Macro Eco Spring 16 – Flashcards

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question
Scarcity arises because A) resources are finite and are inadequate to meet all human wants and needs. B) import taxes depress the rate of growth of goods and services production. C) international companies are slow to explore for new resources. D) many countries waste goods because of inefficient political systems.
answer
A
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Which of the following statements is TRUE about scarcity? A) Both rich and poor people face the problem of scarcity. B) Scarcity exists only when supply is insufficient to meet demand. C) Scarcity exists only when a shortage exists. D) Scarcity can be eliminated when a country becomes richer.
answer
A
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The problem of economic scarcity applies A) only in industrially developed countries, because resources are scarce in these nations. B) only in underdeveloped countries, because there are no productive resources in these nations. C) only in economic systems that are just beginning to develop, because specialized resources are scarce in developing nations. D) to economic systems in all nations, regardless of their level of development.
answer
D
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In every economic system, choices must be made because resources A) are unlimited, but human desires and wants are limited. B) are limited, but human desires and wants are unlimited. C) are unlimited, and so are human desires and wants. D) are limited, and so are human desires and wants.
answer
B
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In 2006, hurricanes damaged many parts of Texas, destroying homes, businesses, schools, and infrastructure. In strictly economic terminology, these hurricanes are said to have caused A) scarcity, because the damages made food and shelter scarce. B) scarcity, because some goods were difficult to get. C) shortages, because supplies were cut off and goods were destroyed. D) tradeoffs, because some areas of the country were damaged when others were not.
answer
C
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In the production of goods and services, trade-offs exist because A) not all production is efficient. B) society has only a limited amount of productive resources. C) buyers and sellers often must negotiate prices. D) human wants and needs are limited at a particular point in time.
answer
B
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The difference between scarcity and a shortage is that A) scarcity is caused by poverty and shortages are caused by natural disasters. B) shortages are a type of scarcity caused by natural disasters while scarcity is caused by human errors. C) scarcity always is a part of human life while shortages usually are temporary. D) shortages are always part of human life while scarcity is usually temporary.
answer
C
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Human resources that perform the functions of organizing, managing, and assembling the other factors of production are called A) physical capital. C) entrepreneurs. B) venture capital. D) productive capital.
answer
C
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In economic terminology, when a resource is used to produce output it is referred to as A) an intangible. C) a service. B) a factor of production. D) a fifth element.
answer
B
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All of the following are examples of physical capital EXCEPT A) buildings. C) company stocks and bonds. B) machinery. D) a hydroelectric power plant.
answer
C
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Entrepreneurs are important to market economies because A) they engage in risk taking and innovation. B) they make up a large portion of low-skilled labor. C) they take few risks and thereby, suffer fewer bankruptcies. D) they represent the bulk of employment at large corporations.
answer
A
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Which of the following are considered factors of production? I. Land II. Labor III. Physicalcapital IV. Entrepreneurship A) I and II only C) I, II and III only B) I and III only D)I,II,IIIandIV
answer
D
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All of the following are economic resources, or factors of production EXCEPT A) land. C) money. B) physical capital. D) entrepreneurship.
answer
C
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n economics, the term physical capital A) refers to funds used by businesses to acquire goods and services. B) refers to all manufactured resources used for production. C) refers to the process of raising funds through the stock market. D) defines the stock of merchandise already produced.
answer
B
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Human capital is A) what people get from physical capital. B) the accumulation of skills, training and education of workers. C) the value obtained from selling stocks and bonds. D) the human resources that perform the function of raising capital.
answer
B
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The conversion of resources into consumer goods or services is called A) human capital. B) production C) opportunity cost. D) absolute advantage
answer
B
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Services can be thought of as A) unvalued goods. B) unwanted goods. C) free goods. D) intangible goods.
answer
D
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Economic goods are defined as A) tangible items only. B) production. D) absolute advantage. B) unwanted goods. D) intangible goods. B) services only. C) anything from which an individual derives satisfaction. D) any item which is available in sufficient quantity at zero price.
answer
C
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If the quantity desired of something exceeds the amount available at zero price, that item is called A) a service. C) an intangible good. B) an economic good. D) a bad.
