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Thinking Like An Economist: Test A

This document contains multiple choice questions about economic concepts such as the production possibilities frontier, opportunity cost, and microeconomics. The production possibilities frontier shows the various combinations of outputs an economy can produce given available resources and technology. The opportunity cost of producing more of one good is the amount of the other good that must be given up. Microeconomics studies specific markets and industries rather than the whole economy.

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223 views

Thinking Like An Economist: Test A

This document contains multiple choice questions about economic concepts such as the production possibilities frontier, opportunity cost, and microeconomics. The production possibilities frontier shows the various combinations of outputs an economy can produce given available resources and technology. The opportunity cost of producing more of one good is the amount of the other good that must be given up. Microeconomics studies specific markets and industries rather than the whole economy.

Uploaded by

mas_999
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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Chapter 2 Thinking Like an Economist

Test A
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The production possibilities frontier is a a. map which shows the frontier beyond which agriculture is unprofitable. b. map which shows areas of the world in which capitalist production is now possible. c. graph that shows the various combinations of output that the economy can possibly produce given the available resources and technology. d. graph which shows the various combinations of resources that can be used to produce a given level of output. ANSWER c. graph that shows the various combinations of output that the economy can possibly produce given the available resources and technology. T!"E # $E!1 % SE&T'(N 1 ()*E&T'+E , RAN%(# !
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Which of the following concepts is N(T illustrated by the production possibilities frontier. a. efficiency b. opportunity cost c. e/uity d. tradeoffs ANSWER c. e/uity T!"E # $E!1 % SE&T'(N 1 ()*E&T'+E , RAN%(# !

(n the production possibilities frontier shown0 which point or points are possible for this economy to produce. a. A0 )0 &0 % b. A0 )0 &0 1 c. A0 )0 &0 %0 E0 1 d. % ANSWER a. A0 )0 &0 % T!"E # $E!1 2 SE&T'(N 1 ()*E&T'+E , 2RA"3 1(R#AT # 45EST'(N 'NSTR5&T'(N RAN%(# !

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(n the production possibilities frontier shown0 which point or points are inefficient. a. A0 )0 & b. E0 1 c. ) d. % ANSWER d. % T!"E # $E!1 2 SE&T'(N 1 ()*E&T'+E , 2RA"3 1(R#AT # 45EST'(N 'NSTR5&T'(N RAN%(# !
=

The opportunity cost of obtaining more of one good is shown on the production possibilities frontier as the a. amount of the other good which must be given up. b. mar:et price of the additional amount produced. c. amount of resources which must be devoted to its production. d. number of dollars which must be spent to produce it. ANSWER a. amount of the other good which must be given up. T!"E # $E!1 & SE&T'(N 1 ()*E&T'+E , RAN%(# !
>

A production possibilities frontier will be linear and not bowed out if a. no tradeoffs e?ist. b. the tradeoff between the two goods is always at a constant rate. c. the unemployment rate is @ero. d. resources are allocated efficiently. ANSWER b. the tradeoff between the two goods is always at a constant rate. T!"E # $E!1 & SE&T'(N 1 ()*E&T'+E 1 RAN%(# !

'n the production possibilities frontier shown0 the shift of the frontier from A to ) was most li:ely caused by which of the following. a. more capital available in the economy b. more labor available in the economy c. a general technological brea:through d. technological improvement in the production of clothing ANSWER d. technological improvement in the production of clothing T!"E # $E!1 2 SE&T'(N 1 ()*E&T'+E , 2RA"3 1(R#AT # 45EST'(N 'NSTR5&T'(N < RAN%(# N

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'n the production possibilities frontier shown0 what is the opportunity cost to society of the movement from point % to point ). a. >88 pret@els b. B88 pret@els c. -=8 pret@els d. 188 pret@els ANSWER c. -=8 pret@els T!"E # $E!1 2 SE&T'(N 1 ()*E&T'+E , 2RA"3 1(R#AT # 45EST'(N 'NSTR5&T'(N > RAN%(# N
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'n the production possibilities frontier shown0 the movement from point & to point E was most li:ely caused by a. an increase in societyCs preference for pret@els. b. a decrease in societyCs preference for potato chips. c. unemployment. d. a and b ANSWER c. unemployment. T!"E # $E!1 2 SE&T'(N 1 ()*E&T'+E , 2RA"3 1(R#AT # 45EST'(N 'NSTR5&T'(N > RAN%(# N
18

Which of the following would be considered a topic of study in microeconomics. a. the effect of changes in saving rates on 2%" b. the impact of minimumDwage laws on employment in the fastDfood industry c. the impact of monetary policy on the rate of inflation d. the effect of ta? policy on the rate of economic growth ANSWER b. the impact of minimumDwage laws on employment in the fastDfood industry T!"E # $E!1 % SE&T'(N 1 ()*E&T'+E < RAN%(# !

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'n the graph shown0 the slope of the curve between points A and ) is a. Eb. E19c. 19d. ANSWER b. E19T!"E # $E!1 2 2RA"3 1(R#AT # 45EST'(N 'NSTR5&T'(N , RAN%(# N

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ANSWER c. graph that shows the various combinations of output that the economy can possibly produce given the available resources and technology. T!"E # $E!1 % SE&T'(N 1 ()*E&T'+E , RAN%(# !
-

ANSWER c. e/uity T!"E # $E!1 % SE&T'(N 1 ()*E&T'+E , RAN%(# !


,

ANSWER a. A0 )0 &0 % T!"E # $E!1 2 SE&T'(N 1 ()*E&T'+E , 2RA"3 1(R#AT # 45EST'(N 'NSTR5&T'(N - RAN%(# !
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ANSWER d. % T!"E # $E!1 2 SE&T'(N 1 ()*E&T'+E , 2RA"3 1(R#AT # 45EST'(N 'NSTR5&T'(N - RAN%(# !
=

ANSWER a. amount of the other good which must be given up. T!"E # $E!1 & SE&T'(N 1 ()*E&T'+E , RAN%(# !
>

ANSWER b. the tradeoff between the two goods is always at a constant rate. T!"E # $E!1 & SE&T'(N 1 ()*E&T'+E 1 RAN%(# !
A

ANSWER d. technological improvement in the production of clothing T!"E # $E!1 2 SE&T'(N 1 ()*E&T'+E , 2RA"3 1(R#AT # 45EST'(N 'NSTR5&T'(N < RAN%(# N
B

ANSWER c. -=8 pret@els T!"E # $E!1 2 SE&T'(N 1 ()*E&T'+E , 2RA"3 1(R#AT # 45EST'(N 'NSTR5&T'(N > RAN%(# N
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ANSWER c. unemployment. T!"E # $E!1 2 SE&T'(N 1 ()*E&T'+E , 2RA"3 1(R#AT # 45EST'(N 'NSTR5&T'(N > RAN%(# N
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ANSWER b. the impact of minimumDwage laws on employment in the fastDfood industry T!"E # $E!1 % SE&T'(N 1 ()*E&T'+E < RAN%(# !
11

T!"E # $E!1 2

ANSWER b. E192RA"3 1(R#AT # 45EST'(N 'NSTR5&T'(N , RAN%(# N

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