Question 1

Figure 1.3
 
-Shirley can choose between peanut butter pretzels and caramel coated popcorn for her evening snack. According to economists, her _____ cost of consuming caramel coated popcorn would be the forgone peanut butter pretzels.

Accepted Answer

A)  internal
B)  opportunity
C)  average
D)  transaction
E)  social

Question 2

Given below is the production possibilities schedule for a small island nation in South Pacific that produces capital and consumer goods.Table 2.3
 
-Refer to Table 2.3. Identify the correct statement.

Accepted Answer

A)  The best the economy can do is to produce 10 units of capital goods and 4 units of consumer goods.
B)  The best the economy can do is to produce no capital goods and produce 2 units of consumer goods.
C)  If the economy produces 10 units of capital goods and no units of consumer goods, there is unemployment.
D)  If the economy produces 4 units of capital goods, it can manage to produce only 3 units of consumer goods.
E)  In order to produce the 10th unit of capital goods, 4 units of consumer goods must be forgone.

Question 3

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4
 
-Free trade leads to an overall improvement in the standard of living in a country because everything is produced at the lowest possible cost.

Accepted Answer

A) True 
 B)False

Question 4

The table given below represents the output per hour of cookies and chilies in Ohio and Iowa.Table 2.4
 
-The difference between what can be produced and consumed without specialization and trade and with specialization and trade is called:

Accepted Answer

A)  comparative advantage.
B)  a tradeoff.
C)  marginal cost.
D)  opportunity cost.
E)  gains from trade.

Question 5

The table given below represents butter and ham production by two countries Norway and Sweden.Table 2.5
 
-Refer to Table 2.5 and identify the correct statement.

Accepted Answer

A)  Norway has an absolute advantage in butter production.
B)  Sweden has a comparative advantage in ham production.
C)  Norway has an absolute advantage in ham production.
D)  Trade is not possible between these two nations.
E)  It would be advantageous for Sweden to trade with Norway.

Question 6

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4
 
-If using the same resources, the U.S. workers can produce more of any good than Mexican workers, then the United States should produce every good.

Accepted Answer

A) True 
 B)False

Question 7

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4
 
-Gains from trade can be realized if each country specializes in the production of a good in which it has a comparative advantage.

Accepted Answer

A) True 
 B)False

Question 8

Figure 1.3
 
-Opportunity cost is best defined as:

Accepted Answer

A)  the sum of all alternatives given up when a choice is made.
B)  the money spent once a choice is made.
C)  the highest-valued alternative given up when a choice is made.
D)  the difference between the cost price and the selling price of a good.
E)  the cost of capital resources used in the production of additional capital.

Question 9

Figure 1.3
 
-In economics, the concept of opportunity cost is:

Accepted Answer

A)  negated by ensuring that the government has a role in a capitalist society.
B)  defined to be the highest-valued alternative that must be forgone when a choice is made.
C)  best illustrated by knowing why consumers choose one good over another.
D)  quantifiable only if you know the real dollar price of the goods and services you are giving up to consume something.
E)  the methodology that government economists use to determine the total amount of the national debt.

Question 10

The table given below represents the output per hour of cookies and chilies in Ohio and Iowa.Table 2.4
 
-Voluntary free trade results in:

Accepted Answer

A)  population growth.
B)  inflation.
C)  higher living standards.
D)  income disparity.
E)  unemployment.

Question 11

Following is the production possibilities schedule for an economy producing two goods, Good A and Good B.Table 2.1
 
-A point outside the production possibilities curve [PPC]:

Accepted Answer

A)  represents inefficient use of resources.
B)  represents the prevalence of unemployment.
C)  is attainable if all resources are used efficiently.
D)  represents more resources than are currently available.
E)  will never be attainable, even if the quantity of resources increases.

Question 12

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4
 
-Julio makes wine and beer. Last year he made 20 bottles of wine and 20 cases of beer. If the price of grapes goes down (making wine cheaper to make), Julio will be able to make the same amount of wine and more beer.

Accepted Answer

A) True 
 B)False

Question 13

Figure 1.3
 
-Which of the following best describes a tradeoff?

