Quiz 1 Unit 1

Which of the following would most likely cause the production possibilities curve for DVDs and food to shift outward?

An increase in the quantity of natural resources.

Which of the following statements is true?

An opportunity cost is what must be given up in order to get something else.

Which of the following statements is false?

Economic growth is illustrated as an inward shift of the production possibilities curve.

Which of the following is a macroeconomics topic?

The economy's annual growth rate.

A nation's current location on its production possibilities curve can determine the future location of that nation's production possibilities curve.

True

All points on the production possibilities curve represent efficient levels of production.

True

Economics is the study of decisions made necessary by the problem of unlimited wants and limited means to satisfy them.

True

Macroeconomics is the branch of economics that studies economic aggregates for the economy as a whole.

True

The statement "It is better to suffer a little more unemployment than a little lower prices" is an example of normative economic analysis.

True

Ceteris paribus means:

all other things remain constant.

A point outside a production possibilities curve reflects:

an impossible choice

Human wants:

can never be fully satisfied.

Labor resources:

include both physical and mental activities.

Natural resources are:

included in the category of resources called land.

Positive economics:

is the scientific study of "what is" among economic relationships.

A point inside a production possibilities curve reflects:

less than full use of resources and technology.

A good or service that is forgone by choosing one alternative over another is called a(n):

opportunity cost.

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.

When an economy's resources are not fully employed, then it must be true that the:

production point is located inside and to the left of the production possibilities curve.

The most fundamental concepts underlying the discipline of economics are:

scarcity and choice.

Which of the following is true about the production possibilities curve when a technological progress occurs? The curve:

shifts outward to the right

An entrepreneur is:

the person who conceives and starts a business.

Adding more resources causes:

the production possibilities curve to shift out.

A production possibilities curve shows the:

various combinations of goods that can be produced.