Chapter 2 Test: Macro
increasing opportunity costs as more and more of one good is produced.
A production possibilities frontier with a bowed-outward shape indicates A. constant opportunity costs as more and more of one good is produced. B. decreasing opportunity costs as more and more of one good is produced. C. the possibility of inefficient production. D. increasing opportunity costs as more and more of one good is produced.
the process by which individuals acting in their own self−interest bring about a market outcome that benefits society as a whole.
Adam Smith's invisible hand refers to A. the government's unobtrusive role in ensuring that the economy functions efficiently. B. property ownership laws and the rule of the court system. C. the process by which individuals acting in their own self−interest bring about a market outcome that benefits society as a whole. D. the laws of nature that influence economics decisions.
economic growth.
An outward shift of a nation's production possibilities frontier represents A. a situation in which a country produces more of one good and less of another. B. rising prices of the two goods on the production possibilities frontier model. C. economic growth. D. an impossible situation.
At a lower opportunity cost than any other producer.
Comparative advantage means the ability to produce a good or service A. at a lower selling price than any other producer. B. of a higher quality than any other producer. C. at a higher profit level than any other producer. D. at a lower opportunity cost than any other producer.
Linear
If the production possibilities frontier is ________, then opportunity costs are constant as more of one good is produced. A. bowed out B. non-linear C. bowed in D. linear
Zero
If the economy is currently producing at point Y, what is the opportunity cost of moving to point W? A. 9 million tons of paper B. 2 million tons of steel C. 16 million tons of paper D. zero
It has to give up some of another good and incur some opportunity costs.
If society decides it wants more of one good and all resources are fully utilized, then A. additional resource supplies will have to be found. B. it has to give up some of another good and incur some opportunity costs. C. more unemployment will occur. D. it is unable to do this unless technology advances.
5 million tons of paper
If the economy is currently producing at point W, what is the opportunity cost of moving to point X? A. 3 million tons of steel B. 9 million tons of paper C. 5 million tons of paper D. 19 million tons of steel
75 pounds of meat
Refer to the diagram to the right which shows the production possibilities frontier for Mendonca, an agrarian nation that produces two goods, meat and vegetables. Suppose Mendonca is currently producing 60 pounds of vegetables per period. How much meat is it also producing, assuming that resources are fully utilized? A. 100 pounds of meat B. 80 pounds of meat C. 45 pounds of meat D. 75 pounds of meat
technically efficient.
Refer to the diagram to the right. Point B is A. inefficient in that not all resources are being used. B. the equilibrium output combination. C. technically efficient. D. unattainable with current resources.
unattainable with current resources.
Refer to the diagram to the right. Point C is A. unattainable with current resources. B. is the equilibrium output combination. C. inefficient in that not all resources are being used. D. technically efficient.
outside Tomaso's production possibilities frontier.
Refer to the table. Assume that Tomaso's Trattoria only produces pizzas and calzones. A combination of 36 pizzas and 30 calzones would appear A. inside Tomaso's production possibilities frontier. B. at the horizontal intercept of Tomaso's production possibilities frontier. C. outside Tomaso's production possibilities frontier. D. on Tomaso's production possibilities frontier.
Graph A
Sergio Vignetto raises cattle and llamas on his land. His land is equally suitable for raising either animal. Which of the graphs in the figure above represent his production possibilities frontier? A. Graph A B. Graph B C. Graph C D. either Graph A or Graph C
produce a combination of goods that lie outside its own production possibilities frontier.
Specializing in the production of a good or service in which one has a comparative advantage enables a country to do all of the following except A. engage in mutually beneficial trade with other nations. B. increase the variety of products that it can consume with no increase in resources. C. consume a combination of goods that lie outside its own production possibilities frontier. D. produce a combination of goods that lie outside its own production possibilities frontier.
0 pounds of meat
The figure shows the production possibilities frontier for Mendonca, an agrarian nation that produces two goods, meat and vegetables. If Mendonca chooses to produce 160 pounds of vegetables, how much meat can it produce to maximize production? A. 0 pounds of meat B. 30 pounds of meat C. 60 pounds of meat D. 120 pounds of meat
Equal to the highest value of an alternative use of the time and money spent on the class.
The opportunity cost of taking a semester-long economics class is A. zero because there is no admission charged if you are enrolled in the course. B. the cost of tuition and fees only. C. the value of the time spent in the classroom. D. equal to the highest value of an alternative use of the time and money spent on the class.
unattainable.
The points outside the production possibilities frontier are A. attainable. B. unattainable. C. inefficient. D. efficient.
patents and copyrights
The primary purpose of ________ is to encourage the expenditure of funds on research and development to create new products. A. patents and copyrights B. centrally planned economies C. government-run health care D. nationalizing oil companies
if all resources are fully and efficiently utilized, more of one good can be produced only by producing less of another good.
