Question 1

In economics, "capital" refers to a company's money resources.

Accepted Answer

A) True 
 B)False

Question 2

Technological improvements in the U.S. economy have:

Accepted Answer

A)   reduced the costs of production for U.S. companies.
B)   increased production levels in the United States.
C)   shifted the U.S. production possibilities frontier to the right.
D)   resulted in all of these.E) A) and B)
F) A) and C)

Question 3

In a communist state, the _____ decide(s)  what a society wants, but in a capitalist economy, the _____ decide what products they want.

Accepted Answer

A)   government; producers
B)   consumers; producers
C)   government; consumers
D)   producers; consumersE) C) and D)
F) A) and D)

Question 4

(Table: Production Possibilities Schedule)  In the table, production of a combination of 3,500 iPads and 1,500 HDTVs:   iPads  HDTVs 5,00004,5001,0003,5002,0002,0003,00004,000\begin{array} { c c } 	ext { iPads } & 	ext { HDTVs } \5,000 & 0 \4,500 & 1,000 \3,500 & 2,000 \2,000 & 3,000 \0 & 4,000\end{array} iPads 5,0004,5003,5002,0000​ HDTVs 01,0002,0003,0004,000​

Accepted Answer

A)   is unattainable.
B)   wasted resources.
C)   is accomplished at full employment.
D)   lies outside of the production possibilities frontier. E) A) and B)
F) All of the above

Question 5

(Figure: PPF of Econia (a small nation) )  Looking at the production possibilities frontier (PPF)  of Econia, assume that the country is producing at point D. All of the 300 bales of wheat are eaten but some people remain hungry. Over 100 of the 520 bales of cotton remain unused. Which statement is correct regarding efficiency in Econia?

Accepted Answer

A)   Econia is producing wheat and cotton in amounts that are as efficient as possible.
B)   Econia would have greater production efficiency if it moves from D to B.
C)   Econia is neither productively nor technically efficient.
D)   Econia would have greater allocative efficiency if it moves from D to B.E) A) and B)
F) All of the above

Question 6

(Table)  According to the data in the table, which statement explains who has a comparative advantage in the production of shirts?   Hours to Produce a  Shirt  Hours to Produce  a Cake  Tom 53 Joe 64\begin{array} { | l | l | l | } \hline & \begin{array} { l } 	ext { Hours to Produce a } \	ext { Shirt }\end{array} & \begin{array} { l } 	ext { Hours to Produce } \	ext { a Cake }\end{array} \\hline 	ext { Tom } & 5 & 3 \\hline 	ext { Joe } & 6 & 4 \\hline\end{array} Tom  Joe ​ Hours to Produce a  Shirt ​56​ Hours to Produce  a Cake ​34​​

Accepted Answer

A)   Tom, because he can produce a shirt in fewer hours than Joe can
B)   Joe, because he uses more hours than Tom to produce a shirt
C)   Tom, because he gives up production of 1.67 cakes for every shirt he produces
D)   Joe, because he gives up production of 1.5 cakes for every shirt he produces E) B) and C)
F) None of the above

Question 7

(Figure: Biscuit and Cookies PPFs)  Greg and Melissa face the production possibilities frontiers shown for biscuits and cookies. Assume that Greg and Melissa trade 60 biscuits for 60 cookies after they have completely specialized in producing the good in which they have a comparative advantage. We know that Greg and Melissa are each made better off with specialization and trade than acting alone because:

Accepted Answer

A)   they are both producing outside of their production possibilities frontier.
B)   they are both consuming outside of their production possibilities frontier.
C)   Greg is producing outside of his production possibilities frontier.
D)   Melissa is producing outside of her production possibilities frontier.E) C) and D)
F) A) and D)

Question 8

Which of these can lead to a decrease (leftward shift)  in the production possibilities frontier?

Accepted Answer

A)   banning a technology due to its adverse environmental effects
B)   a policy encouraging more immigration
C)   tax breaks on the adoption of more efficient technologies
D)   a policy that encourages entrepreneurshipE) None of the above
F) A) and B)

Question 9

Suppose the country of Alphaland can produce more cars than Omegaland can produce, given the same resources. An economist would conclude that Alphaland has a(n)  _____ in producing cars.

Accepted Answer

A)   absolute advantage
B)   comparative advantage
C)   higher opportunity cost
D)   higher resource costE) All of the above
F) C) and D)

Question 10

Which of the following is NOT an example of an improvement to human capital?

Accepted Answer

A)   students taking a course in economics
B)   increasing the number of machines available to workers
C)   an intensive internship program
D)   an employee learning to use Microsoft AccessE) A) and B)
F) A) and C)

Question 11

The concept of human capital is important to economists because:

Accepted Answer

A)   improvements to human capital lead to higher standards of living.
B)   it compares people with machinery.
C)   it helps managers plan for future growth.
D)   it shows ways for firms to reduce costs.E) All of the above
F) A) and D)

Question 12

Capital refers to the total amount of money in hedge and "venture capital" funds.

Accepted Answer

A) True 
 B)False

Question 13

(Figure: Bread and Honey)  In the graph, point b represents:

Accepted Answer

A)   a point of inefficiency.
B)   a point where all of society's resources are fully employed.
C)   a better economic situation than point a.
D)   economic growth.E) None of the above
F) A) and B)

Question 14

Every industry in all countries benefit from increased international trade.

Accepted Answer

A) True 
 B)False

Question 15

Which of these is NOT a factor of economic growth?

