Chapter 2 quiz

Mikki decides to work five hours the night before her economics exam. She earns an extra $75, but her exam score is 10 points lower than it would have been had she stayed home and studied. Her opportunity cost is the:

10 points she lost on her exam.

If more of one good can be produced without producing less of another output, the economy must have been operating efficiently. True or False

False

Investment is an economic term for the act of increasing the stock of money available for business loans. True or False?

False

A local restaurant offers an "all you can eat" Sunday brunch for $12. Susan eats four servings, but leaves half of a fifth helping uneaten. Why?

Her marginal value of food has fallen to zero.

Bill has $10 to spend on a Superman, Batman, or an X-Men T-shirt. Bill buys the Superman T-shirt and the Batman shirt was a close second choice. What is the opportunity cost?

The Batman T-shirt.

In Europe during the 14th century, the Black Plague killed 24 million people or close to 37 percent of the population. How would this affect the production possibilities curves for the countries of Europe at that time?

The production possibilities curves for these countries would have shifted inward.

Production possibilities curve analysis includes the idea of:

all of these. -opportunity cost. -scarcity. -maximum production choices.

A production possibilities curve shows the various:

combinations of goods the economy has the capacity to produce.

NEED TO LOOK AT GRAPH QUESTIONS..chapter 2 quiz

fin.

Any point on the production possibilities curve illustrates:

maximum production combinations.

A good or service that is forgone by choosing one alternative over another is called a(n):

opportunity cost.

A major technological advance would be represented on a production possibilities curve by a(n):

outward shift of the entire curve.

If an economy is producing at full employment, it means that:

the economy is producing along its production possibilities curve.

After the terrorist attacks on September 11, 2001, the United States began devoting substantial resources toward the War on Terrorism, homeland security, and relief efforts. As long as our resources were being used efficiently, the production possibilities curve would suggest that:

we will have to give up the production of other goods that could have been produced with these resources.

While waiting in line to buy a cheeseburger for $2 and a drink for 75 cents, Aaron notices that the restaurant has a value meal containing a cheeseburger, drink, and French fries for $3. For Aaron, the marginal cost of purchasing the French fries:

would be 25 cents.