C719 - Module 2 - Organization of Economic Activity Quick Quiz

B

A traditional economy answers the basic questions by A. a central decision-making process. B. determining how the questions have been answered in the past. C. relying on incentives and self-interest of individuals. D. a voting system

A

Huey and Steve can grow potatoes or tomatoes. The table below shows the pounds of potatoes (P) and tomatoes (T) Huey and Steve can grow in a week. Huey: P 12 or T 8 Steve: P 6 or T 2 Based on the table, Huey's opportunity cost of producing one pound of tomatoes is A. 1.5 pounds of potatoes. B. 0.66 pound of potatoes. C. 0, because he has an absolute advantage in it. D. 0, because he has a comparative advantage in it.

C

John can make pizza at a lower opportunity cost than Allen, but Allen can make more pizzas per day than John. Therefore, A. John cannot benefit from trade with Allen. B. Allen cannot benefit from trade with John. C. John has a comparative advantage in pizza. D. John has an absolute advantage in pizza.

A

On a typical acre of land, Iowa can produce either 300 pounds of beef or 100 pounds of soybeans in a year. On a typical acre of land, Nebraska can produce 150 pounds of beef or 200 pounds of soybeans. Which of the following is correct? A)Nebraska should produce soybeans because its opportunity cost of soybeans is lower. B) Nebraska should produce soybeans because its opportunity cost of soybeans is higher. C) Iowa should produce soybeans because its opportunity cost of soybeans is lower. D) Iowa should produce soybeans because its opportunity cost of soybeans is higher.

B

The question of "How are goods and services produced?" most closely addresses which of the following issues? A. Should Ford build SUVs or luxury cars? B. Should Ford use expensive industrial robots or inexpensive Mexican autoworkers to produce SUVs? C. Should contractors build residential housing or shopping malls? D. Is income distributed fairly in the United States?

C

What two groups of decision makers are represented in the basic circular flow model? A. governments and financial institutions B. lenders and borrowers C. households and firms D. wholesalers and retailers

A

Which of the following are factors of production? A. Labor, Capital B. Loans, Credit Cards C. Taxes, Transfers D. Goods, Services

D

Which of the following best describes comparative advantage? A. being able to produce more output than any other country B. using the fewest number of resources to produce a given amount of output C. having the largest number of resources compared to other countries D. forgoing the fewest units of one product to produce a unit of another product

D

Which of the following is NOT considered one of the factors of production? A. Land B. Labor C. Capital D. Technology

C

Which of the following items is not a factor of production? A. An oil rig in the Gulf of Mexico B. A ski jump in Utah C. A bank loan to a farmer D. An orange grove in Florida

D

Which of the following statements is correct? A. Labor earns wages and entrepreneurship earns bonuses B. Land earns interest and capital earns rent C. Entrepreneurship earns interest and capital earns profit D. Capital earns interest and labor earns wages