answer
B
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At a zero price, which of the following conditions is TRUE for an economic good? A) Its quantity supplied exceeds its quantity demanded. B) Its quantity demanded exceeds its quantity supplied. C) Its quantity demanded equals its quantity supplied. D) Scarcity disappears.
answer
B
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Extremely cold winter weather has destroyed oranges in Florida. The freeze has caused A) scarcity because there are less oranges now than people want. B) scarcity because people have to switch to other types of citrus fruits. C) a shortage because people cannot obtain as many oranges as they wish to buy at the pre-freeze price. D) a shortage because the orange growers will have less income.
answer
C
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Economic goods are A) abundant goods, about which we must constantly make decisions about their best use. B) all imaginable items from which individuals derive satisfaction or happiness. C) goods that are scarce, for which the quantity demanded exceeds the quantity supplied at a zero price. D) goods that are scarce, for which the quantity demanded exceeds the quantity supplied at any price.
answer
C
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Scarcity exists because A) the majority of people in the world are poor. B) people are too greedy and refuse to share what they have with others. C) human wants exceed what can be produced with the limited resources available. D) not enough new technology is being used to eliminate scarcity.
answer
C
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Production refers to A) physically producing material goods only. B) any activity carried on by a firm, whether a corporation, partnership, or sole proprietorship. C) any activity that results in the conversion of resources into goods and services that can be consumed. D) any activity that causes a material conversion of manufactured goods.
answer
C
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Which of the following activities are production? A) Combining flour, milk, and eggs to make cookies. B) Moving coal from southern Illinois to an electrical power plant in northern Illinois. C) Taking ice cubes from a tray to put in a drink. D) All of the above are production.
answer
D
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By going to school an individual will obtain which resource? A) Money C) Knowledge B) Physical capital D) Human capital
answer
D
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Naturally occurring diamonds are an example of A) land. C) physical capital. B) labor. D) human capital.
answer
A
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A man-made resource such as a building or a machine is an example of which resource? A) Entrepreneurial ability C) Physical capital B) Labor D) Human capital
answer
C
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Which of the following is NOT an economic resource? A) Money C) Coal B) Low-skilled labor D) An engineer
answer
A
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Bonnie is a self employed. She makes floral arrangements in a building she rents. She owns the delivery vehicle and has hired a delivery driver. She is an example of A) Entrepreneurial ability C) Physical capital B) Labor D) Human capital
answer
A
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Which of the following is a true statement? A) All goods are economic goods. B) All economic goods are goods, but not all goods are economic goods. C) Economic goods and goods mean the same thing. D) Economic goods do not include services while goods do include services.
answer
B
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Economic bads are items A) for which the produced quantity is less than the amount desired at a positive price. B) for which the desired quantity is less than what nature provides at a zero price. C) that individuals desire but which receive social disapproval. D) that receive social approval but which governments dislike.
answer
B
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From the economistʹs point of view, A) wants and needs are exactly the same. B) a want is a lifesaving necessity. C) needs are objectively undefinable. D) we all have wants but only very poor people have needs.
answer
C
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A friend says, ʺI really, really need a new car.ʺ As an economist, youʹre thinking A) Right! Everyone needs a new car. B) This is an example of how objectively undefinable needs are. Many would argue that this friend could get along just fine with a reliable used car. C) If this friend says she needs a new car, then we must all agree that a new car is a need and not just a want. D) that a new car can only be considered a need if at least 51% of the public agrees.
answer
B
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Why is it that all of our wants cannot be satisfied? A) Because of shortages B) Because we cannot seem to decide what we really want C) Because other people try to change your mind about what you want D) Because limited resources mean all the goods we want cannot be obtained
answer
D
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Economists are concerned with an individualʹs A) needs because needs represent the most important goods to an individual. B) needs because economists define needs to be the goods people need to survive. C) wants because, unlike needs, wants lead to shortages in the economy. D) wants because the existence of wants leads to scarcity.
answer
D
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The opportunity cost of attending college might best be described as A) the money that must be paid in order to attend college. B) the lowest-valued alternative use of the studentʹs time. C) the highest-valued alternative use of the studentʹs time. D) the value that the student attaches to not working.
