Question 1

A point on the frontier of the production possibilities curve is:

Accepted Answer

A)   attainable and the economy is efficient.
B)   attainable, but the economy is inefficient.
C)   unattainable, but the economy is inefficient.
D)   unattainable and the economy is efficient.E) A) and B)
F) C) and D)

Question 2

Economics may best be defined as:

Accepted Answer

A)   the interaction between macro and micro considerations.
B)   the study of the behaviour of people and institutions in the production, distribution, and consumption of scarce goods.
C)   the empirical testing of value judgments through the use of induction and deduction.
D)   the use of policy to refute facts and hypotheses.E) A) and D)
F) None of the above

Question 3

1/4 X. B)  X = 1/4 Y. C)  Y = .4X. D)  Y = 1/4 X - 50." class="answers-bank-image d-inline" rel="preload" >
-Refer to the above diagram. The equation which shows the relationship between Y and X is:

Accepted Answer

A)   Y = 50 + 1/4 X.
B)   X = 1/4 Y.
C)   Y = .4X.
D)   Y = 1/4 X - 50.E) A) and C)
F) A) and B)

Question 4

The production possibilities curve below shows the hypothetical relationship between the production of capital goods and consumer goods in an economy.
 
-Refer to the above table. What is the opportunity cost of producing the third unit of capital goods?

Accepted Answer

A)   4 units of consumer goods
B)   5 units of consumer goods
C)   6 units of consumer goods
D)   7 units of consumer goodsE) A) and D)
F) None of the above

Question 5

Deltonia produces both consumer and capital goods. If it reduces the percentage of its output devoted to capital goods, then:

Accepted Answer

A)   its rate of growth will tend to decline.
B)   its production possibilities curve will necessarily shift to the left.
C)   it must also reduce the percentage of its output devoted to consumer goods.
D)   its rate of growth will tend to increase.E) B) and C)
F) C) and D)

Question 6

The production possibilities curve shows various combinations of two products which an economy can produce when achieving full employment and productive efficiency.

Accepted Answer

A) True 
 B)False

Question 7

If we are considering the relationship between two variables and release the "other things equal" assumption, we would expect:

Accepted Answer

A)   the relationship to change from direct to inverse.
B)   the line representing that relationship on a graph to change locations.
C)   the data points representing the relationship to become more randomly scattered.
D)   the relationship to change from inverse to direct.E) A) and B)
F) None of the above

Question 8

If the output of product X is such that marginal benefit equals marginal cost:

Accepted Answer

A)   the correct amount of resources is being allocated to X's production.
B)   the value of producing X and the value of producing alternative products with available resources is the same.
C)   there can be no net gain to society by allocating either more or less resources to producing X.
D)   all of the above are true.E) All of the above
F) C) and D)

Question 9

-Refer to the above diagram. Which line(s)  show(s)  a positive relationship between x and y?

Accepted Answer

A)   A only
B)   both A and D
C)   A, B, and D
D)   both C and EE) None of the above
F) A) and D)

Question 10

How is the economic perspective reflected in lines for fast food?

Accepted Answer

A)   Customers select the shortest line because they have perfect information.
B)   Customers select the shortest line because they believe it will reduce their time cost of obtaining food.
C)   Lines will typically be of unequal length because of the inefficiencies in counter service.
D)   The set of food choices is often too complex for most customers and thus creates long lines.E) A) and B)
F) All of the above

Question 11

Normative statements are expressions of facts.

Accepted Answer

A) True 
 B)False

Question 12

-In line (1)  on the above graph, the variables x and y are:

Accepted Answer

A)   nonlinearly related.
B)   positively related.
C)   negatively related.
D)   inversely related.E) B) and C)
F) A) and D)

Question 13

-The fact that the slope of the production possibilities curve becomes steeper as we move down along the curve indicates that:

Accepted Answer

A)   the principle of increasing opportunity costs is relevant.
B)   society's resources are limited.
C)   the opportunity cost of producing each product is constant.
D)   resources are perfectly shiftable between alternative uses.E) A) and C)
F) None of the above

Question 14

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

Question 15

A positive statement is concerned with:

Accepted Answer

A)   some goal which is desirable to society.
B)   what should be.
C)   what is.
D)   the formulation of economic policy.E) None of the above
F) A) and C)

Question 16

-Refer to the above diagram. Starting at point A, the opportunity cost of producing each successive unit of tractors is:

Accepted Answer

A)   a constant 2 units of bread.
B)   2, 4, 6, and 8 units of bread.
C)   8, 6, 4, and 2 units of bread.
D)   the reciprocal of the output of tractors.E) B) and D)
F) A) and B)

Question 17

-The slope of a line parallel to the horizontal axis is:

Accepted Answer

A)   zero.
B)   one.
C)   infinite.
D)   one-half.E) A) and B)
F) C) and D)

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. Which of the following is an accurate verbal statement of the described relationship?

