Question 1

Waiting in line to get a free ticket does not involve any opportunity cost.

Accepted Answer

A) True 
 B)False

Question 2

Although all points on the PPF are efficient,that alone does not tell us which point is "best" for the society.

Accepted Answer

A) True 
 B)False

Question 3

A production possibilities frontier shows the combinations of various goods that should be produced.

Accepted Answer

A) True 
 B)False

Question 4

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.

Question 5

Economists use the term capital to describe that factor of production that includes human-made resources such as factories,buildings,machinery and tools.

Accepted Answer

A) True 
 B)False

Question 6

As a general rule,an increase in the capital available to a society

Accepted Answer

A)   reduces the slope of the production possibilities frontier, making it shallower.
B)   increases the slope of the production possibilities frontier, making it steeper.
C)   shifts the production possibilities frontier outward, away from the origin.
D)   shifts the production possibilities frontier inward, toward the origin.
E)   makes the production possibilities frontier more bowed out.

Question 7

Which of the following ideas of Adam Smith has religious overtones?

Accepted Answer

A)   comparative advantage
B)   aggregate demand
C)   perfect competition
D)   rational expectations
E)   invisible hand

Question 8

A large government faces a production possibilities frontier much like a business firm does.

Accepted Answer

A) True 
 B)False

Question 9

The notion of opportunity cost can be represented graphically by the

Accepted Answer

A)   area inside the production possibilities frontier.
B)   slope of the production possibilities frontier.
C)   vertical distance from the horizontal axis to the production possibilities frontier.
D)   horizontal distance from the vertical axis to the production possibilities frontier.
E)   sum of the horizontal and vertical distances to the production possibilities frontier.

Question 10

In order to make an optimal choice we must use

Accepted Answer

A)   percentage analysis.
B)   total analysis.
C)   average analysis.
D)   marginal analysis.

Exam 3: The Fundamental Economic Problem: Scarcity and Choice

A production possibilities frontier shows the combinations of various goods that should be produced.

Correct Answer
verified

Economists use the term capital to describe that factor of production that includes human-made resources such as factories,buildings,machinery and tools.

Correct Answer
verified

Although all points on the PPF are efficient,that alone does not tell us which point is "best" for the society.

Correct Answer
verified

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

Correct Answer
verified

The notion of opportunity cost can be represented graphically by the

Correct Answer
verified

In order to make an optimal choice we must use

Correct Answer
verified

Waiting in line to get a free ticket does not involve any opportunity cost.

Correct Answer
verified

A large government faces a production possibilities frontier much like a business firm does.

Correct Answer
verified

As a general rule,an increase in the capital available to a society

Correct Answer
verified

Which of the following ideas of Adam Smith has religious overtones?

Correct Answer
verified

Exam 3: The Fundamental Economic Problem: Scarcity and Choice

A production possibilities frontier shows the combinations of various goods that should be produced.

Correct AnswerverifiedShow Answer

Economists use the term capital to describe that factor of production that includes human-made resources such as factories,buildings,machinery and tools.

Correct AnswerverifiedShow Answer

Although all points on the PPF are efficient,that alone does not tell us which point is "best" for the society.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The notion of opportunity cost can be represented graphically by the

Correct AnswerverifiedShow Answer

In order to make an optimal choice we must use

Correct AnswerverifiedShow Answer

Waiting in line to get a free ticket does not involve any opportunity cost.

Correct AnswerverifiedShow Answer

A large government faces a production possibilities frontier much like a business firm does.

Correct AnswerverifiedShow Answer

As a general rule,an increase in the capital available to a society

Correct AnswerverifiedShow Answer

Which of the following ideas of Adam Smith has religious overtones?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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