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