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| 1 | |
The scarcity problem: |
| | A) | can be eliminated if all countries adopt laissez-faire capitalism |
| | B) | will persist so long as productive resources are limited |
| | C) | persists only in the developing countries |
| | D) | will be eliminated if full employment is achieved |
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| 2 | |
The role of theorizing is to: |
| | A) | substitute for "policy economics" |
| | B) | arrange and interpret facts |
| | C) | lend practical support to the "economic perspective" |
| | D) | refute marginal analysis |
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| 3 | |
You should decide to study an extra hour tonight |
| | A) | if the marginal cost of studying an extra hour exceeds its marginal benefit |
| | B) | if the marginal benefit of studying an extra hour exceeds its marginal cost |
| | C) | if you got a lower than expected grade on your last exam |
| | D) | because studying harder will improve your test scores |
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| 4 | |
When constructing a typical production possibilities curve, economists assume: |
| | A) | economic resources are underutilized |
| | B) | resources are equally productive in many alternative uses |
| | C) | all available resources are fully employed |
| | D) | production technology is allowed to vary |
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| 5 | |
Microeconomics: |
| | A) | is particularly subject to the "fallacy of composition" |
| | B) | is concerned with the economy as a whole |
| | C) | studies how supply and demand determine prices in individual markets |
| | D) | describes the aggregate flows of output and income |
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| 6 | |
Answer the next question on the basis of the data given in the following production possibilities table:
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Refer to the above table. These data indicate that increasing production of capital goods requires: |
| | A) | increasing sacrifices of consumer goods |
| | B) | decreasing sacrifices of consumer goods |
| | C) | constant sacrifices of consumer goods |
| | D) | no sacrifices of consumer goods |
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| 7 | |
Refer to the following diagram:
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The slope of curve ZZ at point C is: |
| | A) | positive |
| | B) | negative |
| | C) | zero |
| | D) | undefined |
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| 8 | |
Consider the choice Marsha faces of how to allocate her weekly allowance between books and CDs. An increase in Marsha's income will: |
| | A) | shift her budget line to the right |
| | B) | rotate her budget line, allowing her to buy more books but not more CDs |
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| 9 | |
The negative slope of the production possibilities curve illustrates that: |
| | A) | some resources are always unemployed |
| | B) | an economy can produce more of one thing only by producing less of something else |
| | C) | opportunity costs are constant |
| | D) | business can sell more when prices are low |
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| 10 | |
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 |
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