Some Questions

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Some Questions
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1

• Economics is a social science concerned
  with A. Increasing the level of productive
  resources so there is maximum output in
  societyB. Increasing the level of productive
  resources so there is a minimum level of
  incomeC. The best use of scarce resources to
  achieve the maximum satisfaction of economic
  wantsD. The best use of scarce resources paid
  for at the minimum level of cost to consumers
  and businesses

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2

• 2. The study of economics is primarily concerned
  with A. Expanding the production of goods and
  servicesB. Making the best use of scarce
  productive resourcesC. Equalizing the
  distribution of consumer income and
  wealthD. Reallocating resources from consumption
  to production in the economy

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3

• 3. The key economic concept that serves as the
  basis for the study of economics
  is A. InflationB. UnemploymentC. MoneyD. Scar
  city

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4

• 4. A recurring theme in economics
  is A. Unlimited resources and unlimited
  economic wantsB. People can increase resources
  by limiting their economic wantsC. People have
  limited economic wants and limited
  resourcesD. People have unlimited economic
  wants, but limited resources
•  

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5

• 5. As a consequence of the condition of
  scarcity A. There is never enough of
  anythingB. Production has to be planned by
  governmentC. Things which are plentiful have
  relatively high pricesD. Individuals have to
  make choices from among alternatives

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9

• 9. What is the economic meaning of the expression
  that "there is no such thing as a free
  lunch"? A. It refers to "free-riders," who do
  not pay for the cost of a product, but who
  receive the benefit from itB. It means that
  economic freedom is limited by the amount of
  income available to the consumerC. It means that
  there is an opportunity cost when resources are
  used to provide "free" productsD. It indicates
  that products only have value because people are
  willing to pay for them
•  

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12

• 12. Opportunity cost is best defined
  as A. Marginal cost minus marginal
  benefitB. The time spent on an economic
  activityC. The value of the best foregone
  alternativeD. The money cost of an economic
  decision

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15

• 15. The value of the best alternative to any
  action you undertake is referred to as
  its A. Production costB. Opportunity
  costC. Resource costD. Increasing cost

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18

• 18. After graduating from high school, Ron Willis
  plans to go to college. The college tuition is
  15,000 a year. But, instead of going to college,
  Ron could take a full-time job paying 20,000. If
  Ron decides to go to college, what is his
  opportunity cost for attending for one
  year? A. 5,000B. 15,000C. 20,000D. 35,000

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23

• 23. Which expression is another way of saying
  "marginal cost"? A. Total costB. Additional
  costC. Rational behaviorD. Scarcity

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25

• 25. Henry wants to buy a book. The economic
  perspective suggests that Henry will buy the book
  if A. Positive economics is more important than
  normative economics in the decision
  makingB. Normative economics is more important
  than positive economics in the decision
  makingC. The marginal cost of the book is
  greater than its marginal benefitD. The marginal
  benefit of the book is greater than its marginal
  cost
•  

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29

• 29. When an economist says that there is "too
  much of a good thing," the economist is
  suggesting that A. Economic goals are
  conflictingB. Economic goals are
  complementaryC. The marginal cost of the thing
  is less than the marginal benefitD. The marginal
  benefit of the thing is less than the marginal
  cost

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33

• 33. The process of developing hypotheses, testing
  them against facts, and using the results to
  construct theories is called A. Opportunity
  cost calculationB. The scientific
  methodC. Marginal analysisD. Microeconomics

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39

• 39. The role of an assumption in an economic
  theory is to A. Add realismB. Prove the
  theoryC. Cover special casesD. Simplify the
  theory

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40

• 40. The ceteris paribus assumption is employed in
  economic analysis to A. State economic
  goalsB. Simplify the complex worldC. Evaluate
  an economic systemD. Approximate real-world
  conditions

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110

• 110. The production possibilities curve
  represents which of the following? A. The amount
  of goods attainable with variable
  resourcesB. The maximum amount of goods
  attainable with variable resourcesC. Maximum
  combinations of goods attainable with fixed
  resourcesD. The amount of goods attainable if
  prices decline

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111

• 111. The production possibilities curve
  represents A. The maximum amount of labor and
  capital available for productionB. Combinations
  of goods and services among which consumers are
  indifferentC. Maximum combinations of products
  available with fixed resources and
  technologyD. The maximum rate of growth of
  capital and labor in an economy