Accepted Answer

A)   a decrease in the savings rate
B)   an increase in the size of the labor force
C)   an investment in human capital
D)   an increase in the capital stockE) A) and B)
F) None of the above

Question 16

Paolo can walk three dogs or mow two lawns in two hours. Ashanti can walk six dogs or mow three lawns in two hours. According to trade theory, _____ should walk dogs because ____.

Accepted Answer

A)   Ashanti; she produces more than Paolo does in a two-hour period
B)   Ashanti; she enjoys a comparative advantage in dog-walking
C)   Paolo; he faces a lower opportunity cost for walking dogs
D)   Paolo; he enjoys an absolute advantage in dog-walkingE) All of the above
F) C) and D)

Question 17

If a producer has a comparative advantage, then she has selected the activity that:

Accepted Answer

A)   has the lowest resource cost.
B)   is outside of the production possibilities frontier.
C)   has the lowest opportunity cost.
D)   does not require specialization.E) C) and D)
F) A) and C)

Question 18

Only capitalist economies must answer the three basic economic questions.

Accepted Answer

A) True 
 B)False

Question 19

Which of these does NOT impose a limit on the amount of international trade?

Accepted Answer

A)   transportation costs
B)   some industries losing their domestic markets
C)   the danger of overreliance on a small number of products for exports
D)   high level of comparative advantageE) A) and D)
F) None of the above

Question 20

The _____ shows the combination of two goods that are possible for a society to produce at full employment.

Accepted Answer

A)   full employment line
B)   production possibilities frontier
C)   goods and services frontier
D)   maximal productivity curveE) A) and C)
F) All of the above

Exam 2: Production, Economic Growth, and Trade

Technological improvements in the U.S. economy have:

Correct Answer
verified

Capital refers to the total amount of money in hedge and "venture capital" funds.

Correct Answer
verified

Paolo can walk three dogs or mow two lawns in two hours. Ashanti can walk six dogs or mow three lawns in two hours. According to trade theory, _ should walk dogs because .

Correct Answer
verified

Which of these is NOT a factor of economic growth?

Correct Answer
verified

Correct Answer
verified

(Table: Production Possibilities Schedule) In the table, production of a combination of 3,500 iPads and 1,500 HDTVs: $\begin{array} { c c } \text { iPads } & \text { HDTVs } \\5,000 & 0 \\4,500 & 1,000 \\3,500 & 2,000 \\2,000 & 3,000 \\0 & 4,000\end{array}$

Correct Answer
verified

Which of these does NOT impose a limit on the amount of international trade?

Correct Answer
verified

Correct Answer
verified

(Figure: Bread and Honey) In the graph, point b represents:

Correct Answer
verified

Which of the following is NOT an example of an improvement to human capital?

Correct Answer
verified

Only capitalist economies must answer the three basic economic questions.

Correct Answer
verified

If a producer has a comparative advantage, then she has selected the activity that:

Correct Answer
verified

Correct Answer
verified

The concept of human capital is important to economists because:

Correct Answer
verified

Suppose the country of Alphaland can produce more cars than Omegaland can produce, given the same resources. An economist would conclude that Alphaland has a(n) _____ in producing cars.

Correct Answer
verified

Every industry in all countries benefit from increased international trade.

Correct Answer
verified

In economics, "capital" refers to a company's money resources.

Correct Answer
verified

The _____ shows the combination of two goods that are possible for a society to produce at full employment.

Correct Answer
verified

Which of these can lead to a decrease (leftward shift) in the production possibilities frontier?

Correct Answer
verified

In a communist state, the _ decide(s) what a society wants, but in a capitalist economy, the _ decide what products they want.

Correct Answer
verified

Exam 2: Production, Economic Growth, and Trade

Technological improvements in the U.S. economy have:

Correct AnswerverifiedShow Answer

Capital refers to the total amount of money in hedge and "venture capital" funds.

Correct AnswerverifiedShow Answer

Paolo can walk three dogs or mow two lawns in two hours. Ashanti can walk six dogs or mow three lawns in two hours. According to trade theory, _____ should walk dogs because ____.

Correct AnswerverifiedShow Answer

Which of these is NOT a factor of economic growth?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of these does NOT impose a limit on the amount of international trade?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

(Figure: Bread and Honey) In the graph, point b represents:

Correct AnswerverifiedShow Answer

Which of the following is NOT an example of an improvement to human capital?

Correct AnswerverifiedShow Answer

Only capitalist economies must answer the three basic economic questions.

Correct AnswerverifiedShow Answer

If a producer has a comparative advantage, then she has selected the activity that:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The concept of human capital is important to economists because:

Correct AnswerverifiedShow Answer

Suppose the country of Alphaland can produce more cars than Omegaland can produce, given the same resources. An economist would conclude that Alphaland has a(n) _____ in producing cars.

Correct AnswerverifiedShow Answer

Every industry in all countries benefit from increased international trade.

Correct AnswerverifiedShow Answer

In economics, "capital" refers to a company's money resources.

Correct AnswerverifiedShow Answer

The _____ shows the combination of two goods that are possible for a society to produce at full employment.

Correct AnswerverifiedShow Answer

Which of these can lead to a decrease (leftward shift) in the production possibilities frontier?

Correct AnswerverifiedShow Answer

In a communist state, the _____ decide(s) what a society wants, but in a capitalist economy, the _____ decide what products they want.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Paolo can walk three dogs or mow two lawns in two hours. Ashanti can walk six dogs or mow three lawns in two hours. According to trade theory, _ should walk dogs because .

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

In a communist state, the _ decide(s) what a society wants, but in a capitalist economy, the _ decide what products they want.

Correct Answer
verified