Accepted Answer

A)  An office executive enrolling into a management course to develop her skills.
B)  An investor buying stocks of a start-up company.
C)  A businessman investing a portion of company's profit in research and development.
D)  A college student sacrificing a few hours of study time to work at the town cafeteria.
E)  A worker purchasing a new car with her bonus earnings.

Question 14

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4
 
-Refer to Figure 2.4 and identify the correct statement.

Accepted Answer

A)  Germany has comparative advantage in the production of cars.
B)  Korea has comparative advantage in the production of cars.
C)  Germany has comparative advantage in the production of food.
D)  Korea has a lower opportunity cost for making cars.
E)  Germany has a lower opportunity cost for making food.

Question 15

Figure 1.3
 
-If you have a choice of consuming either two apples, three oranges, or one candy bar, the opportunity cost of the candy bar is:

Accepted Answer

A)  two apples.
B)  three oranges.
C)  two apples and three oranges.
D)  two apples or three oranges, whichever you value more.
E)  the difference in the prices of the three options.

Question 16

The table given below represents the output per hour of cookies and chilies in Ohio and Iowa.Table 2.4
 
-Refer to Table 2.4. The opportunity cost of a cookie in Iowa is:

Accepted Answer

A)  8 chilies.
B)  4 chilies.
C)  96 chilies.
D)  less than in Ohio.
E)  the same as in Ohio.

Question 17

Following is the production possibilities schedule for an economy producing two goods, Good A and Good B.Table 2.1
 
-Suppose a society begins by producing 3 units of X and 4 units of Y and then alters production to 4 units of X and 4 units of Y. If the quantity and quality of resources and the technology being used remain unchanged, then:

Accepted Answer

A)  3 units of X and 4 units of Y are a combination best represented by a point inside the production possibilities curve [PPC].
B)  we can conclude that the society has moved along the PPC.
C)  we can conclude that resources were being fully utilized at 3 units of X and 4 units of Y.
D)  we can conclude that resources were being efficiently utilized at 3 units of X and 4 units of Y.
E)  3 units of X and 4 units of Y are a combination best represented by a point outside the PPC.

Question 18

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4
 
-Specialization according to comparative advantage followed by free trade makes every economy better off.

Accepted Answer

A) True 
 B)False

Question 19

The figure given below represents the production possibilities curve for goods and services in an economy.Figure 2.3
 
-Which of the following actions is most likely to cause a rightward shift in a production possibilities curve [PPC]?

Accepted Answer

A)  Shifting from the production of one product to the production of another product
B)  Shifting all resources to the production of one product
C)  Employing idle resources
D)  Using fewer resources in production
E)  Increasing the technological know-how used in production

Question 20

The table given below represents butter and ham production by two countries Norway and Sweden.Table 2.5
 
-The concept of comparative advantage applies:

Accepted Answer

A)  only to people with at least a high school diploma.
B)  only to people who are currently employed.
C)  to situations in which you have information about the salary levels of those with whom you are competing for a job.
D)  to every case of trade or exchange.
E)  only to goods that are sold in the domestic market.

Exam 2: Scarcity and Opportunity Costs

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4 -Specialization according to comparative advantage followed by free trade makes every economy better off.

Correct Answer
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The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4 -Free trade leads to an overall improvement in the standard of living in a country because everything is produced at the lowest possible cost.

Correct Answer
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The table given below represents the output per hour of cookies and chilies in Ohio and Iowa.Table 2.4 -Voluntary free trade results in:

Correct Answer
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The table given below represents the output per hour of cookies and chilies in Ohio and Iowa.Table 2.4 -Refer to Table 2.4. The opportunity cost of a cookie in Iowa is:

Correct Answer
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The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4 -Gains from trade can be realized if each country specializes in the production of a good in which it has a comparative advantage.

Correct Answer
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Figure 1.3 -Which of the following best describes a tradeoff?

Correct Answer
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Figure 1.3 -If you have a choice of consuming either two apples, three oranges, or one candy bar, the opportunity cost of the candy bar is:

Correct Answer
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Figure 1.3 -Opportunity cost is best defined as:

Correct Answer
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Given below is the production possibilities schedule for a small island nation in South Pacific that produces capital and consumer goods.Table 2.3 -Refer to Table 2.3. Identify the correct statement.

