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Multiple Choice Quiz
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1

Refer to the following diagram:

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Curve C:
A)reflects increasing opportunity costs
B)indicates that resources are perfectly shiftable between the two industries
C)is a less desirable production possibilities curve for an economy than curve A
D)indicates that society prefers consumer goods over capital goods
2

In terms of the circular flow diagram, firms receive revenue in the _____ market and incur costs in the _____ market.
A)product; financial
B)resource; product
C)product; resource
D)capital; resource
3

More output could be produced with available resources if:
A)resources are allocated efficiently
B)resources are imperfectly shiftable among alternative uses
C)prices are reduced
D)the economy is operating at a point inside the production possibilities curve
4

Which of the following would lead to an inward shift of a nation's production possibilities curve?
A)Immigration of skilled workers into the nation
B)An increase in the average skill level of the population
C)a decrease in the size of the working-age population
D)Increased production of capital goods
5

If the production possibilities curve is a straight line:
A)total production of one good will equal total production of the other
B)resources are perfectly shiftable between the two goods.
C)the two products have identical opportunity costs
D)production of both goods can increase in proportion to one another
6

A country can eventually shift its production possibilities curve outward by:
A)reducing unemployment
B)engaging in international trade
C)running a trade deficit
D)shifting resources from consumer goods to capital goods
7

Over the past several decades the percentage of women in the paid U.S. workforce has:
A)decreased in spite of increasing wages for women
B)increased simply because there are more women than before in the population
C)increased partly owing to higher wages
D)increased for young women, but decreased for older women
8

If all discrimination in the United States were eliminated:
A)the production possibilities curve would be a straight line
B)production would move from a point inside to a point closer to the production possibilities curve
C)the production possibilities curve would become more convex ("bowed out")
D)the production possibilities curve would shift inwards
9

If we observe that the production possibilities curve becomes steeper as we move down along the curve, then:
A)opportunity costs are increasing
B)society's resources are limited
C)society's wants are unlimited
D)opportunity costs are constant
10

Moving from left to right, the typical production possibilities curve:
A)has a constant negative slope
B)has a constant positive slope
C)illustrates increasing opportunity costs
D)illustrates decreasing opportunity costs





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