Question 1

The society must also make choices under conditions of scarcity.This problem arises from the fact that:

Accepted Answer

A)   society's wants are limited but the resources are not.
B)   resources are scarce relative to society's wants.
C)   societies behave only in their self-interest.
D)   society's wants and resources are both unlimited.E) None of the above
F) B) and D)

Question 2

-Refer to the above production possibilities curves.Curve (a) is the current curve for the economy.Other things being equal,society's current choice of point P on curve (a) will:

Accepted Answer

A)   allow it to achieve more rapid economic growth than would the choice of point N.
B)   entail a slower rate of economic growth than would the choice of point N.
C)   entail the same rate of growth as would the choice of point N.
D)   be unobtainable because it exceeds the productive capacity of the economy.E) B) and C)
F) A) and D)

Question 3

-Refer to the above diagram.Which line(s) show(s) a negative 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) B) and C)
F) A) and C)

Question 4

-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) All of the above
F) B) and C)

Question 5

If an economy is operating on its production possibilities curve for consumer goods and capital goods,this means that:

Accepted Answer

A)   it is impossible to produce more consumer goods.
B)   resources cannot be reallocated between the two goods.
C)   it is impossible to produce more capital goods.
D)   more consumer goods can only be produced at the cost of fewer capital goods.E) A) and C)
F) B) and C)

Question 6

Production possibilities tables for two countries,North Cantina and South Cantina:
North Cantina Production possibilities (alternatives) 
  South Cantina Production possibilities (alternatives) 
 
-Refer to the above tables.Suppose that resources in North Cantina and South Cantina are identical in quantity and quality.We can conclude that:

Accepted Answer

A)   South Cantina has better technology than North Cantina in producing both capital and consumer goods.
B)   North Cantina has better technology than South Cantina in producing both capital and consumer goods.
C)   North Cantina is growing more rapidly than South Cantina.
D)   North Cantina has better technology than South Cantina in producing consumer goods.E) A) and C)
F) A) and B)

Question 7

The "economic perspective" refers to:

Accepted Answer

A)   macroeconomic phenomena,but not microeconomic phenomena.
B)   microeconomic phenomena,but not macroeconomic phenomena.
C)   the making of rational decisions in a context of marginal costs and marginal benefits.
D)   unlimited resources in a context of limited material wants.E) B) and D)
F) None of the above

Question 8

In a linear equation relating income and consumption,you know that the intercept is $1,000 and the slope of the line is .4.If income is $20,000,then consumption is:

Accepted Answer

A)   $8,000
B)   $9,000
C)   $10,000
D)   $11,000E) A) and D)
F) None of the above

Question 9

A country can achieve some combination of goods outside its production possibilities curve by:

Accepted Answer

A)   idling some of its resources.
B)   specializing and engaging in international trade.
C)   buying the debt (bonds and stocks) of foreign nations.
D)   producing more consumption goods and fewer capital goods.E) B) and D)
F) All of the above

Question 10

The law of increasing opportunity costs is reflected in a production possibilities curve which is:

Accepted Answer

A)   an upward sloping straight line.
B)   a downward sloping straight line.
C)   concave to the origin.
D)   convex to the origin.E) A) and C)
F) B) and D)

Question 11

A typical concave production possibilities curve implies:

Accepted Answer

A)   that economic resources are scarce.
B)   that society must choose among various attainable combinations of goods.
C)   increasing opportunity costs.
D)   all of the above.E) A) and C)
F) A) and B)

Question 12

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 which can be produced assuming the full and efficient use of available resources.
D)   combinations of capital and labour necessary to produce specific levels of output.E) B) and C)
F) A) and C)

Question 13

If two variables are inversely related,then as the value of one variable:

Accepted Answer

A)   increases,the value of the other may either increase or decrease.
B)   decreases,the value of the other decreases.
C)   increases,the value of the other decreases.
D)   increases,the value of the other increases.E) B) and C)
F) A) and B)

Question 14

The individual's limited income problem:

Accepted Answer

A)   persists only because countries have failed to achieve continuous full employment.
B)   exists because material wants are limited.
C)   has been solved in all industrialized nations.
D)   has been eliminated in affluent societies such as Canada and the United States.E) B) and C)
F) B) and D)

Question 15

-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 C)
F) A) and D)

Question 16

(The following economy produces two products. ) 
Production Possibilities Table
 
-Refer to the above table.A change from possibility B to C means that:

Accepted Answer

A)   10 units of wheat are given up to get one more unit of steel.
B)   15 units of wheat are given up to get one more unit of steel.
C)   15 units of wheat are equal to one unit of steel.
D)   75 units of wheat are equal to one unit of steel.E) A) and B)
F) A) and C)

Question 17

-Refer to the above production possibilities curve.At the onset of World War II Canada had large amounts of idle human and property resources.Its economic adjustment from peacetime to wartime can best be described by the movement from point:

Accepted Answer

A)   c to point b.
B)   b to point c.
C)   a to point b.
D)   c to point d.E) A) and D)
F) B) and C)