answer
C
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The value of the best alternative sacrificed to obtain something you want is referred to as A) explicit cost. B) opportunity cost. C) marginal cost. D) sunk cost.
answer
B
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Bill Bonecrusher graduates from college with a choice of playing professional football at $2 million a year or coaching for $50,000 a year. He decides to play football, but eight years later he quits football to make movies for $3 million a year. His opportunity cost at graduation was ________ and eight years later was ________. A) $50,000; $2 million C) $2 million; $3 million B) $2 million; $2 million D) $50,000; $50,000
answer
A
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Fred and Ann both decide to see the same movie when they are given free movie tickets. We know that A) both bear an opportunity cost since they could have done other things instead of see the movie. B) both bear the same opportunity cost since they are doing the same thing. C) the cost of going to the movie is greater for the one who had more choices to do other things. D) neither bears an opportunity cost because the tickets were free.
answer
A
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For every choice a person makes it can be assumed that A) the chooser has full knowledge of the situation. B) some opportunity cost was involved. C) there is a fifty-fifty chance the choice was the wrong one. D) a good is involved and satisfaction is gained.
answer
B
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Which of the following statements is FALSE about opportunity cost? A) Cost is always foregone opportunity. B) Opportunity cost is the next best alternative. C) John wants a burger and fries. The concept of opportunity cost applies even though he has enough funds to buy both. D) Opportunity cost exists only for goods with monetary values.
answer
D
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Stephanie has decided to eat lunch between classes. She has ranked her choices, from highest to lowest as, (1) turkey sandwich, (2) tuna sandwich, (3) slice of cheese pizza, (4) cheeseburger. The opportunity cost of the eating turkey sandwich is A) the combined value of the tuna sandwich, slice of cheese pizza and cheeseburger. B) the value of tuna sandwich, the next best choice. C) the value of the cheeseburger. D) zero since she has satisfied a want.
answer
B
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Opportunity cost exists because of A) poverty. B) scarcity. C) greed. D) self-interest.
answer
B
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Opportunity cost is illustrated on the production possibilities curve by a A) bowed-out shape of the curve. C) shift to the left of the curve. B) shift to the right of the curve. D) movement along the curve.
answer
D
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If opportunity costs are constant, then A) the production possibilities curve does not exist. B) the production possibilities curve bows outward. C) the production possibilities curve is a negatively sloped straight line. D) factors of production must not be fully employed.
answer
C
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The production possibilities curve represents A) the maximum amount of labor and capital available to society. B) the combinations of goods and services among which consumers are indifferent. C) the maximum combination of goods and services that can be produced with fixed resources and technology, given efficient use of the resources. D) the maximum rate of growth of capital and labor in a country.
answer
C
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If all resources were perfectly adaptable for alternative uses, the production possibilities curve would A) be bowed out. C) be a straight line. B) be bowed in. D) not exist.
answer
C
question
A straight-line production possibilities curve takes this shape because A) the opportunity cost of producing a good is constant. B) the opportunity cost of producing more of a good is decreasing. C) resources are better suited for producing one output than another. D) resources are fixed.
answer
A
question
Using the above table but now the bakery bakes 30 pizzas and 240 loaves of bread (alternative B), moving from alternative B to alternative D (90 pizzas and 120 loaves of bread), what is the opportunity cost of one pizza pie? A) 2.5 loaves of bread C) 0.5 loaf of bread B) 2 loaves of bread D) 150 loaves of bread
answer
B
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Which of the following statements indicates the idea of trade-offs? A) ʺI chose the road less traveled.ʺ C) ʺYouʹve got me under your spell.ʺ B) ʺThe devil made me do it.ʺ D) ʺAlways give it the best that you can.ʺ
answer
A
question
The production possibilities curve shows all possible combinations of A) two goods that are desired by society. B) two goods that can be efficiently produced with a given set of resources. C) two goods that can be purchased given the prices of the goods. D) two goods that two countries can trade with each other.
answer
B
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Which of the following would result in a movement along the production possibilities curve? A) A fall in the unemployment rate B) Growth in the capital stock C) Population growth D) A change in the outputs of two goods that a society chooses to produce
answer
D
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A movement along the production possibilities curve would imply that A) the labor force has grown. B) productivity has increased. C) society has chosen a different set of outputs. D) productivity has declined because workers are demanding more leisure.
