ECON: Ch. 1 & 2 Practice Quizzes

A change from possibility C to B means that:

1 unit of steel is given up to get 15 more units of wheat.

Which point on the production possibilities curve would indicate that there is unemployment in this economy?

D

The graph above shows the production possibilities curve for an economy producing two goods, X and Y. Which of the points on the graph indicate unemployed resources?

E and A only

Which is characteristic of the market system?

free enterprise and choice

The statement that "the unemployment rate will increase as the economy moves into a recession" is an example of:

generalization

Which would not be characteristic of a capitalist economy?

government ownership of the factors of production

The money income of households consists of the sum of:

wages plus rents plus interest plus profits.

According to the Gates, Winfrey, and Rodriguez illustration:

Opportunity costs vary greatly between individuals and matter in decision-making.

Which is an illustration of a microeconomic question?

Will a new type of television set increase the number of buyers?

The economy of North Korea would best be classified as:

a command system

Which is an example of barter?

a person trades a desk for a box of tools

Which expression is another way of saying "marginal cost"?

additional cost

In 1999, McDonald's introduced the "Big Xtra" and it turned out to be successful product. In the marketplace for fast-food products, this success would be an example of:

consumer sovereignty

By consumer sovereignty we mean that:

consumers determine what goods and services are produced.

In moving from possibility A to F, the cost of a unit of steel in terms of a unit of wheat:

increases

Which is considered to be an economic resource by economists?

labor

Economic models do not reflect the full complexity of reality and instead are based on:

purposeful simplifications

In the circular economic flow diagram, households:

receive revenue and supply resources.

Increases in resources or improvements in technology will tend to cause a society's production possibilities curve to:

shift outward or to the right.

A movement along the production possibilities curve would imply that:

society has chosen a different set of outputs.