Question 1

1. B)  is Q2. C)  is Q3. D)  is greater than Q3." class="answers-bank-image d-inline" rel="preload" >
-Refer to the above diagram for athletic shoes. The optimal output of shoes:

Accepted Answer

A)   is Q1.
B)   is Q2.
C)   is Q3.
D)   is greater than Q3.E) C) and D)
F) B) and C)

Question 2

Normative statements are concerned with:

Accepted Answer

A)   facts and theories.
B)   what ought to be.
C)   what is.
D)   rational choice involving costs and benefits.E) A) and B)
F) A) and C)

Question 3

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) All of the above

Question 4

-An economy cannot produce at a point outside of its production possibilities curve because human material wants are insatiable.

Accepted Answer

A) True 
 B)False

Question 5

Any point inside the production possibilities curve indicates:

Accepted Answer

A)   the realization of allocative efficiency.
B)   that resources are imperfectly shiftable among alternative uses.
C)   the presence of inflationary pressures.
D)   that more output could be produced with available resources.E) A) and B)
F) None of the above

Question 6

If country A has been investing a larger proportion of its domestic output than Canada has, then, we would expect:

Accepted Answer

A)   a higher rate of growth of domestic output in country A than in Canada.
B)   greater rightward shifts in country A's production possibilities curve as compared to Canada.
C)   that in the long run living standards would rise more rapidly in country A than in Canada.
D)   all of the above to happen.E) B) and C)
F) All of the above

Question 7

Economics involves "marginal analysis" because:

Accepted Answer

A)   most decisions involve changes in the status quo.
B)   marginal benefits always exceed marginal costs.
C)   marginal costs always exceed marginal benefits.
D)   much economic behaviour is irrational.E) All of the above
F) A) and D)

Question 8

-Answer on the basis of the relationships shown in the above four figures. The amount of Y is directly related to the amount of X in:

Accepted Answer

A)   both 1 and 3.
B)   both 1 and 2.
C)   2 only.
D)   l only.E) All of the above
F) B) and D)

Question 9

-Refer to the above diagram. The movement down the production possibilities curve from point A to point E suggests that the production of:

Accepted Answer

A)   computers, but not bicycles, is subject to increasing opportunity costs.
B)   bicycles, but not computers, is subject to increasing opportunity costs.
C)   both bicycles and computers is subject to constant opportunity costs.
D)   both bicycles and computers is subject to increasing opportunity costs.E) B) and C)
F) A) and B)

Question 10

-The law of increasing opportunity costs is reflected in a production possibilities curve which is:

Accepted Answer

A)   an upward sloping straight line.
B)   a downward sloping straight line.
C)   concave to the origin.
D)   convex to the origin.E) None of the above
F) C) and D)

Question 11

If an economy is operating on its production possibilities curve for consumer goods and capital goods, this means that:

Accepted Answer

A)   it is impossible to produce more consumer goods.
B)   resources cannot be reallocated between the two goods.
C)   it is impossible to produce more capital goods.
D)   more consumer goods can only be produced at the cost of fewer capital goods.E) None of the above
F) B) and C)

Question 12

The term "other things equal" means that:

Accepted Answer

A)   the associated statement is normative.
B)   many variables affect the variable under consideration.
C)   the assumption that factors other than those being considered do not change.
D)   when variable X increases so does related variable Y.E) A) and B)
F) B) and D)

Question 13

The economic concept that serves as the basis for the study of economics is:

Accepted Answer

A)   inflation.
B)   unemployment.
C)   money.
D)   scarcity.E) B) and D)
F) A) and B)

Question 14

Most of the disagreement among economists involves:

Accepted Answer

A)   facts.
B)   theories.
C)   positive statements.
D)   normative statements.E) B) and C)
F) All of the above

Question 15

Some agricultural sub-Saharan nations of Africa have over-farmed and overgrazed their land to the extent that significant portions of it have turned into desert. This suggests that:

Accepted Answer

A)   the concavity of the production possibilities curves of such nations has increased.
B)   the production possibilities curves of such nations have shifted inward.
C)   the production possibilities curves of such nations have shifted outward.
D)   these nations are operating at some point outside of their production possibilities curves.E) C) and D)
F) A) and D)

Question 16

Other things equal, which of the following would shift an economy's production possibilities curve to the left?

