Question 1

An economy cannot produce at a point outside of its production possibilities curve because human economic wants are insatiable.

Accepted Answer

A) True 
 B)False

Question 2

Answer the question on the basis of the data given in the following production possibilities table:  \quad \quad \quad \quad \quad \quad \quad \quad  Production Possibilities (Alternatives)  ‾\underline{	ext { Production Possibilities (Alternatives)  }} Production Possibilities (Alternatives)  ​ 
 A‾B‾C‾D‾E‾F‾ Capital Goods 543210 onsumer Goods 059121415\begin{array}{ccccccc}&\underline{A}&\underline{B}&\underline{C}& \underline{D} &\underline{E}&\underline{F} \ 	ext { Capital Goods } &5&4&3&2&1&0\	ext { onsumer Goods } & 0 & 5 & 9 & 12 & 14 & 15 \end{array} Capital Goods  onsumer Goods ​A​50​B​45​C​39​D​212​E​114​F​015​   Refer to the table.A total output of 3 units of capital goods and 4 units of consumer goods:

Accepted Answer

A)   is irrelevant because the economy is capable of producing a larger total output.
B)   will result in the maximum rate of growth available to this economy.
C)   would involve an inefficient use of the economy's scarce resources.
D)   is unobtainable in this economy. E) A) and C)
F) B) and C)

Question 3

Ben says that "an increase in the tax on beer will raise its price." Holly argues that "taxes should be increased on beer because college students drink too much." We can conclude that:

Accepted Answer

A)   Ben's statement is normative,but Holly's is positive.
B)   Holly's statement is normative,but Ben's is positive.
C)   Both statements are normative.
D)   Both statements are positive.E) B) and C)
F) A) and D)

Question 4

You should decide to go to a movie:

Accepted Answer

A)   if the marginal cost of the movie exceeds its marginal benefit.
B)   if the marginal benefit of the movie exceeds its marginal cost.
C)   if your income will allow you to buy a ticket.
D)   because movies are enjoyable.E) C) and D)
F) B) and D)

Question 5

In deciding whether to study for an economics quiz or go to a movie,one is confronted by the idea(s) of:

Accepted Answer

A)   scarcity and opportunity costs.
B)   money and real capital.
C)   complementary economic goals.
D)   full production.E) A) and B)
F) C) and D)

Question 6

The construction of a production possibilities curve assumes:

Accepted Answer

A)   the quantities of all resources are unlimited.
B)   technology is fixed.
C)   some resources are unemployed.
D)   there is no inflation in the economy.E) None of the above
F) All of the above

Question 7

(Last Word) The post hoc fallacy and the correlation problem both relate to:

Accepted Answer

A)   the calculation of marginal costs and marginal benefits of any economic activity.
B)   the issue of determining causation.
C)   the frequent inability of households and businesses to behave rationally.
D)   the trade-off problem associated with competing goals.E) A) and D)
F) A) and B)

Question 8

The slope of the typical production possibilities curve:

Accepted Answer

A)   is positive.
B)   increases as one moves southeast along the curve.
C)   is constant as one moves down the curve.
D)   decreases as one moves southeast along the curve.E) B) and D)
F) A) and C)

Question 9

The production possibilities curve shows:

Accepted Answer

A)   the various combinations of two goods that can be produced when society employs all of its scarce resources.
B)   the minimum outputs of two goods that will sustain a society.
C)   the various combinations of two goods that can be produced when some resources are unemployed.
D)   the ideal,but unattainable,combinations of two goods that would maximize consumer satisfactions.E) B) and C)
F) A) and D)

Question 10

The point on the production possibilities curve that is most desirable can be found by:

Accepted Answer

A)   estimating the marginal costs of both products in real or physical terms.
B)   comparing marginal benefits and marginal costs.
C)   determining where least-cost production occurs.
D)   calculating where economic growth will be greatest.E) A) and D)
F) A) and C)

Question 11

Other things equal,an increase in a consumer's money income:

Accepted Answer

A)   increases the amount of utility a consumer receives from a given quantity of a good.
B)   shifts the individual's budget line rightward because she can now purchase more of both products.
C)   eliminates the individual's economizing problem.
D)   causes the consumer to choose a different combination of goods along a given budget line.E) B) and C)
F) A) and C)

Question 12

The slope of a straight line can be determined by:

Accepted Answer

A)   comparing the absolute horizontal change to the absolute vertical change between two points on the line.
B)   comparing the absolute vertical change to the absolute horizontal change between two points on the line.
C)   taking the reciprocal of the vertical intercept.
D)   comparing the percentage vertical change to the percentage horizontal change between two points on the line.E) A) and C)
F) A) and D)

Question 13

Purposeful behavior suggests that:

Accepted Answer

A)   everyone will make identical choices.
B)   resource availability exceeds economic wants.
C)   individuals may make different choices because of different desired outcomes.
D)   an individual's economic goals cannot involve trade-offs.E) B) and C)
F) A) and D)

Question 14

The production possibilities curve shows various combinations of two products that an economy can produce when achieving full employment.

Accepted Answer

A) True 
 B)False

Question 15

Unemployment:

Accepted Answer

A)   causes the production possibilities curve to shift outward.
B)   can exist at any point on a production possibilities curve.
C)   is illustrated by a point outside the production possibilities curve.
D)   is illustrated by a point inside the production possibilities curve.E) All of the above
F) None of the above

Question 16

Which of the following is a positive statement?