answer
C
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If the production possibilities curve is a downward sloping straight line, then A) resources are highly specialized, making it difficult to use them for alternative uses. B) technological change has increased. C) production is efficient only when producing at the mid-point. D) all resources must be perfectly adaptable for alternative uses.
answer
D
question
Suppose an acre of land yields 100 bushels of corn and that one bushel of corn provides enough seed for one-quarter of an acre of land. The opportunity cost of consuming another 100 bushels of corn today is A) 100 bushels of corn next year. C) 10 bushels of corn next year. B) 25 bushels of corn next year. D) 2.5 bushels of corn next year.
answer
B
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If an economy is operating at a point inside the production possibilities curve, then A) societyʹs resources are being inefficiently utilized. B) the curve will move to the left. C) societyʹs resources are being used to produce too many consumer goods. D) economic policy must implemented to slow growth of the economy further.
answer
A
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The production possibilities curve bows out because A) production is efficient. C) production is inefficient. B) of the law of increasing additional cost. D) resources are not being fully utilized.
answer
B
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All points inside the production possibilities curve indicate A) a lack of sufficient supply. C) the law of increasing relative cost. B) inefficiency in production. D) the law of decreasing relative cost.
answer
B
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How does an economy represented by a straight-line production possibilities curve differ from one represented by a traditional production possibilities curve with a bowed shape? A) In the economy represented by a straight-line production possibilities curve, there is no opportunity cost. B) In the economy represented by a straight-line production possibilities curve, neither good is scarce. C) In the economy represented by a straight-line production possibilities curve, the law of increasing relative cost does not apply. D) In the economy represented by a straight-line production possibilities curve, changing the amount of resources devoted to the production of each good will not alter the amount of each good actually produced.
answer
C
question
Which of the following will most likely happen when better technology is used in production? A) an upward movement along the production possibilities curve B) an outward shift of the production possibilities curve C) an inward shift of the production possibilities curve D) a downward movement along the production possibilities curve
answer
B
question
Which of the following statements is NOT an assumption underlying the production possibilities curve? A) Resources are fully and efficiently employed. B) Technology is fixed. C) Production occurs over some specified time period. D) The amount of resources available for production can be changed quickly.
answer
D
question
A production possibilities curve with quantities of clothing and food on the axes shows which of the following? I. A society cannot have an unlimited amount of each good. II. For an efficient society, an increase in clothing production will necessitate a decrease in food production. III. Asocietywillalwaysproducethemaximumamountofbothclothingandfood. A) I only B) II only C) III only D) Both I and II
answer
D
question
Technology is best defined as A) societyʹs pool of applied knowledge concerning the production of goods and services. B) the maximum output that can be obtained from a stock of physical capital. C) output inside the production possibilities curve. D) the utilization of more resources for the same amount of production.
answer
A
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Suppose the current unemployment rate is 15 percent. If it rises to 20 percent, A) the economy will move up along the production possibilities curve. B) the economy will move closer to the production possibilities curve. C) the production possibilities curve will shift inward. D) the economy will operate farther inside the production possibilities curve.
answer
D
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The law of increasing additional costs is due to A) taxes. B) scarcity. C) the fact that it is more difficult to use resources efficiently the more society produces. D) the fact that resources are not perfectly adaptable for alternative uses.
answer
D
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All mutually beneficial trades have taken place. This implies that A) the production possibilities curve is bowed out. B) society is inside the production possibilities curve. C) economic efficiency prevails in the society. D) society is on the constant cost portion of its production possibilities curve.
answer
C
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Some resources are better suited to produce certain goods than other resources. This fact leads to A) a linear production possibilities curve. C) the law of increasing additional cost. B) inefficiency in the economy. D) increases in technology.
answer
C
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During periods of unemployment A) the economy operates at a point inside the production possibilities curve. B) the economy operates at a point outside the production possibilities curve. C) the production possibilities curve shifts inward. D) the production possibilities curve shifts outward.
answer
A
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Which of the following is assumed when constructing a production possibilities curve? A) a fixed amount of resources C) resources of a given quality B) the efficient use of resources D) All of the above are correct.