Accepted Answer

A)   the discovery of a low-cost means of generating and storing solar energy
B)   the entrance of more women into the labour force
C)   a law requiring mandatory retirement from the labour force at age 55
D)   an increase in the proportion of total output which consists of capital or investment goodsE) B) and D)
F) A) and C)

Question 17

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 C)

Question 18

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. Suppose that North Cantina is producing 2 units of capital goods and 17 units of consumer goods while South Cantina is producing 2 units of capital goods and 21 units of consumer goods. We can conclude that:

Accepted Answer

A)   North Cantina is fully and efficiently using its resources, but South Cantina is not.
B)   South Cantina is fully and efficiently using its resources, but North Cantina is not.
C)   neither South Cantina nor North Cantina are fully and efficiently using their resources.
D)   both South Cantina and North Cantina are fully and efficiently using their resources.E) A) and C)
F) B) and C)

Question 19

If the production possibilities curve is a straight line:

Accepted Answer

A)   the two products will sell at the same market prices.
B)   economic resources are perfectly shiftable between the production of the two products.
C)   the two products are equally important to consumers.
D)   equal quantities of the two products will be produced at each possible point on the curve.E) None of the above
F) A) and D)

Question 20

(The following economy produces two products.) 
Production Possibilities Table
 
-Refer to the above table. A change from possibility B to C means that:

Accepted Answer

A)   10 units of wheat are given up to get one more unit of steel.
B)   15 units of wheat are given up to get one more unit of steel.
C)   15 units of wheat are equal to one unit of steel.
D)   75 units of wheat are equal to one unit of steel.E) A) and B)
F) A) and C)

Exam 1: Limits, Alternatives, and Choices

If country A has been investing a larger proportion of its domestic output than Canada has, then, we would expect:

Correct Answer
verified

If an economy is operating on its production possibilities curve for consumer goods and capital goods, this means that:

Correct Answer
verified

If the production possibilities curve is a straight line:

Correct Answer
verified

Macroeconomics can best be described as the:

Correct Answer
verified

Other things equal, which of the following would shift an economy's production possibilities curve to the left?

Correct Answer
verified

Correct Answer
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Normative statements are concerned with:

Correct Answer
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(The following economy produces two products.) Production Possibilities Table -Refer to the above table. A change from possibility B to C means that:

Correct Answer
verified

-Refer to the above diagram. The movement down the production possibilities curve from point A to point E suggests that the production of:

Correct Answer
verified

-Answer on the basis of the relationships shown in the above four figures. The amount of Y is directly related to the amount of X in:

Correct Answer
verified

The economic concept that serves as the basis for the study of economics is:

Correct Answer
verified

-The law of increasing opportunity costs is reflected in a production possibilities curve which is:

Correct Answer
verified

-An economy cannot produce at a point outside of its production possibilities curve because human material wants are insatiable.

Correct Answer
verified

Economics involves "marginal analysis" because:

Correct Answer
verified

-Refer to the above diagram for athletic shoes. The optimal output of shoes:

Correct Answer
verified

The term "other things equal" means that:

Correct Answer
verified

Any point inside the production possibilities curve indicates:

Correct Answer
verified

Most of the disagreement among economists involves:

Correct Answer
verified

Correct Answer
verified

Some agricultural sub-Saharan nations of Africa have over-farmed and overgrazed their land to the extent that significant portions of it have turned into desert. This suggests that:

Correct Answer
verified

Exam 1: Limits, Alternatives, and Choices

If country A has been investing a larger proportion of its domestic output than Canada has, then, we would expect:

Correct AnswerverifiedShow Answer

If an economy is operating on its production possibilities curve for consumer goods and capital goods, this means that:

Correct AnswerverifiedShow Answer

If the production possibilities curve is a straight line:

Correct AnswerverifiedShow Answer

Macroeconomics can best be described as the:

Correct AnswerverifiedShow Answer

Other things equal, which of the following would shift an economy's production possibilities curve to the left?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Normative statements are concerned with:

Correct AnswerverifiedShow Answer

(The following economy produces two products.) Production Possibilities Table -Refer to the above table. A change from possibility B to C means that:

Correct AnswerverifiedShow Answer

-Refer to the above diagram. The movement down the production possibilities curve from point A to point E suggests that the production of:

Correct AnswerverifiedShow Answer

-Answer on the basis of the relationships shown in the above four figures. The amount of Y is directly related to the amount of X in:

Correct AnswerverifiedShow Answer

The economic concept that serves as the basis for the study of economics is:

Correct AnswerverifiedShow Answer

-The law of increasing opportunity costs is reflected in a production possibilities curve which is:

Correct AnswerverifiedShow Answer

-An economy cannot produce at a point outside of its production possibilities curve because human material wants are insatiable.

Correct AnswerverifiedShow Answer

Economics involves "marginal analysis" because:

Correct AnswerverifiedShow Answer

-Refer to the above diagram for athletic shoes. The optimal output of shoes:

Correct AnswerverifiedShow Answer

The term "other things equal" means that:

Correct AnswerverifiedShow Answer

Any point inside the production possibilities curve indicates:

Correct AnswerverifiedShow Answer

Most of the disagreement among economists involves:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Some agricultural sub-Saharan nations of Africa have over-farmed and overgrazed their land to the extent that significant portions of it have turned into desert. This suggests that:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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