Econ- Chapter 2

Joe is spending $500 to take an economics class. If he wasn't in class, he could be earning $900 at a part-time job. Joe's food and rent expenses are $1000. What is the opportunity cost of Joe being in class? $200 $900 $1400 $2200

$1400

Joe is spending $500 to take an economics class. If he wasn't in class, he could be earning $900 at a part-time job. What is the opportunity cost of Joe to be in class? $300 $600 $900 $1400

$1400

Joe could be at three different jobs that pay $15, $10, and $8 respectively. If he is not working, the opportunity cost is... $15. $10. $8. $33.

$15

Jeff can read 7 pages in an hour or walk 3 miles in an hour. He works a 5-hour day, spending 4 hours reading and 2 hour walking. Jeff's opportunity cost of reading 1 page is... 3 miles. 4 hours a day. 7 pages. 0.43 mile. 2.33 miles.

0.43 mile

Jeff can read 7 pages in an hour or walk 3 miles in an hour. He works a 5-hour day, spending 4 hours reading and 2 hour walking. Jeff's opportunity cost of walking 1 mile is... 3 miles. 4 hours a day. 7 pages. 0.43 page. 2.33 pages.

2.33 pages

If the growth rate is 3% per year, the economy will double every... 24 years. 34 years. 3 years. It cannot be determined from the information given.

24 years

If the GDP of a country doubles in 12 years, then the economy must have grown by... 2 % per year. 24% per year. 6% per year. 12 years. It cannot be determined from the information given.

6% per year

If the GDP of a country doubles in 9 years, then the economy must have grown by... 8% per year. 9% per year. 6% per year. 12 years. It cannot be determined from the information given.

8% per year

The U.S. falls under which type of economy? Free market system. Centrally planned. Mixed. None of the above.

Mixed

Which of the following is correct? The word "laissez-faire" is a French phrase meaning "let it be." The phrase "laissez-nous faire" was first used in France in the nineteenth century. The book "The Wealth of Nations" was written by John Malthus. The phrase "the invisible hand" was first mentioned by Adam Smith in reference to command economies.

The word laissez faire is a french phrase meaning let it be

From an economist's point of view which of the following is correct? A Wal-Mart store is a market because it sells merchandise. A market is any place where one can buy or sell a product or service and negotiate a price. A market is any place where one can buy or sell a product or service without negotiating a price. A Wal-Mart store is not a market because it a firm.

a market is any place where one can buy or sell a product or service and negotiate a price

For countries such as Canada, Sweden, and Norway, which of the following would shift the PPC curve to the right? earthquakes and fire a population increase running out of resources none of the above

a population increase

Which of the following is NOT true? Vilfredo Pareto was an Italian economist. A use of resources is efficient only when the gains exceed the losses. A use of resources is efficient only when the losses exceed the gains. efficiency means that there is no waste of resources.

a use of resources is efficient only when the losses exceed the gains

Which of the following statements regarding the production possibilities curve is true? Points inside the curve are attainable. Points outside the curve are unattainable. Points on the curve are more efficient than points inside the PP curve. Points on the curve are where resources are most efficiently used. All of the above

all of the above

Which of the following would shift the PPC curve to the left? a depletion of resources earthquakes and fire war all of the above.

all of the above

Which of the following would shift the PPC curve to the right? technology an increase in resources a population (for countries such as Canada) all of the above.

all of the above

Of the following, which is NOT true? Technical efficiency means using the least resources possible to produce a given level of output. An economist will never consider technical efficiency as an inefficient use of resources. An economist might consider technically efficient use of resources as inefficient if the resulting product does not benefit society. Economic efficiency means applying resources to producing goods that society's members value most highly.

an economist will never consider technical efficiency as an inefficient use of resources

Which of the following is NOT correct? Because of scarce resources... an economy can produce all the goods and services desired by its citizens. if more resources are used for defense, there are fewer resources available for consumer goods. if a nation trains more doctors, there are fewer teachers or engineers. If a nation decide to produce more wheat, then there will be less corn produced.

an economy can produce all the goods and services desired by its citizens

Which of the following statements is true? In the barter system, you 'trade one good for another'. In the barter system, you 'produce what you're best at, sell it, and buy what you need'. In the market system, you 'produce what you're best at, sell it, and buy what you need'. both a and c.

