Question 1

If we say that two variables are inversely related, this means that:

Accepted Answer

A)  the two graph as an upsloping line.
B)  an increase in one variable is associated with a decrease in the other.
C)  an increase in one variable is associated with an increase in the other.
D)  the resulting relationship can be portrayed by a straight line parallel to the horizontal axis.E) A) and B)
F) A) and C)

Question 2

Which one of the following statements is correct?

Accepted Answer

A)  Relative scarcity is no longer a central notion in economics because we are in an age of abundance.
B)  Most production possibilities curves are convex as viewed from the origin.
C)  The production possibilities curve shows society's preferences for consumer goods relative to capital goods.
D)  The central concept underlying the production possibilities curve is that of limited resources.E) A) and B)
F) A) and C)

Question 3

If two variables are inversely related, then as the value of one variable:

Accepted Answer

A)  increases, the value of the other may either increase or decrease.
B)  decreases, the value of the other decreases.
C)  increases, the value of the other decreases.
D)  increases, the value of the other increases.E) A) and C)
F) A) and B)

Question 4

Assume an economy is incurring unemployment and failing to realize least-cost production.The immediate effect of resolving these problems will be to:

Accepted Answer

A)  move the level of actual output closer to the economy's production possibilities curve.
B)  create a less equal distribution of income.
C)  shift its production possibilities curve to the left.
D)  shift its production possibilities curve to the right.E) A) and B)
F) All of the above

Question 5

Assume an economy is operating at some point on its production possibilities curve which shows civilian and military goods.If the output of military goods is increased, the output of civilian goods:

Accepted Answer

A)  will remain unchanged.
B)  may be either increased or decreased.
C)  must be decreased.
D)  must also be increased.E) All of the above
F) None of the above

Question 6

The assertion that "There is no free lunch" means:

Accepted Answer

A)  there are always tradeoffs between economic goals.
B)  all production involves the use of scarce resources and thus the sacrifice of alternative goods.
C)  marginal analysis is not used in economic reasoning.
D)  choices do not need be made if behaviour is rational.E) None of the above
F) All of the above

Question 7

d for quantity demanded and P for price, which of the following equations correctly states the demand for this product? A) P = Qd/10. B) P = 50 - P/2. C) P = 10 - .2Qd. D) P = 10 - 2Qd." class="answers-bank-image d-inline" rel="preload" > Refer to the above graph.Using Qd for quantity demanded and P for price, which of the following equations correctly states the demand for this product?

Accepted Answer

A)  P = Qd/10.
B)  P = 50 - P/2.
C)  P = 10 - .2Qd.
D)  P = 10 - 2Qd.E) A) and C)
F) A) and B)

Question 8

Production possibilities tables for two countries, North Cantina and South Cantina: North Cantina
Production possibilities (alternatives) 
 South Cantina
Production possibilities (alternatives) 
 Refer to the above tables.If South Cantina is producing at production alternative D, the opportunity cost of the third unit of capital goods is:

Accepted Answer

A)  3 units of consumer goods.
B)  4 units of consumer goods.
C)  5 units of consumer goods.
D)  6 units of consumer goods.E) A) and D)
F) A) and C)

Question 9

Microeconomics:

Accepted Answer

A)  is concerned with the aggregate or total levels of income, employment, and output.
B)  is not concerned with details, but only with the overall "big picture" of the economy.
C)  is concerned with individual economic units and specific markets.
D)  describes the aggregate flows of output and income.E) A) and B)
F) A) and C)

Question 10

Macroeconomics can best be described as the:

Accepted Answer

A)  analysis of how a consumer tries to spend income.
B)  study of the large aggregates of the economy or the economy as a whole.
C)  analysis of how firms attempt to maximize their profits.
D)  study of how supply and demand determine prices in individual markets.E) A) and D)
F) A) and B)

Question 11

Which of the following will not require an outward shift of the production possibilities curve?

Accepted Answer

A)  an upgrading of the quality of a nation's human resources
B)  the reduction of unemployment
C)  an increase in the quantity of a society's labour force
D)  the improvement of a society's technological knowledgeE) A) and D)
F) B) and D)

Question 12

Which of the following is not an illustration of the idea of opportunity cost?