Accepted Answer

A)   A humidity level of 90 percent is too high.
B)   It is too hot to run outside when the temperature exceeds 80 degrees.
C)   The temperature is 92 degrees today.
D)   Summer evenings are nice when it cools off to around 70 degrees.E) C) and D)
F) All of the above

Question 17

A production possibilities curve shows:

Accepted Answer

A)   that resources are unlimited.
B)   that people prefer one of the goods more than the other.
C)   the maximum amounts of two goods that can be produced,assuming the full use of available resources.
D)   combinations of capital and labor necessary to produce specific levels of output.E) None of the above
F) All of the above

Question 18

(Last Word) Which of the following best illustrates the post hoc,ergo propter hoc fallacy?

Accepted Answer

A)   Because it was 90 degrees today,I worked up a sweat playing tennis.
B)   I took the day off work to go to the beach and that's why it rained.
C)   Because it rained at the football game,my new sweater got wet.
D)   Because I have studied diligently this semester,my grade average has improved.E) A) and B)
F) All of the above

Question 19

Which of the following is a correct statement?

Accepted Answer

A)   Economic concepts or laws that are valid during depression are necessarily valid during prosperity.
B)   Although they are generalizations,economic laws are useful because they allow us to predict and therefore influence or adjust to events.
C)   Economics is as scientific as are physics and chemistry because economic laws are as quantitatively precise as the laws of physics or chemistry.
D)   Because economics is concerned with questions of "ought," it is a branch of applied ethics and not scientific.E) C) and D)
F) A) and D)

Question 20

Economics may best be defined as the:

Accepted Answer

A)   interaction between macro and micro considerations.
B)   social science concerned with how individuals,institutions,and society make optimal choices under conditions of scarcity.
C)   empirical testing of value judgments through the use of logic.
D)   study of why people are rational.E) B) and D)
F) A) and D)

Exam 1: Limits, Alternatives, and Choices

Unemployment:

Correct Answer
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In deciding whether to study for an economics quiz or go to a movie,one is confronted by the idea(s) of:

Correct Answer
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Ben says that "an increase in the tax on beer will raise its price." Holly argues that "taxes should be increased on beer because college students drink too much." We can conclude that:

Correct Answer
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(Last Word) Which of the following best illustrates the post hoc,ergo propter hoc fallacy?

Correct Answer
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The production possibilities curve shows:

Correct Answer
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Which of the following is a positive statement?

Correct Answer
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Which of the following is a correct statement?

Correct Answer
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(Last Word) The post hoc fallacy and the correlation problem both relate to:

Correct Answer
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Correct Answer
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The slope of a straight line can be determined by:

Correct Answer
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A production possibilities curve shows:

Correct Answer
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An economy cannot produce at a point outside of its production possibilities curve because human economic wants are insatiable.

Correct Answer
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Other things equal,an increase in a consumer's money income:

Correct Answer
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Economics may best be defined as the:

Correct Answer
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Purposeful behavior suggests that:

Correct Answer
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The construction of a production possibilities curve assumes:

Correct Answer
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You should decide to go to a movie:

Correct Answer
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The production possibilities curve shows various combinations of two products that an economy can produce when achieving full employment.

Correct Answer
verified

The slope of the typical production possibilities curve:

Correct Answer
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The point on the production possibilities curve that is most desirable can be found by:

Correct Answer
verified

Exam 1: Limits, Alternatives, and Choices

Unemployment:

Correct AnswerverifiedShow Answer

In deciding whether to study for an economics quiz or go to a movie,one is confronted by the idea(s) of:

Correct AnswerverifiedShow Answer

Ben says that "an increase in the tax on beer will raise its price." Holly argues that "taxes should be increased on beer because college students drink too much." We can conclude that:

Correct AnswerverifiedShow Answer

(Last Word) Which of the following best illustrates the post hoc,ergo propter hoc fallacy?

Correct AnswerverifiedShow Answer

The production possibilities curve shows:

Correct AnswerverifiedShow Answer

Which of the following is a positive statement?

Correct AnswerverifiedShow Answer

Which of the following is a correct statement?

Correct AnswerverifiedShow Answer

(Last Word) The post hoc fallacy and the correlation problem both relate to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The slope of a straight line can be determined by:

Correct AnswerverifiedShow Answer

A production possibilities curve shows:

Correct AnswerverifiedShow Answer

An economy cannot produce at a point outside of its production possibilities curve because human economic wants are insatiable.

Correct AnswerverifiedShow Answer

Other things equal,an increase in a consumer's money income:

Correct AnswerverifiedShow Answer

Economics may best be defined as the:

Correct AnswerverifiedShow Answer

Purposeful behavior suggests that:

Correct AnswerverifiedShow Answer

The construction of a production possibilities curve assumes:

Correct AnswerverifiedShow Answer

You should decide to go to a movie:

Correct AnswerverifiedShow Answer

The production possibilities curve shows various combinations of two products that an economy can produce when achieving full employment.

Correct AnswerverifiedShow Answer

The slope of the typical production possibilities curve:

Correct AnswerverifiedShow Answer

The point on the production possibilities curve that is most desirable can be found by:

Correct AnswerverifiedShow Answer

Correct Answer
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