Question 18

Assume an economy is operating at some point on its production possibilities curve which shows civilian and military goods.If the output of military goods is increased,the output of civilian goods:

Accepted Answer

A)   will remain unchanged.
B)   may be either increased or decreased.
C)   must be decreased.
D)   must also be increased.E) B) and C)
F) A) and D)

Question 19

-Refer to the above diagram.If society is currently producing 9 units of bicycles and 4 units of computers and it now decides to increase computer output to 6,the cost:

Accepted Answer

A)   will be 4 units of bicycles.
B)   will be 2 units of bicycles.
C)   will be zero because unemployed resources are available.
D)   of doing so cannot be determined from the information given.E) A) and C)
F) None of the above

Question 20

The process of developing hypotheses,testing them against facts,and using the results to construct theories is called:

Accepted Answer

A)   opportunity cost calculation.
B)   the scientific method.
C)   marginal analysis.
D)   microeconomics.E) B) and C)
F) C) and D)

Exam 1: Limits, Alternatives, and Choices

A country can achieve some combination of goods outside its production possibilities curve by:

Correct Answer
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Assume an economy is operating at some point on its production possibilities curve which shows civilian and military goods.If the output of military goods is increased,the output of civilian goods:

Correct Answer
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-Refer to the above diagram.If society is currently producing 9 units of bicycles and 4 units of computers and it now decides to increase computer output to 6,the cost:

Correct Answer
verified

-Refer to the above production possibilities curves.Curve (a) is the current curve for the economy.Other things being equal,society's current choice of point P on curve (a) will:

Correct Answer
verified

-Refer to the above production possibilities curve.At the onset of World War II Canada had large amounts of idle human and property resources.Its economic adjustment from peacetime to wartime can best be described by the movement from point:

Correct Answer
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A typical concave production possibilities curve implies:

Correct Answer
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(The following economy produces two products. ) Production Possibilities Table -Refer to the above table.A change from possibility B to C means that:

Correct Answer
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In a linear equation relating income and consumption,you know that the intercept is $1,000 and the slope of the line is .4.If income is $20,000,then consumption is:

Correct Answer
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The "economic perspective" refers to:

Correct Answer
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The society must also make choices under conditions of scarcity.This problem arises from the fact that:

Correct Answer
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The individual's limited income problem:

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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A production possibilities curve shows:

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

Correct Answer
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The law of increasing opportunity costs is reflected in a production possibilities curve which is:

Correct Answer
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-The slope of the typical production possibilities curve:

Correct Answer
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Correct Answer
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The process of developing hypotheses,testing them against facts,and using the results to construct theories is called:

Correct Answer
verified

If two variables are inversely related,then as the value of one variable:

Correct Answer
verified

If an economy is operating on its production possibilities curve for consumer goods and capital goods,this means that:

Correct Answer
verified

Exam 1: Limits, Alternatives, and Choices

A country can achieve some combination of goods outside its production possibilities curve by:

Correct AnswerverifiedShow Answer

Assume an economy is operating at some point on its production possibilities curve which shows civilian and military goods.If the output of military goods is increased,the output of civilian goods:

Correct AnswerverifiedShow Answer

-Refer to the above diagram.If society is currently producing 9 units of bicycles and 4 units of computers and it now decides to increase computer output to 6,the cost:

Correct AnswerverifiedShow Answer

-Refer to the above production possibilities curves.Curve (a) is the current curve for the economy.Other things being equal,society's current choice of point P on curve (a) will:

Correct AnswerverifiedShow Answer

-Refer to the above production possibilities curve.At the onset of World War II Canada had large amounts of idle human and property resources.Its economic adjustment from peacetime to wartime can best be described by the movement from point:

Correct AnswerverifiedShow Answer

A typical concave production possibilities curve implies:

Correct AnswerverifiedShow Answer

(The following economy produces two products. ) Production Possibilities Table -Refer to the above table.A change from possibility B to C means that:

Correct AnswerverifiedShow Answer

In a linear equation relating income and consumption,you know that the intercept is $1,000 and the slope of the line is .4.If income is $20,000,then consumption is:

Correct AnswerverifiedShow Answer

The "economic perspective" refers to:

Correct AnswerverifiedShow Answer

The society must also make choices under conditions of scarcity.This problem arises from the fact that:

Correct AnswerverifiedShow Answer

The individual's limited income problem:

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

A production possibilities curve shows:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The law of increasing opportunity costs is reflected in a production possibilities curve which is:

Correct AnswerverifiedShow Answer

-The slope of the typical production possibilities curve:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The process of developing hypotheses,testing them against facts,and using the results to construct theories is called:

Correct AnswerverifiedShow Answer

If two variables are inversely related,then as the value of one variable:

Correct AnswerverifiedShow Answer

If an economy is operating on its production possibilities curve for consumer goods and capital goods,this means that:

Correct AnswerverifiedShow Answer

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