Accepted Answer

A)  A growing economy can produce more consumer goods and more capital goods at the same time.
B)  If I buy a pizza, I will not be able to afford a movie.
C)  Resources devoted to consumer goods production are not available for capital goods production.
D)  The land a Manitoba farmer plants in wheat is not available for corn production.E) A) and C)
F) B) and D)

Question 13

The production possibilities curve below shows the hypothetical relationship between the production of capital goods and consumer goods in an economy.  Refer to the above table.What is the opportunity cost of producing the fourth unit of capital goods?

Accepted Answer

A)  6 units of consumer goods
B)  7 units of consumer goods
C)  15 units of consumer goods
D)  22 units of consumer goodsE) None of the above
F) B) and C)

Question 14

1 to PP2 A) immigration of skilled workers into the economy B) worsening of the AIDS epidemic C) an increase in consumer prices D) a reduction in the age of retirement." class="answers-bank-image d-inline" rel="preload" > Refer to the above diagram.Which one of the following would shift the production possibilities curve from PP1 to PP2

Accepted Answer

A)  immigration of skilled workers into the economy
B)  worsening of the AIDS epidemic
C)  an increase in consumer prices
D)  a reduction in the age of retirement.E) A) and D)
F) None of the above

Question 15

Refer to the diagram below, suppose you have a money income of $10 all of which you spend on Coke and boxes of popcorn.The prices of Coke and popcorn respectively are:

Accepted Answer

A)  $.50 and $1.00.
B)  $1.00 and $.50.
C)  $1.00 and $2.00.
D)  $.40 and $.50.E) B) and C)
F) A) and B)

Question 16

The society must also make choices under conditions of scarcity.This problem arises from the fact that:

Accepted Answer

A)  society's wants are limited but the resources are not.
B)  resources are scarce relative to society's wants.
C)  societies behave only in their self-interest.
D)  society's wants and resources are both unlimited.E) A) and B)
F) A) and C)

Question 17

In drawing the production possibilities curve we assume that:

Accepted Answer

A)  technology is fixed.
B)  unemployment exists.
C)  economic resources are unlimited.
D)  wants are limited.E) B) and C)
F) A) and C)

Question 18

The price ratio of the two products is the:

Accepted Answer

A)  marginal rate of substitution.
B)  slope of the budget line.
C)  point of tangency for equilibrium.
D)  elasticity of demand for the two products.E) A) and B)
F) B) and D)

Question 19

1, then: A) society would consider additional units of shoes to be more valuable than alternative products. B) society would consider additional units of shoes to be less valuable than alternative products. C) society would experience a net loss by producing more shoes. D) resources are being allocated efficiently to the production of shoes." class="answers-bank-image d-inline" rel="preload" > Refer to the above diagram for athletic shoes.If the current output of shoes is Q1, then:

Accepted Answer

A)  society would consider additional units of shoes to be more valuable than alternative products.
B)  society would consider additional units of shoes to be less valuable than alternative products.
C)  society would experience a net loss by producing more shoes.
D)  resources are being allocated efficiently to the production of shoes.E) A) and D)
F) B) and C)

Question 20

Refer to the diagram below.The concept of opportunity cost is best represented by the: 1 to PP2. B) move from B on PP1 to E on PP2. C) move from B on PP1 to C on PP1. D) move from D inside PP1 to B on PP1." class="answers-bank-image d-inline" rel="preload" >

Accepted Answer

A)  shift of the production possibilities curve from PP1 to PP2.
B)  move from B on PP1 to E on PP2.
C)  move from B on PP1 to C on PP1.
D)  move from D inside PP1 to B on PP1.E) A) and D)
F) A) and C)

Exam 1: B: Limits, Alternatives, and Choices

The price ratio of the two products is the:

Correct Answer
verified

Refer to the above diagram.Which one of the following would shift the production possibilities curve from PP₁ to PP₂

Correct Answer
verified

Refer to the diagram below.The concept of opportunity cost is best represented by the:

Correct Answer
verified

Which one of the following statements is correct?