Correct Answer
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The table given below represents the output per hour of cookies and chilies in Ohio and Iowa.Table 2.4 -The difference between what can be produced and consumed without specialization and trade and with specialization and trade is called:

Correct Answer
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The figure given below represents the production possibilities curve for goods and services in an economy.Figure 2.3 -Which of the following actions is most likely to cause a rightward shift in a production possibilities curve [PPC]?

Correct Answer
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The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4 -Refer to Figure 2.4 and identify the correct statement.

Correct Answer
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Correct Answer
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The table given below represents butter and ham production by two countries Norway and Sweden.Table 2.5 -The concept of comparative advantage applies:

Correct Answer
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The table given below represents butter and ham production by two countries Norway and Sweden.Table 2.5 -Refer to Table 2.5 and identify the correct statement.

Correct Answer
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Figure 1.3 -Shirley can choose between peanut butter pretzels and caramel coated popcorn for her evening snack. According to economists, her _____ cost of consuming caramel coated popcorn would be the forgone peanut butter pretzels.

Correct Answer
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Figure 1.3 -In economics, the concept of opportunity cost is:

Correct Answer
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Correct Answer
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The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4 -If using the same resources, the U.S. workers can produce more of any good than Mexican workers, then the United States should produce every good.

Correct Answer
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Following is the production possibilities schedule for an economy producing two goods, Good A and Good B.Table 2.1 -A point outside the production possibilities curve [PPC]:

Correct Answer
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Exam 2: Scarcity and Opportunity Costs

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4 -Specialization according to comparative advantage followed by free trade makes every economy better off.

Correct AnswerverifiedShow Answer

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4 -Free trade leads to an overall improvement in the standard of living in a country because everything is produced at the lowest possible cost.

Correct AnswerverifiedShow Answer

The table given below represents the output per hour of cookies and chilies in Ohio and Iowa.Table 2.4 -Voluntary free trade results in:

Correct AnswerverifiedShow Answer

The table given below represents the output per hour of cookies and chilies in Ohio and Iowa.Table 2.4 -Refer to Table 2.4. The opportunity cost of a cookie in Iowa is:

Correct AnswerverifiedShow Answer

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4 -Gains from trade can be realized if each country specializes in the production of a good in which it has a comparative advantage.

Correct AnswerverifiedShow Answer

Figure 1.3 -Which of the following best describes a tradeoff?

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Figure 1.3 -If you have a choice of consuming either two apples, three oranges, or one candy bar, the opportunity cost of the candy bar is:

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Figure 1.3 -Opportunity cost is best defined as:

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Given below is the production possibilities schedule for a small island nation in South Pacific that produces capital and consumer goods.Table 2.3 -Refer to Table 2.3. Identify the correct statement.

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The table given below represents the output per hour of cookies and chilies in Ohio and Iowa.Table 2.4 -The difference between what can be produced and consumed without specialization and trade and with specialization and trade is called:

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The figure given below represents the production possibilities curve for goods and services in an economy.Figure 2.3 -Which of the following actions is most likely to cause a rightward shift in a production possibilities curve [PPC]?

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The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4 -Refer to Figure 2.4 and identify the correct statement.

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Correct AnswerverifiedShow Answer

The table given below represents butter and ham production by two countries Norway and Sweden.Table 2.5 -The concept of comparative advantage applies:

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The table given below represents butter and ham production by two countries Norway and Sweden.Table 2.5 -Refer to Table 2.5 and identify the correct statement.

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Figure 1.3 -Shirley can choose between peanut butter pretzels and caramel coated popcorn for her evening snack. According to economists, her _____ cost of consuming caramel coated popcorn would be the forgone peanut butter pretzels.

Correct AnswerverifiedShow Answer

Figure 1.3 -In economics, the concept of opportunity cost is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4 -If using the same resources, the U.S. workers can produce more of any good than Mexican workers, then the United States should produce every good.

Correct AnswerverifiedShow Answer

Following is the production possibilities schedule for an economy producing two goods, Good A and Good B.Table 2.1 -A point outside the production possibilities curve [PPC]:

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