answer
D
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In order for an economy to increase its production possibilities, the economy must A) be very efficient. B) increase inputs. C) increase its wants. D) reduce output.
answer
B
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The discovery of new natural resources will cause A) the economy to move closer to the production possibilities curve. B) the production possibilities curve to shift up and to the right. C) an upward movement along the curve. D) the curve to shift back and to the left.
answer
B
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The production possibilities curve can shift inward when A) production increases. B) employment increases. C) the stock of productive capital rises. D) a country experiences a natural disaster.
answer
D
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Economic growth can be pictured in a production possibilities curve diagram by A) making the production possibilities curve more bowed out. B) making the production possibilities curve less bowed out. C) shifting the production possibilities curve out. D) shifting the production possibilities curve in.
answer
C
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All of the following would cause the production possibilities curve to shift outward EXCEPT A) an improvement in technology. B) an increase in the amount of labor available. C) a decline in the unemployment rate. D) an increase in the level of capital stock.
answer
C
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The production possibilities curve shifts outward when A) the law of increasing additional cost takes hold. B) the economy is producing efficiently. C) we produce more consumption goods over productive investment in equipment. D) there is an increase in resources or technology.
answer
D
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If an economy produces only steel and wheat, a new fertilizer will A) cause the production of wheat to increase at every point on a production possibilities curve but not affect the production of steel, that is the curve moves outward on the wheat axis only. B) cause the production of both wheat and steel to increase at every point along the production possibilities curve, that is the curve moves outward on both the wheat axis and the steel axis. C) not affect the production of either wheat or steel. D) cause the production of steel to increase at every point along the production possibilities curve but not affect the production of wheat, that is the curve moves outward on the steel axis only.
answer
A
question
A production possibilities curve will shift inward A) when the unemployment rate increases. B) when production is inefficient. C) when resources are expanding. D) when a war destroys the capital goods of a country.
answer
D
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Generally, if a nation produces more consumer goods than capital goods A) more of all goods may be produced in the future. B) less of all goods may be produced in the future. C) about the same amount of capital goods may be produced in the future as are being produced today. D) society will have to forego future consumption of capital goods .
answer
B
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The use of goods and services for personal satisfaction is known as A) the law of increasing relative cost. B) specialization. C) comparative advantage. D) consumption.
answer
D
question
A country that must reduce current consumption to increase future consumption possibilities A) must be allocating resources inefficiently. B) must be producing along the production possibilities curve. C) must be producing outside the production possibilities curve. D) must not have private ownership of property.
answer
B
question
Whenever a society forgoes current consumption to invest in capital goods, A) it will have less to consume next year. B) it will be easier for that society to consume less in the future because people will become accustomed to less. C) that society can consume more in the future. D) it will be forced to produce fewer capital goods in the future.
answer
C
question
At a point on a production possibilities curve, opportunity cost of more capital goods today is A) fewer capital goods in the future. B) fewer consumer goods in the future. C) fewer consumer goods today. D) more unemployed resources in the future.
answer
C
question
When an economy sacrifices production of consumption goods to produce more capital goods, we would expect that the production possibilities curve will A) shift outward. B) shift inward. C) become a straight line. D) shift about in random fashion.
answer
A
question
Capital goods A) are a special type of consumption goods. B) are consumed because they enhance the enjoyment consumers obtain from other goods and services. C) are goods used to make consumer goods and services. D) lead to inward shifts of a production possibilities curve.
answer
C
question
If a country increased the production of its capital goods, then A) the more consumption of goods we can have today. B) the less consumption we can have today, but we will have more in the future. C) the more unemployed resources there will be in the future. D) the more unemployed resources there are today.
answer
B
question
The opportunity cost of more consumption of goods today is A) lower consumption of goods in the future. B) fewer capital goods in the future. C) more capital goods today. D) more unemployment both today and in the future.
answer
A
question
Using productive resources to make capital goods requires that we A) get everyone to agree on the best use of those resources. B) get government approval of our plan to make capital goods. C) forgo some level of current consumption. D) prove that the existence of the capital goods will not cause any environmental damage.