Accepted Answer

A)   There is no regular or dependable relationship between business investment and the interest rate.
B)   The amount of business investment is unaffected by changes in the interest rate.
C)   Investment spending by businesses varies inversely with the interest rate.
D)   Investment spending by businesses varies directly with the interest rate.E) B) and C)
F) A) and C)

Question 19

Slope of lines are especially important in economics because:

Accepted Answer

A)   they measure marginal changes.
B)   they always tell us something about profits.
C)   positive slopes are always preferred to negative slopes.
D)   they always relate to resource and output scarcity.E) None of the above
F) B) and C)

Question 20

The marginal benefit curve is:

Accepted Answer

A)   upward sloping because of increasing marginal opportunity costs.
B)   upward sloping because successive units of a specific product yield less and less extra utility.
C)   downward sloping because of increasing marginal opportunity costs.
D)   downward sloping because successive units of a specific product yield less and less extra utility.E) A) and C)
F) A) and B)

Exam 1: Limits, Alternatives, and Choices

The marginal benefit curve is:

Correct Answer
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If the output of product X is such that marginal benefit equals marginal cost:

Correct Answer
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A positive statement is concerned with:

Correct Answer
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-The fact that the slope of the production possibilities curve becomes steeper as we move down along the curve indicates that:

Correct Answer
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-Refer to the above diagram. Which line(s) show(s) a positive relationship between x and y?

Correct Answer
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-Refer to the above diagram. Starting at point A, the opportunity cost of producing each successive unit of tractors is:

Correct Answer
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Normative statements are expressions of facts.

Correct Answer
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-The slope of a line parallel to the horizontal axis is:

Correct Answer
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If we are considering the relationship between two variables and release the "other things equal" assumption, we would expect:

Correct Answer
verified

The production possibilities curve shows various combinations of two products which an economy can produce when achieving full employment and productive efficiency.

Correct Answer
verified

Economics may best be defined as:

Correct Answer
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A point on the frontier of the production possibilities curve is:

Correct Answer
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Slope of lines are especially important in economics because:

Correct Answer
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International specialization and trade:

Correct Answer
verified

Deltonia produces both consumer and capital goods. If it reduces the percentage of its output devoted to capital goods, then:

Correct Answer
verified

Correct Answer
verified

The production possibilities curve below shows the hypothetical relationship between the production of capital goods and consumer goods in an economy. -Refer to the above table. What is the opportunity cost of producing the third unit of capital goods?

Correct Answer
verified

-Refer to the above diagram. The equation which shows the relationship between Y and X is:

Correct Answer
verified

-In line (1) on the above graph, the variables x and y are:

Correct Answer
verified

How is the economic perspective reflected in lines for fast food?

Correct Answer
verified

Exam 1: Limits, Alternatives, and Choices

The marginal benefit curve is:

Correct AnswerverifiedShow Answer

If the output of product X is such that marginal benefit equals marginal cost:

Correct AnswerverifiedShow Answer

A positive statement is concerned with:

Correct AnswerverifiedShow Answer

-The fact that the slope of the production possibilities curve becomes steeper as we move down along the curve indicates that:

Correct AnswerverifiedShow Answer

-Refer to the above diagram. Which line(s) show(s) a positive relationship between x and y?

Correct AnswerverifiedShow Answer

-Refer to the above diagram. Starting at point A, the opportunity cost of producing each successive unit of tractors is:

Correct AnswerverifiedShow Answer

Normative statements are expressions of facts.

Correct AnswerverifiedShow Answer

-The slope of a line parallel to the horizontal axis is:

Correct AnswerverifiedShow Answer

If we are considering the relationship between two variables and release the "other things equal" assumption, we would expect:

Correct AnswerverifiedShow Answer

The production possibilities curve shows various combinations of two products which an economy can produce when achieving full employment and productive efficiency.

Correct AnswerverifiedShow Answer

Economics may best be defined as:

Correct AnswerverifiedShow Answer

A point on the frontier of the production possibilities curve is:

Correct AnswerverifiedShow Answer

Slope of lines are especially important in economics because:

Correct AnswerverifiedShow Answer

International specialization and trade:

Correct AnswerverifiedShow Answer

Deltonia produces both consumer and capital goods. If it reduces the percentage of its output devoted to capital goods, then:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The production possibilities curve below shows the hypothetical relationship between the production of capital goods and consumer goods in an economy. -Refer to the above table. What is the opportunity cost of producing the third unit of capital goods?

Correct AnswerverifiedShow Answer

-Refer to the above diagram. The equation which shows the relationship between Y and X is:

Correct AnswerverifiedShow Answer

-In line (1) on the above graph, the variables x and y are:

Correct AnswerverifiedShow Answer

How is the economic perspective reflected in lines for fast food?

Correct AnswerverifiedShow Answer

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