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To experience future economic growth,an economy must allocate some of its scarce resources to investment.

A) True
B) False

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When economists talk about a trade-off between "guns and butter," they mean:


A) Society can produce more military goods without giving up any consumer goods.
B) Military goods are an inefficient use of resources.
C) The production of more military goods may require fewer consumer goods.
D) Consumer goods are always more costly than military goods.

E) C) and D)
F) B) and C)

Correct Answer

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Economic growth always takes the form of


A) An expansion of production possibilities.
B) A change in how goods are distributed.
C) A movement along the production possibilities curve.
D) Higher prices.

E) All of the above
F) A) and B)

Correct Answer

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Table 1.1 - Production possibilities and opportunity costs of missiles and houses Table 1.1 shows the tradeoff between different combinations of missile production and home construction,ceteris paribus.Complete the table by calculating the required opportunity costs for both missiles and houses.Then answer the indicated question(s) . Table 1.1 - Production possibilities and opportunity costs of missiles and houses Table 1.1 shows the tradeoff between different combinations of missile production and home construction,ceteris paribus.Complete the table by calculating the required opportunity costs for both missiles and houses.Then answer the indicated question(s) . -In Table 1.1,the highest opportunity cost of missiles in terms of houses is: A) 500 houses per missile. B) 4,000 houses per missile. C) 7,000 houses per missile. D) 10,000 houses per missile. -In Table 1.1,the highest opportunity cost of missiles in terms of houses is:


A) 500 houses per missile.
B) 4,000 houses per missile.
C) 7,000 houses per missile.
D) 10,000 houses per missile.

E) A) and C)
F) A) and B)

Correct Answer

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Welfare programs are designed to address the:


A) "HOW" question.
B) "FOR WHOM" question.
C) Issue of scarce resources.
D) "WHAT" question.

E) A) and B)
F) A) and C)

Correct Answer

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Which of the following best describes the way resources are allocated in the U.S.economy?


A) By rules.
B) By markets.
C) By regulations.
D) By government.

E) C) and D)
F) A) and C)

Correct Answer

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According to the Latin phrase ceteris paribus:


A) Resources are limited.
B) Things do not remain equal.
C) There is no government intervention.
D) Nothing else changes.

E) None of the above
F) B) and D)

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Which of the following groups of words best represents macroeconomic goals?


A) Full employment,price stability,economic growth.
B) Rate of production,choice of factors of production,and the pricing of specific goods.
C) Welfare of individual consumers and business firms.
D) Land,labor,and capital.

E) B) and C)
F) A) and B)

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Capital includes the machinery and buildings used to produce goods and services.

A) True
B) False

Correct Answer

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Government intervention designed to address market failure:


A) May either improve or worsen the mix of output produced.
B) Will definitely worsen the mix of output produced.
C) Will definitely improve the mix of output produced.
D) Never has an impact on the mix of output produceD.

E) A) and B)
F) A) and C)

Correct Answer

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In the model where we assume that all parcels of land are the same,the relationship between food and timber produced when all land is in use is:


A) Linear and inverse.
B) Direct and linear.
C) Inverse and nonlinear.
D) Direct and nonlinear.

E) None of the above
F) B) and C)

Correct Answer

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A

Laissez faire refers to:


A) The belief that government can make better choices than the market about the mix of output.
B) The economic theory of Karl Marx.
C) A belief of nonintervention by government in the market mechanism.
D) A preference for central planning.

E) A) and D)
F) All of the above

Correct Answer

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Which of the following is NOT a reason why the U.S.government intervenes in the economy?


A) To ensure the safety of products.
B) To reduce pollution.
C) To make a profit for the government.
D) To improve the mix of output.

E) B) and C)
F) A) and B)

Correct Answer

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Table 1.1 - Production possibilities and opportunity costs of missiles and houses Table 1.1 shows the tradeoff between different combinations of missile production and home construction,ceteris paribus.Complete the table by calculating the required opportunity costs for both missiles and houses.Then answer the indicated question(s) . Table 1.1 - Production possibilities and opportunity costs of missiles and houses Table 1.1 shows the tradeoff between different combinations of missile production and home construction,ceteris paribus.Complete the table by calculating the required opportunity costs for both missiles and houses.Then answer the indicated question(s) . -In Table 1.1,the lowest opportunity cost of houses in terms of missiles is: A) 0.00010 of a missile per house. B) 0.00050 of a missile per house. C) 7.00 missiles per house. D) 10. -In Table 1.1,the lowest opportunity cost of houses in terms of missiles is:


A) 0.00010 of a missile per house.
B) 0.00050 of a missile per house.
C) 7.00 missiles per house.
D) 10.

E) B) and D)
F) All of the above

Correct Answer

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Figure 1.1 - Production Possibilities and Opportunity Costs: Linear Model versus Non-Linear Model Figure 1.1 - Production Possibilities and Opportunity Costs: Linear Model versus Non-Linear Model In the linear production possibilities model,we assume each of five equally-sized parcels of land contributes the same to the production of food and timber: 6 units of timber or 3 units of food. By contrast,in the non-linear model,we will assume that there are five different types of land in equal-sized plots and that each plot may contribute as follows to the production of -Assuming all land is equally productive in either use,how much output of each type will be produced with 2/5 of the land in timber production and 3/5 of the land in food production? A) 12 units of timber and 9 units of food B) 9 units of timber and 12 units of food C) 18 units of timber and 9 units of food D) 9 units of timber and 18 units of food In the linear production possibilities model,we assume each of five equally-sized parcels of land contributes the same to the production of food and timber: 6 units of timber or 3 units of food. By contrast,in the non-linear model,we will assume that there are five different types of land in equal-sized plots and that each plot may contribute as follows to the production of Figure 1.1 - Production Possibilities and Opportunity Costs: Linear Model versus Non-Linear Model In the linear production possibilities model,we assume each of five equally-sized parcels of land contributes the same to the production of food and timber: 6 units of timber or 3 units of food. By contrast,in the non-linear model,we will assume that there are five different types of land in equal-sized plots and that each plot may contribute as follows to the production of -Assuming all land is equally productive in either use,how much output of each type will be produced with 2/5 of the land in timber production and 3/5 of the land in food production? A) 12 units of timber and 9 units of food B) 9 units of timber and 12 units of food C) 18 units of timber and 9 units of food D) 9 units of timber and 18 units of food -Assuming all land is equally productive in either use,how much output of each type will be produced with 2/5 of the land in timber production and 3/5 of the land in food production?


A) 12 units of timber and 9 units of food
B) 9 units of timber and 12 units of food
C) 18 units of timber and 9 units of food
D) 9 units of timber and 18 units of food

E) B) and D)
F) B) and C)

Correct Answer

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When society struggles with how to divide up the "economic pie," it is responding to the:


A) "FOR WHOM" question.
B) "HOW" question.
C) "WHAT" question.
D) "WHY" question.

E) B) and D)
F) All of the above

Correct Answer

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Given that resources are scarce:


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

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

Correct Answer

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The invisible hand refers to the price signal in a free market economy.

A) True
B) False

Correct Answer

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True

In order to understand a particular graph,it is important to know:


A) The total number of squares in the grid.
B) Which variable is on the vertical axis and which is on the horizontal axis.
C) Where a point on the graph is.
D) Where the maximum quantity is.

E) C) and D)
F) None of the above

Correct Answer

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A line that slopes upward from left to right has a:


A) Negative slope.
B) Positive slope.
C) Slope that changes as you move along the curve.
D) Slope of zero.

E) A) and B)
F) None of the above

Correct Answer

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B

Showing 1 - 20 of 135

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