Correct Answer
verified

If we say that two variables are inversely related, this means that:

Correct Answer
verified

Refer to the above graph.Using Q_d for quantity demanded and P for price, which of the following equations correctly states the demand for this product?

Correct Answer
verified

Correct Answer
verified

Which of the following is not an illustration of the idea of opportunity cost?

Correct Answer
verified

The society must also make choices under conditions of scarcity.This problem arises from the fact that:

Correct Answer
verified

Which of the following will not require an outward shift of the production possibilities curve?

Correct Answer
verified

Assume an economy is incurring unemployment and failing to realize least-cost production.The immediate effect of resolving these problems will be to:

Correct Answer
verified

The production possibilities curve below shows the hypothetical relationship between the production of capital goods and consumer goods in an economy. Refer to the above table.What is the opportunity cost of producing the fourth unit of capital goods?

Correct Answer
verified

Microeconomics:

Correct Answer
verified

If two variables are inversely related, then as the value of one variable:

Correct Answer
verified

Refer to the diagram below, suppose you have a money income of $10 all of which you spend on Coke and boxes of popcorn.The prices of Coke and popcorn respectively are:

Correct Answer
verified

In drawing the production possibilities curve we assume that:

Correct Answer
verified

Assume an economy is operating at some point on its production possibilities curve which shows civilian and military goods.If the output of military goods is increased, the output of civilian goods:

Correct Answer
verified

Refer to the above diagram for athletic shoes.If the current output of shoes is Q₁, then:

Correct Answer
verified

Macroeconomics can best be described as the:

Correct Answer
verified

The assertion that "There is no free lunch" means:

Correct Answer
verified

Exam 1: B: Limits, Alternatives, and Choices

The price ratio of the two products is the:

Correct AnswerverifiedShow Answer

Refer to the above diagram.Which one of the following would shift the production possibilities curve from PP1 to PP2

Correct AnswerverifiedShow Answer

Refer to the diagram below.The concept of opportunity cost is best represented by the:

Correct AnswerverifiedShow Answer

Which one of the following statements is correct?

Correct AnswerverifiedShow Answer

If we say that two variables are inversely related, this means that:

Correct AnswerverifiedShow Answer

Refer to the above graph.Using Qd for quantity demanded and P for price, which of the following equations correctly states the demand for this product?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is not an illustration of the idea of opportunity cost?

Correct AnswerverifiedShow Answer

The society must also make choices under conditions of scarcity.This problem arises from the fact that:

Correct AnswerverifiedShow Answer

Which of the following will not require an outward shift of the production possibilities curve?

Correct AnswerverifiedShow Answer

Assume an economy is incurring unemployment and failing to realize least-cost production.The immediate effect of resolving these problems will be to:

Correct AnswerverifiedShow Answer

The production possibilities curve below shows the hypothetical relationship between the production of capital goods and consumer goods in an economy. Refer to the above table.What is the opportunity cost of producing the fourth unit of capital goods?

Correct AnswerverifiedShow Answer

Microeconomics:

Correct AnswerverifiedShow Answer

If two variables are inversely related, then as the value of one variable:

Correct AnswerverifiedShow Answer

Refer to the diagram below, suppose you have a money income of $10 all of which you spend on Coke and boxes of popcorn.The prices of Coke and popcorn respectively are:

Correct AnswerverifiedShow Answer

In drawing the production possibilities curve we assume that:

Correct AnswerverifiedShow Answer

Assume an economy is operating at some point on its production possibilities curve which shows civilian and military goods.If the output of military goods is increased, the output of civilian goods:

Correct AnswerverifiedShow Answer

Refer to the above diagram for athletic shoes.If the current output of shoes is Q1, then:

Correct AnswerverifiedShow Answer

Macroeconomics can best be described as the:

Correct AnswerverifiedShow Answer

The assertion that "There is no free lunch" means:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Refer to the above diagram.Which one of the following would shift the production possibilities curve from PP₁ to PP₂

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Refer to the above graph.Using Q_d for quantity demanded and P for price, which of the following equations correctly states the demand for this product?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Refer to the above diagram for athletic shoes.If the current output of shoes is Q₁, then:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified