Question 1

Scarcity is

Accepted Answer

A)  a shortage of goods and services.
B)  poverty and misery.
C)  a situation in which the resources for producing the goods and services that people desire are sufficient to satisfy people's desires.
D)  a situation in which the resources required to produce the goods and services that people desire are insufficient to satisfy all wants.E) B) and D)
F) All of the above

Question 2

Which of the following sets of terms describes the problem of scarcity in economics?

Accepted Answer

A)  goods, land, and needs
B)  labor, needs, and opportunity costs
C)  choices, opportunity costs, and trade-offs
D)  production, consumption, and wantsE) All of the above
F) A) and D)

Question 3

What causes the production possibility curve to be bowed out?

Accepted Answer

A bowed production possibility curve ind...

Question 4

It is correct to state that a society which is on its production possibilities curve is

Accepted Answer

A)  underutilizing is resources.
B)  technologically inefficient.
C)  consuming too much output.
D)  fully utilizing its productive resources.E) All of the above
F) B) and C)

Question 5

Which is the best example of an intangible good?

Accepted Answer

A)  the car you dream of owning but cannot afford
B)  the suit you hope will make a good impression when you go on job interviews
C)  the textbook study guide you hope will prepare you to perform well on examinations
D)  the advice and expertise provided by the music store clerk who sold you that CDE) A) and B)
F) A) and C)

Question 6

Briefly explain how specialization and trade can benefit nations.

Accepted Answer

When nations specialize in what they hav...

Question 7

In constructing a production possibilities curve, all of the following are assumed EXCEPT

Accepted Answer

A)  resources are fully employed.
B)  the quantity and quality of resources being used is fixed.
C)  the state of technology is improving.
D)  the time period involved is fixed.E) A) and B)
F) A) and C)

Question 8

Distinguish between scarcity and shortages.

Accepted Answer

Scarcity exists because the wants of hum...

Question 9

-In the above figure, the opportunity cost of moving from producing 75 guitars and 25 ukuleles to producing 25 guitars and 75 ukuleles is

Accepted Answer

A)  25 guitars.
B)  75 ukuleles.
C)  25 ukuleles.
D)  50 guitars.E) B) and D)
F) A) and B)

Question 10

Division of labor refers to

Accepted Answer

A)  dividing tasks up into several subtasks and having one person perform these subtasks in a certain order.
B)  the separation of hourly workers from salaried workers.
C)  assigning different workers to different tasks.
D)  separating union workers from nonunion workers.E) A) and B)
F) C) and D)

Question 11

The problem of economic scarcity applies

Accepted Answer

A)  only in 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 to an economy with an insufficient supply of money.
D)  to the economies of all nations, regardless of their level of development.E) A) and B)
F) A) and C)

Question 12

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

Accepted Answer

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

Question 13

-In the above figure, the production of 25 guitars and 25 ukuleles is

Accepted Answer

A)  efficient production.
B)  inefficient production.
C)  impossible production.
D)  not possible since production always occurs along the PPC.E) A) and D)
F) None of the above

Question 14

How is economic growth shown by the production possibilities curve?

Accepted Answer

A)  by shifting the curve to the right
B)  by moving the curve to the left
C)  by moving up the existing curve
D)  by changing the shape of the curve from a straight line to one that is bowedE) None of the above
F) A) and C)

Question 15

In economics, international trade is based on the existence of

Accepted Answer

A)  absolute advantage between countries.
B)  relative advantage between countries.
C)  comparative advantage between countries.
D)  output advantage between countries.E) A) and B)
F) A) and C)

Question 16

What is the "division of labor"?
 How is the division of labor related to production?

Accepted Answer

The division of labor refers to the segr...

Question 17

Even though mass transit systems such as buses are available in most cities in the United States, many residents decide to drive to work in their own vehicles because

Accepted Answer

A)  the opportunity cost of riding a bus is too high for them.
B)  there is no opportunity cost of them to drive.
C)  they are not aware of the opportunity cost of driving.
D)  they do not behave according to the economic way of thinking.E) A) and D)
F) B) and C)

Question 18

A point inside a production possibilities curve indicates

Accepted Answer

A)  resources are not being used efficiently.
B)  resources are being used very efficiently.
C)  opportunity costs are constant.
D)  an output combination that is unobtainable with the current resource and technology levelsE) A) and B)
F) All of the above

Question 19

Economists argue that unhindered international trade leads to an efficient outcome. What is meant by "an efficient outcome" in this context?

Accepted Answer

A)  an outcome in which wages are roughly equal around the world
B)  an outcome in which the standard of living is roughly equal around the world
C)  an outcome in which an individual can choose to specialize in a certain line of work and be certain that he or she can make a living at that until retirement
D)  an outcome in which resources are devoted to their most efficient useE) C) and D)
F) None of the above

Question 20

When two countries specialize in the production of different goods and trade with each other, it is most likely each country will

Accepted Answer

A)  export the goods in which it has a comparative advantage.
B)  export the goods in which it has an absolute advantage.
C)  import the goods in which it has a comparative advantage.
D)  import the goods in which it has an absolute advantage.E) A) and B)
F) None of the above

Exam 2: Scarcity and the World of Trade-Offs

-In the above figure, the opportunity cost of moving from producing 75 guitars and 25 ukuleles to producing 25 guitars and 75 ukuleles is

Correct AnswerverifiedShow Answer

The problem of economic scarcity applies

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What is the "division of labor"? How is the division of labor related to production?

Correct AnswerverifiedThe division of labor refers to the segr...View AnswerShow Answer

What causes the production possibility curve to be bowed out?

Correct AnswerverifiedA bowed production possibility curve ind...View AnswerShow Answer

How is economic growth shown by the production possibilities curve?

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Which of the following sets of terms describes the problem of scarcity in economics?

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Briefly explain how specialization and trade can benefit nations.

Correct AnswerverifiedWhen nations specialize in what they hav...View AnswerShow Answer

It is correct to state that a society which is on its production possibilities curve is

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Distinguish between scarcity and shortages.

Correct AnswerverifiedScarcity exists because the wants of hum...View AnswerShow Answer

In constructing a production possibilities curve, all of the following are assumed EXCEPT

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A point inside a production possibilities curve indicates

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-In the above figure, the production of 25 guitars and 25 ukuleles is

Correct AnswerverifiedShow Answer

Economists argue that unhindered international trade leads to an efficient outcome. What is meant by "an efficient outcome" in this context?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which is the best example of an intangible good?

Correct AnswerverifiedShow Answer

In economics, international trade is based on the existence of

Correct AnswerverifiedShow Answer

Division of labor refers to

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When two countries specialize in the production of different goods and trade with each other, it is most likely each country will

Correct AnswerverifiedShow Answer

Even though mass transit systems such as buses are available in most cities in the United States, many residents decide to drive to work in their own vehicles because

Correct AnswerverifiedShow Answer

Scarcity is

Correct AnswerverifiedShow Answer

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The division of labor refers to the segr...
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A bowed production possibility curve ind...
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When nations specialize in what they hav...
View Answer

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Correct Answer
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Scarcity exists because the wants of hum...
View Answer

Correct Answer
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