answer
C
question
Trading off capital goods for increasing amounts of consumer goods today will most likely result in A) increased long-term growth. B) decreased long-term growth. C) decreased prices in consumer goods. D) increases in the quantity of consumer goods.
answer
B
question
If the production of capital goods is shown along the horizontal axis of a production possibilities curve, and the production of consumer goods is shown along the vertical axis of a production possibilities curve, and the economy desires to have a rapid rate of economic growth, then the economy should produce at a point A) near the middle of the curve dividing resources equally between the production of consumer and capital goods. B) at a point near the vertical axis concentrating on the production of consumer goods. C) at a point near the horizontal axis concentrating on the production of capital goods. D) at a point inside the curve allowing the economy to adjust rapidly to changes in economic activity.
answer
C
question
If a country wants to promote future growth, it should A) produce more capital goods today. B) produce more consumer goods today. C) produce only economic goods. D) produce only needed goods.
answer
A
question
Comparative advantage is A) when a country can produce a good at a lower opportunity cost compared to other countries. B) when a country can produce all goods more quickly than any other country. C) when the production possibilities curve shifts outward to the right. D) only for individuals and not countries.
answer
A
question
If a person can make $70,000 as an accountant, $60,000 as a chef, $20,000 as a mechanic, and nothing as an opera singer, he or she has a comparative advantage in A) accounting. B) being a chef. C) being a mechanic. D) opera singing.
answer
A
question
Carlos is an executive of a major corporation. Boris is a baker. Carlos earns a salary ten times as large as the salary Boris earns, and Carlos has a much larger oven for baking break. Carlos can make a loaf of bread that tastes better than Borisʹs bread but Boris can bake faster. A) Carlos has an absolute and comparative advantage over Boris in making bread. B) Carlos has an absolute but not comparative advantage over Boris in making bread. C) Carlos had a comparative but not absolute advantage over Boris in making bread. D) Carlos does not have an absolute or comparative advantage over Boris in making bread.
answer
B
question
Which is the best example of specialization? A) A high school math teacher who teaches only calculus. B) A firm that produces both luggage and cooking oil. C) A person whose job includes accounting, personnel and maintenance tasks. D) A high school math teacher who teaches algebra and calculus.
answer
A
question
Specialization can occur because A) governments pass laws that require it. B) varying skills differentiate workers. C) absolute advantage creates specialization among laborers. D) managers and laborers share job tasks.
answer
B
question
If a countryʹs production possibilities curve gets more bowed out over time, it is an indication that A) technological change has taken place. B) society is learning to use its resources more efficiently. C) the quantity of labor and capital have increased. D) resources have become more highly specialized.
answer
D
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Absolute advantage is A) producing at a lower opportunity cost. B) producing a good using the fewest inputs. C) producing a good only when demand is high. D) producing a good that requires imported components.
answer
B
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A person has a comparative advantage in an activity whenever she A) has an absolute advantage in the activity. B) can perform the activity at a lower opportunity cost than another person can. C) can do the activity in less time than anyone else. D) can do everything better than anyone else.
answer
B
question
Comparative advantage is always a(n) ________ concept. A) absolute B) efficiency C) relative D) monetary
answer
C
question
Comparative advantage implies choosing the activity that A) has a high opportunity cost. B) is inside the production possibilities frontier. C) has the lowest opportunity cost. D) does not demand any specialization.
answer
C
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The division of labor refers to A) workers being assigned specific tasks. B) workers performing multiple tasks. C) separating men and women in the workforce. D) creating jobs that all people can perform at the same level.
answer
A
question
Suppose that at a bicycle shop, instead of having each worker assemble an entire bicycle themselves, one person welds the frames, another person works on the braking system, another person works on the tires, and another person works on the gears. This best demonstrates the concept of A) division of labor. B) microeconomics. C) comparative advantage. D) absolute advantage.
answer
A
question
John and Mary work at a bakery. John can decorate either 10 ice-cream cakes or 4 wedding cakes; Mary can decorate either 8 ice-cream cakes or 2 wedding cakes. According to this scenario, A) the opportunity cost of decorating a wedding cake for Mary is 4 ice-cream cakes. B) the opportunity cost of decorating a wedding cake for Mary is 1/4 ice -cream cake. C) the opportunity cost of decorating a wedding cake for Mary is 2 1/2 ice-cream cakes. D) the opportunity cost of decorating a wedding cake for Mary is 2/5 ice -cream cake.
