Economics Ch2 quiz

Which of the following sayings best reflects the concept of opportunity cost?

"There is no such thing as a free lunch."

In Exhibit 2-15, if the economy moves from point L to point M, the opportunity cost of producing 10 more capital goods is:

15 less consumer goods.

While waiting in line to buy two tacos at 80 cents each and a medium drink for 90 cents, Jordan notices that the restaurant has a value meal containing three tacos and a medium drink all for $3. For Jordan, the marginal cost of the third taco would be:

50 cents.

In Exhibit 2-16, which of the following points on the production possibilities curve are efficient production points?

A, B, C, D

In Exhibit 2-11, which of the following could have caused the production possibilities curve of an economy to shift from the one labeled A to the one labeled B?

An advance in technology

Which of the following would be most likely to cause the production possibilities curve for computers and education to shift outward?

An increase in the quantity of resources.

In Exhibit 2-19, the production possibilities curves for a country are shown for the years Year X and Year Y. Which of the following could have caused a shift for Year X to Year Y in production possibilities curves?

An increase in the stock of capital goods.

What shape is the production possibilities curve usually expected to exhibit?

Bowed out.

A nation can accelerate economic growth by increasing its production of consumer goods.

False

The basic approach in marginal analysis is to compare a policy's total benefits with its total costs.

False

The most efficient point on the production possibilities curve is the midpoint on the curve.

False

The opportunity cost of attending a movie is the purchase price of a ticket.

False

Because of the problem of scarcity, each economic system must make which of the following choices?

How to produce? What to produce? For whom to produce?

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.

What to produce, how to produce, and for who to produce are the three fundamental economic questions.

True

A nation can accelerate its economic growth by:

adding to its stock of capital.

The opportunity cost of an activity means the:

amount of other things that must be sacrificed in order to engage in the activity.

A point outside a production possibilities curve reflects:

an impossible choice.

A rightward (an outward) shift of a nation's production possibilities curve could be caused by:

an increase in resources.

In Exhibit 2-13, which of the following is not true regarding point H? Point H:

could be achieved today if the economy only achieved full employment.

In Exhibit 2-13, point D:

could result from some degree of unemployment of inefficiency.

One source of economic growth is:

increasing capital.

Any point inside the production possibility curve is:

inefficient.

If an economy is operating at a point inside the production possibilities curve,

its resources are not being used efficiently.

The principle that the opportunity cost increases as the production of one output expands along the production possibilities curve is the:

law of increasing opportunity costs.

As shown in Exhibit 2-8, a total output of 14 units of consumer goods and 1 unit of capital goods is:

less than the maximum rate of output for this economy.

The amount of a good that must be given up to produce another good is the concept of:

opportunity cost.

The highest valued alternative that must be given up in order to choose an option is called the:

opportunity cost.

Production possibilities curve analysis includes the idea of:

opportunity cost. scarcity. maximum production choices.

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

outward shift of the entire curve.

According to marginal analysis, you should spend more time studying economics if the extra benefit from an additional hour of study:

outweighs the extra cost.

Opportunity cost:

represents the best alternative sacrificed for a chosen alternative.

Of factors which affect any economy's production potential, the best two listed below are:

resources and technology.

According to the data in Exhibit 2-4, a total output of 140 units of consumer goods and 10 units of capital goods would:

result in a less than maximum rate of growth for this economy.

Movement along this production possibilities curve shown in Exhibit 2-9 indicates:

that labor is not equally productive or homogeneous (nonhomogeneous).

Adding more resources causes:

the production possibilities curve to shift out.

As shown in Exhibit 2-8, a total output of 0 units of capital goods and 10 units of consumer goods is:

the result of maximum use of the economy's labor force.

In Exhibit 2-16, to move from U to B, the opportunity cost:

would be zero.