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112

• 112. On a production possibilities curve, the
  single optimal or best combination of output for
  any society A. Is at a point near the top of
  the curveB. Is at the precise midpoint of the
  curveC. Is at a point near the bottom of the
  curveD. Depends upon the preferences of society

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114

• 114. Refer to the above table. The total
  opportunity cost of the three units of steel
  is A. 15 units of wheatB. 20 units of
  wheatC. 45 units of wheatD. 55 units of wheat

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115

• 115. Refer to the above table. The marginal
  opportunity cost of the third unit of steel
  is A. 10 units of wheatB. 15 units of
  wheatC. 20 units of wheatD. 30 units of wheat

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116

• 116. Refer to the above table. A change from
  possibility C to B means that A. 1 unit of
  steel is given up to get 75 units of wheatB. 2
  units of steel are given up to get 75 units of
  wheatC. 1 unit of steel is given up to get 15
  more units of wheatD. 2 units of steel are given
  up to get 15 more units of wheat

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117

• 117. Refer to the above table. In moving from
  possibility C to D, the cost of a unit of steel
  in terms of a unit of wheat is A. 10B. 20C. 25
  D. 30

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118

• 118. Refer to the above table. A change from
  possibility B to C means that A. 10 units of
  wheat are given up to get one more unit of
  steelB. 15 units of wheat are given up to get
  one more unit of steelC. 15 units of wheat are
  equal to one unit of steelD. 75 units of wheat
  are equal to one unit of steel

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119

• 119. Refer to the above table. In moving from
  possibility A to F, the cost of a unit of steel
  in terms of a unit of wheat A. IncreasesB. Decr
  easesC. Remains constantD. Increases from A to
  B, and decreases from B to F
•  

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126

• 126. Refer to the graph. The total opportunity
  cost of nine drill presses is A. 1 unit of
  breadB. 2 units of breadC. 3 units of
  breadD. 4 units of bread

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127

• 127. Refer to the graph. The marginal opportunity
  cost of the fourth unit of bread is A. 1 unit
  of drill pressesB. 2 units of drill pressesC. 3
  units of drill pressesD. 4 units of drill presses

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128

• 128. A point inside the production possibilities
  curve is A. Attainable and the economy is
  efficientB. Attainable, but the economy is
  inefficientC. Unattainable, but the economy is
  inefficientD. Unattainable and the economy is
  efficient

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129

• 129. A point on the frontier of the production
  possibilities curve is A. Attainable and
  resources are fully employedB. Attainable, but
  resources are unemployedC. Unattainable, but
  resources are unemployedD. Unattainable and
  resources are fully employed

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130

• 130. A point outside the production possibilities
  curve is A. Attainable, but there is not full
  employmentB. Attainable, but there is not
  optimal allocationC. Unattainable because the
  economy is inefficientD. Unattainable because of
  limited resources

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132

• 132. In a production possibilities graph with
  just two products in an economy, the graph shows
  the quantity of A. Both products on the
  horizontal axisB. One product on the horizontal
  axis and the price of the other product on the
  vertical axisC. One product on the vertical axis
  and the price of the other product on the
  horizontal axisD. One product on the vertical
  axis and the quantity of the another product on
  the horizontal axis

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• 133. A movement along the production
  possibilities curve would imply that A. The
  labor force has grownB. Productivity has
  increasedC. Productivity has declinedD. Society
  has chosen a different set of outputs
•  

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134

• 134. A point outside (to the right of) the
  production possibilities curve of a
  nation A. Is not attainable for this
  nationB. Will shift the production possibilities
  boundary outwardC. Implies that there are
  unemployed resources in this nationD. Implies
  that this nation is using its resources
  efficiently

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139

• 139. Points C, D, E, and H on the above graph
  show A. An inefficient allocation of society's
  scarce resourcesB. A constant tradeoff between
  food and clothingC. Possible combinations of
  food and clothingD. Unattainable combinations of
  food and clothing

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140

• 140. The combination of food and clothing shown
  by point G on the above graph A. Is not
  attainable, given society's available resources
  and technologyB. Can be attained only if some of
  society's resources are unemployedC. Suggests
  that the law of increasing relative costs is not
  relevant in this caseD. Results only because
  society allocates its resources inefficiently

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Answers

• 1 c, 2 b,3d,4d, 5d, 9c, 12c, 15b, 18d, 23b, 25d,
  29d, 33b, 39d, 40b, 110c, 111c, 112d, 114c, 115c,
  116c, 117b, 118b, 119a, 126c, 127d, 128b, 129a,
  130d, 132d, 133d, 134a, 139c, 140a