The production possibilities frontier model shows that A. if consumers decide to buy more of a product its price will increase. B. a market economy is more efficient in producing goods and services than is a centrally planned economy. C. if all resources are fully and efficiently utilized, more of one good can be produced only by producing less of another good. D. economic growth can only be achieved by free market economies.
maximum attainable
The production possibilities frontier shows the ________ combinations of two products that may be produced in a particular time period with available resources. A. only B. minimum attainable C. maximum attainable D. equitable
1/2 of a unicycle
The table above shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. What is Barney's opportunity cost of making a pogo stick? A. 1/2 of a unicycle B. 1/3 of a unicycle C. 1.4 pogo sticks D. 2 unicycles
2 pogo sticks
The table above shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. What is Barney's opportunity cost of making a unicycle? A. 1.75 unicycles B. 2 pogo sticks C. 1/2 of a pogo stick D. 2.8 pogo sticks
3 pogo sticks
The table above shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. What is Fred's opportunity cost of making a unicycle? A. 1/3 of a pogo stick B. 1.3 pogo sticks C. 3 pogo sticks D. 1/2 of a unicycle
Barney has a comparative advantage in making unicycles and Fred in making pogo sticks.
The table above shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. Which of the following statements is true? A. Barney has a comparative advantage in making both products. B. Barney has a comparative advantage in making pogo sticks and Fred in making unicycles. C. Barney has a comparative advantage in making unicycles and Fred in making pogo sticks. D. Fred has a comparative advantage in making both products.
1 1/3 necklaces
The table above shows the output per week of two jewelers, Serena and Haley. They can either devote their time to making bracelets or making necklaces. What is Haley's opportunity cost of making a bracelet? A. 2 necklaces B. 3 bracelets C. 1 1/3 necklaces D. 3/4 of a bracelet
2 necklaces
The table above shows the output per week of two jewelers, Serena and Haley. They can either devote their time to making bracelets or making necklaces. What is Serena's opportunity cost of making a bracelet? A. 3/4 of a bracelet B. 1/2 of a bracelet C. 1/2 of a necklace D. 2 necklaces
1/2 of a bracelet
The table above shows the output per week of two jewelers, Serena and Haley. They can either devote their time to making bracelets or making necklaces. What is Serena's opportunity cost of making a necklace? A. 3/4 of a bracelet B. 1/2 of a necklace C. 1/2 of a bracelet D. 2 necklaces
Haley has a comparative advantage in making bracelets and Serena in making necklaces.
The table above shows the output per week of two jewelers, Serena and Haley. They can either devote their time to making bracelets or making necklaces. Which of the following statements is true? A. Serena has a comparative advantage in making both products. B. Haley has a comparative advantage in making bracelets and Serena in making necklaces. C. Haley has a comparative advantage in making necklaces and Serena in making bracelets. D. Haley has a comparative advantage in making both products.
Barney has an absolute advantage in making both products.
The table to the right shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. Which of the following statements is true? A. Barney has an absolute advantage in making pogo sticks and Fred in making unicycles. B. Fred has an absolute advantage in making both products. C. Barney has an absolute advantage in making both products. D. Barney has an absolute advantage in making unicycles and Fred in making pogo sticks.
the ability to exercise control over one's own resources within the confines of the law.
The term 'property rights' refers to A. the right of a business not to have its assets confiscated by the government in the event that the business is accused of committing fraud. B. the government's right to appropriate land from wealthy land owners to redistribute to peasants. C. the ability to exercise control over one's own resources within the confines of the law. D. the physical possession of a house or any other property which the owner legally purchased.
product market
When you purchase a new pair of jeans you do so in the A. product market. B. input market. C. factor market. D. resource market.
$1,000 in cash
Which of the following is not a factor of production? A. an acre of farmland B. the manager of the local tire shop C. $1,000 in cash D. a drill press in a machine shop
through technological advancement which enables more output with the same quantity of resources
Without an increase in the supply of the factors of production, how can a nation achieve economic growth? A. by lowering the prices of factors of production B. by increasing the prices of factors of production C. by producing more high-value goods and fewer low-value goods D. through technological advancement which enables more output with the same quantity of resources
can produce more of something than others with the same resources.
You have an absolute advantage whenever you A. prefer to do one particular activity. B. are better educated than someone else. C. can produce more of something than others with the same resources. D. can produce something at a lower opportunity cost than others.
Point A
________ is (are) inefficient in that not all resources are being used. A. Point C B. Point B C. Points A and C D. Point A