Modules 1-3 RC

Which of the following is not an example of resource scarcity? a. There is a finite amount of petroleum in the world. b. Farming communities are experiencing droughts. c. There are not enough physicians to satisfy all desires for health care in the United States. d. Cassette tapes are no longer being produced. e. Teachers would like to have more instructional tech- nology in their classrooms.

Cassette tapes are no longer being produced.

Suppose that you prefer reading a book you already own to watching TV and that you prefer watching TV to listening to music. If these are your only three choices, what is the opportunity cost of reading? a. watching TV and listening to music b. watching TV c. listening to music d. sleeping e. the price of the book

b. watching TV

Which point(s) on the graph represent productive efficiency? a. B and C b. A and D c. A, B, C, and D d. A, B, C, D, and E e. A, B, C, D, E, and F

c. A, B, C, and D

Which of the following is an example of a resource? I. petroleum II. a factory III. a cheeseburger DINNER

petroleum and a factory

Which of the following statements is/are normative? I. The price of gasoline is rising. II. The price of gasoline is too high. III. Gas prices are expected to fall in the near future

II. The price of gasoline is too high.

Which of the following questions is studied in microeconomics? a. Should I go to college or get a job after I graduate? b. What government policies should be adopted to promote employment in the economy? c. How many people are employed in the economy this year? d. Has the overall level of prices in the economy increased or decreased this year? e. What determines the overall salary levels paid to workers in a given year?

a. Should I go to college or get a job after I graduate?

During the recession phase of a business cycle, which of the following is likely to increase? a. the unemployment rate b. the price level c. economic growth rates d. the labor force e. wages

a. the unemployment rate

This production possibilities curve shows the trade- off between consumer goods and capital goods. Since capital goods are a resource, an increase in the produc- tion of capital goods today will increase the economy's production possibilities in the future. Therefore, all other things equal (ceteris paribus), producing at which point today will result in the largest outward shift of the PPC in the future? a.A b.B c.C d.D e.E

a.A

The other things equal assumption allows economists to a. avoid making assumptions about reality. b. focus on the effects of only one change at a time. c. oversimplify. d. allow nothing to change in their model. e. reflect all aspects of the real world in their model.

b. focus on the effects of only one change at a time.

Which of the following is the most likely result of inflation? a. falling employment b. a dollar will buy more than it did before c. people are discouraged from holding cash d. price stability e. low aggregate output per capita

c. people are discouraged from holding cash

An increase in unemployment could be represented by a movement from point a. D to point C. b. B to point A. c. C to point F. d. B to point E. e. E to point B.

d. B to point E.

The labor force is made up of everyone who is a. employed. b. old enough to work. c. actively seeking work. d. employed or unemployed. e. employed or capable of working.

d. employed or unemployed.

For this economy, an increase in the quantity of capital goods produced without a corresponding decrease in the quantity of consumer goods produced a. cannot happen because there is always an opportunity cost. b. is represented by a movement from point E to point A. c. is represented by a movement from point C to point B. d. is represented by a movement from point E to point B. e. is only possible with an increase in resources or technology.

d. is represented by a movement from point E to point B.

Which of the following might allow this economy to move from point B to point F? a. more workers b. discovery of new resources c. building new factories d. technological advances e. all of the above

e. all of the above

Which of the following provides a long-term increase in the productive capacity of an economy? a. an expansion b. a recovery c. a recession d. a depression e. economic growth

e. economic growth