D)

Question 16

Individuals face an economic problem but society does not.

Accepted Answer

A) True 
 B)False

Question 17

Refer to the above diagram.The movement down the production possibilities curve from point A to point E suggests that the production of:

Accepted Answer

A)  computers, but not bicycles, is subject to increasing opportunity costs.
B)  bicycles, but not computers, is subject to increasing opportunity costs.
C)  both bicycles and computers is subject to constant opportunity costs.
D)  both bicycles and computers is subject to increasing opportunity costs.E) None of the above
F) A) and C)

Question 18

Assume that if the interest rate that businesses must pay to borrow funds were 20 percent, it would be unprofitable for businesses to invest in new machinery and equipment so that investment would be zero.But if the interest rate were 16 percent, businesses would find it profitable to invest $10 billion.If the interest rate were 12 percent, $20 billion would be invested.Assume that total investment continues to increase by $10 billion for each successive 4 percentage point decline in the interest rate.Refer to the above information.Using i and I to indicate the interest rate and investment (in billions of dollars)  respectively, which of the following is the correct tabular presentation of the described relationship?

Accepted Answer

A)  column (
A)  
B)  column (
B)  
C)  column (
C)  
D)  column (
D)  E) A) and B)
F) A) and C)

Question 19

Production possibilities tables for two countries, North Cantina and South Cantina: North Cantina
Production possibilities (alternatives) 
 South Cantina
Production possibilities (alternatives) 
 Refer to the above tables.The opportunity cost of the fifth unit of capital goods:

Accepted Answer

A)  is higher in North Cantina than in South Cantina.
B)  is the same in North Cantina and South Cantina.
C)  is lower in North Cantina than in South Cantina.
D)  cannot be determined from the information provided.E) All of the above
F) None of the above

Question 20

Answer on the basis of the relationships shown in the above four figures.The amount of Y is inversely related to the amount of X in:

Accepted Answer

A)  2 only.
B)  both 1 and 3.
C)  3 only.
D)  1 only.E) All of the above
F) None of the above

Exam 1: Part B: Limits, Alternatives, and Choices

Refer to the above diagram.The slope of the line:

Correct Answer
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Correct Answer
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Refer to the above production possibilities curve.At the onset of World War II the Soviet Union's economy was already at full employment.Its economic adjustment from peacetime to wartime can best be described by the movement from point:

Correct Answer
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International specialization and trade:

Correct Answer
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A nation's production possibilities curve is "bowed out" from the origin because:

Correct Answer
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Refer to the above diagram.The movement down the production possibilities curve from point A to point E suggests that the production of:

Correct Answer
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(The following economy produces two products.) Production Possibilities Table Refer to the above table.A change from possibility C to B means that:

Correct Answer
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The economic perspective focuses largely on:

Correct Answer
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Answer on the basis of the relationships shown in the above four figures.The amount of Y is inversely related to the amount of X in:

Correct Answer
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The entrepreneur's sole function is to combine other resources (land, labour, and capital) in the production of some good or service.

Correct Answer
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All of the following could immediately or eventually lead to an inward shift of a nation's production possibilities curve, except:

Correct Answer
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Choices are usually made at the margin, is which of the ten key concepts to retain for a lifetime?

Correct Answer
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If price (P) and quantity (Q) are directly related, this means that:

Correct Answer
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Refer to the above 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:

Correct Answer
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Refer to the above diagram for athletic shoes.If the current output of shoes is Q₃, then:

Correct Answer
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Individuals face an economic problem but society does not.

Correct Answer
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If the equation y = -10 + 2.5x was plotted

Correct Answer
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A major argument for economic growth is that it:

Correct Answer
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The main function of the entrepreneur is to:

Correct Answer
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Production possibilities tables for two countries, North Cantina and South Cantina: North Cantina Production possibilities (alternatives) South Cantina Production possibilities (alternatives) Refer to the above tables.The opportunity cost of the fifth unit of capital goods:

Correct Answer
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Exam 1: Part B: Limits, Alternatives, and Choices

Refer to the above diagram.The slope of the line:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Refer to the above production possibilities curve.At the onset of World War II the Soviet Union's economy was already at full employment.Its economic adjustment from peacetime to wartime can best be described by the movement from point:

Correct AnswerverifiedShow Answer

International specialization and trade:

Correct AnswerverifiedShow Answer

A nation's production possibilities curve is "bowed out" from the origin because:

Correct AnswerverifiedShow Answer

Refer to the above diagram.The movement down the production possibilities curve from point A to point E suggests that the production of:

Correct AnswerverifiedShow Answer

(The following economy produces two products.) Production Possibilities Table Refer to the above table.A change from possibility C to B means that:

Correct AnswerverifiedShow Answer

The economic perspective focuses largely on:

Correct AnswerverifiedShow Answer

Answer on the basis of the relationships shown in the above four figures.The amount of Y is inversely related to the amount of X in:

Correct AnswerverifiedShow Answer

The entrepreneur's sole function is to combine other resources (land, labour, and capital) in the production of some good or service.

Correct AnswerverifiedShow Answer

All of the following could immediately or eventually lead to an inward shift of a nation's production possibilities curve, except:

Correct AnswerverifiedShow Answer

Choices are usually made at the margin, is which of the ten key concepts to retain for a lifetime?

Correct AnswerverifiedShow Answer

If price (P) and quantity (Q) are directly related, this means that:

Correct AnswerverifiedShow Answer

Refer to the above 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:

Correct AnswerverifiedShow Answer

Refer to the above diagram for athletic shoes.If the current output of shoes is Q3, then:

Correct AnswerverifiedShow Answer

Individuals face an economic problem but society does not.

Correct AnswerverifiedShow Answer

If the equation y = -10 + 2.5x was plotted

Correct AnswerverifiedShow Answer

A major argument for economic growth is that it:

Correct AnswerverifiedShow Answer

The main function of the entrepreneur is to:

Correct AnswerverifiedShow Answer

Production possibilities tables for two countries, North Cantina and South Cantina: North Cantina Production possibilities (alternatives) South Cantina Production possibilities (alternatives) Refer to the above tables.The opportunity cost of the fifth unit of capital goods:

Correct AnswerverifiedShow Answer

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Refer to the above diagram for athletic shoes.If the current output of shoes is Q₃, then:

Correct Answer
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