both a and c

Which of the following will shift the PPC to the right? a better educated labor force more money more natural resources all of the above both a and c

both a and c

Which of the following will shift the PPC to the left? a reduced labor force more factors of production both a and e more capital natural disasters

both a and e

Capital formation means that a society is using more of its resources to produce... capital goods rather than consumer goods. consumer goods rather than capital goods. furniture rather than tractors. homes rather than factories

capital goods rather than consumer goods

Of the following, which is NOT true according to "Pareto Efficiency"? The gains should exceed the losses. Everyone should be better off as a result of changing the way resources are used. A use of resources is efficient only when we can make those involved in one activity better off without making those involved in another activity worse off. None of the above

everyone should be better off as a result of changing the way resources are used

Which of the following would not shift the PPC curve to the right? flood or fire improvements in irrigation genetic engineering all of the above

flood or fire

Of the following, which condition is NOT required for the invisible hand to work? clearly defined property rights. economic freedom for people to produce what they wish. economic freedom for people to consume what they wish. greater government planning.

greater government planning

Of the following, which factor would lead to slower economic growth? A country that... uses more of its resources to produce capital goods than it does to produce consumer goods. has governments and laws are subject to frequent change. encourages individuals into investing in capital formation. has consistent economic policies.

has government and laws are subject to frequent change

If a nation decides to use more manual labor and fewer large expensive tractors to build a road, what kind of economic decision is it making? what to produce how to produce it for whom to produce all of the above

how to produce it

Which of the following statements is false? In the barter system, you 'trade one product for another'. In the barter system, you 'produce what you're best at, sell it, and buy what you need'. In the market system, you 'produce what you're best at, sell it, and buy what you need'. both a and c.

in the barter system you produce what you're best at, sell it, and buy what you need

The shape of the PPC curve that 'bulges out' is a result of... decreasing opportunity cost. increasing opportunity cost. constant opportunity cost. none of the above.

increasing opportunity cost

The shape of the PPC curve... is bow shaped. is convex. bulges in. all of the above

is bow shaped

Which of the following is a correct pair of a resources and opportunity costs? land and interest capital and rent labor and wages services and rent

labor and wages

Which of the following would shift the PPC curve to the left? more efficient irrigation systems an increase in population (for countries such as Canada, and Norway). genetic engineering none of the above

none of the above

Apples, oranges, and peaches are the same price. In descending order, Joe's favorite fruits are apples, oranges, and peaches. If Joe buys an apple, the opportunity cost for him is a(n)... apple. orange. peach. oranges and peaches.

orange

If a company X hires away 9 workers from company Y and as a consequence profits of company X increase by 20 percent but that of company Y stay the same, then this would be an example of: movement along the PPC. movement beyond the PPC. shift of the PPC to the right. Pareto Efficiency

pareto efficiency

Which of the following statements regarding the production possibilities curve is not true? Points inside the curve are attainable. Points outside the curve are unattainable. Points on the curve are more efficient than points inside the PP curve. Points on the curve are not where resources are not most efficiently used. All of the above.

points on the curve are not where resources are not most efficiently used

For countries such as China or India, which of the following would not shift the PPC curve to the right? technological advancement population increase increase in resources none of the above

population increase

Information in buying and selling comes in the form of... prices. losses. over production of products. under production of goods.

prices

Which Of the following correctly categorizes the four economic systems? the traditional economy, the barter system, the capitalist system, and the socialist system the traditional economy, the capitalist system, the socialist system, and the mixed economic system the traditional economy, the capitalist system, the market economy, and the mixed economic system the traditional economy, the capitalist system, the market economy, and socialist system

the traditional economy, the capitalist system, the socialist system, and the mixed economic system

Of the following, which is NOT an advantage of the capitalist system? Prices and wages are determined by supply and demand. Decisions are made by individuals and firms. The consumer is sovereign. There can be inflation.

there can be inflation

Of the following, which is NOT an advantage of the socialist system? Jobs are guaranteed by the government. There is no inflation. There is little incentive for personal gain or promotion. Income is more evenly distributed.

there is little incentive for personal gain or promotion

One way to determine the relative economic freedom of a country is to determine the... total government outlays as a percent of the gross domestic product. gross domestic product of the nation. total government outlays of the nation. the gross domestic product as a percent of total government outlays.

total government outlays as a percent of the gross domestic product

Of the following, which country would NOT have higher economic growth? A country that... uses more of its resources to produce capital goods than it does to produce consumer goods. uses more of its resources to produce consumer goods than it does to produce capital goods. has clearly defined property rights. has consistent economic policies.

use more of its resources to produce capital goods than it does to produce consumer goods

Technical efficiency means... using the least resources possible to produce a given level of output. producing a given level of output by using the cheapest resources. applying resources to produce goods that society's members value most highly. using the least resources possible to buy a given level of output.

using the least resources possible to produce a given level of output

The three fundamental economic decisions that every economic system must make are... What, when and for whom. What, why and for whom. What, how and for whom. When, why and how much. What, why and when.

what, how, and for whom