answer
A
question
John and Mary work eight hours at a bakery. John can decorate either 10 ice -cream cakes or 4 wedding cakes; Mary can decorate either 8 ice-cream cakes or 2 wedding cakes. According to this scenario, A) Mary has the absolute advantage in decorating wedding cakes. B) John has the absolute advantage in decorating wedding cakes. C) Mary has the comparative advantage in decorating wedding cakes. D) John has the comparative advantage in decorating ice-cream cakes.
answer
B
question
John and Mary work eight hours at a bakery. John can decorate either 10 ice -cream cakes or 4 wedding cakes; Mary can decorate either 8 ice-cream cakes or 2 wedding cakes. According to this scenario, A) Mary has the absolute advantage in decorating wedding cakes. B) Mary has the absolute advantage in decorating ice-cream cakes. C) Mary has the comparative advantage in decorating ice-cream cakes. D) John has the comparative advantage in decorating ice-cream cakes.
answer
C
question
One of the benefits of specialization is A) greater output. B) people enjoy doing one repetitive task over and over. C) specialists cost less to hire. D) training costs are higher.
answer
A
question
When Adam Smithʹs ten pin workers specialized, they were able to increase output of pins in a day from 200 to 48,000. One reason for the increase in pin output was due to A) the time saved when workers do not need to shift from one task to another. B) the boredom the workers suffered when they stopped making a whole pin and only concentrated on one task such as painting the heads white. C) new machinery. D) the bonus they received when they produced more pins.
answer
A
question
Two factories make wooden chairs. If the workers in factory A make each chair from start to finish and the workers in factory B divide labor, one would assume A) the chairs in factory A are of higher quality. B) the workers in factory B have more job satisfaction. C) factory B can take advantage of division of labor and produce more efficiently. D) factory A can take advantage of division of labor and produce more efficiently
answer
C
question
Assuming Vice President Smith has to sacrifice more than his assistant in order to engage in full-time typing, we would say that his assistant has a(n) ________ advantage in typing versus Mr. Smith. A) absolute B) comparative C) pecuniary D) overwhelming
answer
B
question
If Vice President Smith is a better typist than his assistant, he is said to have a(n) ________ advantage in typing over his assistant. A) absolute B) unusual C) relative D) overwhelming
answer
A
question
When a country or a region of a country specializes in producing the product that has the lower opportunity cost compared to another country or region, it is practicing A) absolute advantage. B) cost disadvantage. C) regional advantage. D) comparative advantage.
answer
D
question
You should specialize in the production of a good if you have A) an absolute advantage. B) more capital resources than your trading partner. C) more human resources than your trading partner. D) a comparative advantage.
answer
D
question
One reason why economists often use models in their analysis is that
answer
a model helps us to understand, explain, and predict economic phenomena in the real world.
question
Which statement most accurately defines economics?
answer
Economics is the study of how people make choices to satisfy their wants.
question
When the text refers to rational self-interest, it means
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looking out for what is best for you as an individual.
question
"No individual should have less than $50,000 income in the United States in 2014" is an example of
answer
a normative statement.
question
A politician says that the government should tax behavior they want less of and subsidize behavior they want more of. This is an example of
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using incentives to alter behavior
question
A macroeconomist would study
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the national economy's unemployment level
question
In the production of goods and services, trade-offs exist because
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society has only a limited amount of productive resources.
question
One of the opportunity costs of your time associated with going to college is
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giving up employment earnings while in college.
question
A straight-line production possibilities curve takes this shape because
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the opportunity cost of producing a good is constant
question
Why specialize?
answer
It usually increases productivity.
question
When Adam Smith stated that economic activity was directed by an "invisible hand", he was referring to the fact that:
answer
competitive markets motivate even self-interested individuals to pursue productive activities that also serve the public interest.
question
The allocative mechanism and the nature of ownership of means of production in North Korea are best described by which one of the following pairs?
answer
command based and mainly public/collective
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