microeco p3

The United States produced approximately ________ worth of goods and services in 2011. A) $15 trillion B) $15 billion C) $150 trillion D) $150 billion E) $1,500 trillion

A) $15 trillion

In the United States, the poorest 20 percent of households receive about ________ percent of total income. A) 3 B) 15 C) 23 D) 49 E) 20

A) 3

________ earned the highest amount of income among the factors of production in the United States. A) Labor B) Capital C) Land D) Entrepreneurship E) Investment

A) Labor

Production efficiency is represented by ________ a production possibilities frontier. A) all points on B) all points inside C) all points outside D) a movement along E) only one point on

A) all points on

Dividing the nation's income among the factors of production, the largest percentage is paid to A) labor. B) land. C) capital. D) entrepreneurship. E) labor and capital, with each receiving about 41 percent of the total income.

A) labor.

The production possibilities frontier illustrates the A) maximum combinations of goods and services that can be produced. B) resources the economy possess, but not its level of technology. C) goods and services that people want. D) limits to people's wants. E) amount of each good that people want to buy.

A) maximum combinations of goods and services that can be produced.

A production possibilities frontier shows A) the various combinations of output a nation can produce a certain time, given its available resources and technology. B) the limits to future growth of a nation. C) how money can be allocated among two kinds of goods. D) that if price of one good decreases, the price of the other has to increase. E) that it is impossible to produce inefficiently.

A) the various combinations of output a nation can produce a certain time, given its available resources and technology

In a production possibilities frontier graph, the cost of producing more units of a good is measured by the A) dollar value of the resources used to produce the good. B) amount of the other good or service that must be forgone. C) dollar value of the additional output. D) area in the arc between the PPF and a straight line drawn between the starting point and the ending point.

B) amount of the other good or service that must be forgone.

The production possibilities frontier is the boundary between the A) goods and services that the economy can produce. B) attainable and unattainable combinations of goods and services. C) wanted and unwanted combinations of goods and services. D) rational and irrational choices facing a society. E) affordable and unaffordable combinations of production.

B) attainable and unattainable combinations of goods and services.

Wages are paid to ________ and interest is paid to ________. A) entrepreneurs; capital B) labor; capital C) labor; land D) entrepreneurs; land E) labor; entrepreneurs

B) labor; capital

When a nation is producing on its production possibilities frontier, if more resources are used to produce one good, then the production of other goods A) must increase. B) must decrease. C) must remain the same. D) must change but they might increase or decrease. E) might increase if the nation can produce more efficiently.

B) must decrease.

If the production possibilities frontier between two goods is a straight line, then the A) opportunity cost is not a ratio. B) resources are equally productive in both goods. C) line does not qualify as a production possibilities frontier because the unattainable production points are too close to the inefficient production points. D) Both answers A and C are correct. E) Both answers A and B are correct.

B) resources are equally productive in both goods.

A reason the production possibilities frontier exists is A) unlimited resources and technology. B) scarcity of resources. C) scarcity of resources and unlimited technology. D) unemployment. E) that people's wants are unlimited.

B) scarcity of resources.

When drawing a production possibilities frontier, which of the following is held constant? A) the amount of money in the economy B) the available factors of production and the state of technology C) the prices of goods and services D) the quantity of the goods and services that are produced E) None of the above because nothing is held constant when drawing the production possibilities frontier.

B) the available factors of production and the state of technology

The production possibilities frontier is the A) maximum output that can be produced at an opportunity cost of zero. B) minimum output that can be produced when resources are used inefficiently. C) boundary between the combinations of goods and services that can be produced and the combinations that cannot be produced, given the available factors of production and the state of technology. D) boundary between the combinations of goods and services that can be produced and the combinations that cannot be produced when technology is changing. E) maximum opportunity cost combinations of goods and services.

C) boundary between the combinations of goods and services that can be produced and the combinations that cannot be produced, given the available factors of production and the state of technology.

The income earned by entrepreneurs is A) interest. B) wages. C) profit or loss. D) rent, wages, and interest. E) a mixture of rent, wages, interest, and profit.

C) profit or loss

In the United States, the richest 20 percent of households receive about ________ percent of total income. A) 4 B) 15 C) 23 D) 50 E) 33

D) 50

A bowed out production possibilities frontier shows A) that resources are equally productive in all uses. B) increasing opportunity cost. C) that resources are not equally productive in all uses. D) Both answers B and C are correct. E) Both answers A and B are correct.

D) Both answers B and C are correct.

If there is unemployment in an economy, then the A) production possibilities frontier will shift inwards. B) economy is operating at an unattainable point. C) production possibilities frontier will shift outwards. D) economy is producing at a point inside the production possibilities frontier. E) production possibilities frontier must be bowed inward.

D) economy is producing at a point inside the production possibilities frontier.

If a society moves from a period of time with significant unemployment to a time with full employment, its production possibilities frontier will A) shift leftward. B) shift rightward. C) not shift because the society moves from one point on the frontier to a point inside the frontier. D) not shift because the society moves from a point inside the frontier to a point on the frontier. E) not shift because the society moves from one point on the frontier to a point outside the frontier.

D) not shift because the society moves from a point inside the frontier to a point on the frontier.

If an economy cannot produce more of one good without producing less of another good, this implies that which of the following has been achieved? A) allocative efficiency B) minimum marginal cost C) PPF efficiency D) production efficiency E) maximum marginal benefit

D) production efficiency

) In a production possibilities frontier diagram, the attainable production points are shown as A) only the points on the production possibilities frontier. B) only the points beyond the production possibilities frontier. C) only the points inside the production possibilities frontier. D) the points inside and the points on the production possibilities frontier. E) any of the production points.

D) the points inside and the points on the production possibilities frontier.