Question 1

Refer to the following production possibilities curves.Curve (a) is the current curve for the economy.Given production possibilities curve (a) ,the combination of capital and consumer goods indicated by point L:

Accepted Answer

A)   would entail substantial unemployment.
B)   would entail an inefficient use of society's resources.
C)   is beyond the productive capacity of this society.
D)   suggests the productive capacity of the system is declining.E) A) and B)
F) A) and C)

Question 2

The measured slope of a line:

Accepted Answer

A)   is independent of how the two variables are denominated.
B)   will be affected by how the two variables are denominated.
C)   necessarily diminishes as one moves rightward on the line.
D)   necessarily increases as one moves rightward on the line.E) All of the above
F) C) and D)

Question 3

The production possibilities curve tells us:

Accepted Answer

A)   what specific combinations of two products is most desired by society.
B)   that costs do not change as society varies its output.
C)   costs are irrelevant in a society which has fixed resources.
D)   what combinations of two goods can be produced with society's available resources.E) A) and B)
F) B) and C)

Question 4

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) A) and C)

Question 5

-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) B) and D)
F) All of the above

Question 6

Opportunity cost is best defined as:

Accepted Answer

A)   the monetary price of any productive resource.
B)   the amount of labour which must be used to produce one unit of any product.
C)   the ratio of the prices of imported goods to the prices of exported goods.
D)   the amount of one product which must be given up to produce one more unit of another product.E) All of the above
F) None of the above

Question 7

Which of the following is real capital?

Accepted Answer

A)   a pair of stockings
B)   a dump truck
C)   a savings account
D)   a share of TD Bank stockE) None of the above
F) A) and B)

Question 8

1/4. B)  is + 1/4. C)  is .40. D)  cannot be determined from the information given." class="answers-bank-image d-inline" rel="preload" >
-Refer to the above diagram.The slope of the line:

Accepted Answer

A)   is - 1/4.
B)   is + 1/4.
C)   is .40.
D)   cannot be determined from the information given.E) None of the above
F) C) and D)

Question 9

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

Accepted Answer

A)   1 unit of steel is given up to get 75 units of wheat.
B)   2 units of steel are given up to get 75 units of wheat.
C)   1 unit of steel is given up to get 15 more units of wheat.
D)   2 units of steel are given up to get 15 more units of wheat.E) A) and D)
F) None of the above

Question 10

You should decide to go to a movie:

Accepted Answer

A)   if the marginal cost of the movie exceeds its marginal benefit.
B)   if the marginal benefit of the movie exceeds its marginal cost.
C)   if your income will allow you to buy a ticket
D)   because movies are inherently good products.E) B) and C)
F) None of the above

Question 11

Which of the following is assumed in constructing a typical production possibilities curve?

Accepted Answer

A)   the economy is using its resources inefficiently.
B)   resources are perfectly shiftable among alternative uses.
C)   production technology is fixed.
D)   the economy is engaging in international trade.E) A) and D)
F) All of the above

Question 12

How is the economic perspective reflected in lines for fast food?

Accepted Answer

A)   Customers select the shortest line because they have perfect information.
B)   Customers select the shortest line because they believe it will reduce their time cost of obtaining food.
C)   Lines will typically be of unequal length because of the inefficiencies in counter service.
D)   The set of food choices is often too complex for most customers and thus creates long lines.E) A) and B)
F) All of the above

Question 13

Which of the following is associated with macroeconomics?

Accepted Answer

A)   an examination of the incomes of the University of Toronto Business School graduates
B)   an empirical investigation of the general price level and unemployment rates in the 2000s
C)   a study of the trend of pecan prices since World War II
D)   a case study of pricing and production in the textbook industryE) C) and D)
F) A) and B)

Question 14

Refer to the diagram below.The concave shape of each production possibilities curve indicates that:

Accepted Answer

A)   resources are perfectly substitutable.
B)   wants are virtually unlimited.
C)   prices are constant.
D)   resources are not equally suited for alternative uses.E) B) and D)
F) B) and C)

Question 15

(The following economy produces two products. ) 
Production Possibilities Table
 
-The production possibilities curve represents which of the following?

Accepted Answer

A)   the amount of goods attainable with variable resources
B)   the maximum amount of goods attainable with variable resources
C)   maximum combinations of goods attainable with fixed resources
D)   the amount of goods attainable if prices declineE) None of the above
F) All of the above

Question 16

The law of increasing opportunity costs states that:

Accepted Answer

A)   if society wants to produce more of a particular good,it must sacrifice larger and larger amounts of other goods to do so.
B)   the sum of the costs of producing a particular good cannot rise above the current market price of that good.
C)   if the sum of the costs of producing a particular good rises by a specified percent,the price of that good must rise by a greater relative amount.
D)   if the prices of all the resources devoted to the production of goods increase,the cost of producing any particular good will increase at the same rate.E) None of the above
F) A) and D)

Question 17

A point inside the production possibilities curve is:

Accepted Answer

A)   attainable and the economy is efficient.
B)   attainable,but the economy is inefficient.
C)   unattainable,but the economy is inefficient.
D)   unattainable and the economy is efficient.E) A) and C)
F) A) and B)

Question 18

1/8,1/6,1/4,and 1/2 units of tractors. D)  1/2,1/4,1/6,and 1/8 units of tractors." class="answers-bank-image d-inline" rel="preload" >
-Refer to the above diagram.Starting at point E,the production of successive units of bread will cost:

Accepted Answer

A)   a constant 8 units of tractors.
B)   a constant 6 units of tractors.
C)   1/8,1/6,1/4,and 1/2 units of tractors.
D)   1/2,1/4,1/6,and 1/8 units of tractors.E) None of the above
F) A) and B)

Question 19

If the equation y = 15 - 4x was plotted,the:

Accepted Answer

A)   vertical intercept would be -4.
B)   vertical intercept would be +4.
C)   vertical intercept would be +9.
D)   slope would be -4.E) B) and C)
F) B) and D)

Question 20

Any combination of goods lying outside of the budget line:

Accepted Answer

A)   implies that the consumer is not spending all of his income.
B)   yields less utility than any point on the budget line.
C)   yields less utility than any point inside the budget line.
D)   is unattainable,given the consumer's income.E) A) and C)
F) All of the above

Exam 1: Limits, Alternatives, and Choices

A point inside the production possibilities curve is:

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Which of the following is associated with macroeconomics?

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How is the economic perspective reflected in lines for fast food?

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The production possibilities curve tells us:

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-Refer to the above diagram.The slope of the line:

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Any combination of goods lying outside of the budget line:

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Which of the following is real capital?

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-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:

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Which of the following is assumed in constructing a typical production possibilities curve?

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Refer to the following production possibilities curves.Curve (a) is the current curve for the economy.Given production possibilities curve (a) ,the combination of capital and consumer goods indicated by point L:

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You should decide to go to a movie:

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The price ratio of the two products is the:

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(The following economy produces two products. ) Production Possibilities Table -The production possibilities curve represents which of the following?

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Opportunity cost is best defined as:

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

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Refer to the diagram below.The concave shape of each production possibilities curve indicates that:

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-Refer to the above diagram.Starting at point E,the production of successive units of bread will cost:

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The measured slope of a line:

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The law of increasing opportunity costs states that:

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If the equation y = 15 - 4x was plotted,the:

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