Question 1

Use the following figure to answer the questions: Figure 1.7:

-The cost of producing at point D rather than point J is :

Accepted Answer

A)  KM units of clothing.
B)  AC units of food.
C)  OM units of clothing.
D)  OA units of food.E) A) and D)
F) B) and D)

Question 2

Table 1.2 shows the hypothetical trade-off between different combinations of Stealth bombers and B-1 bombers that might be produced in a year with the limited U.S.capacity,ceteris paribus.Complete the table by calculating the required opportunity costs for both the B-1 and Stealth bombers. 
-Refer to Table 1.2.In the production range of 20 to 35 B-1 bombers,the opportunity cost of producing 1 more B-1 bomber is

Accepted Answer

A)  195/20 of Stealth bombers.
B)  35/20 of Stealth bombers.
C)  15 Stealth bombers.
D)  1 Stealth bomber.E) A) and B)
F) B) and D)

Question 3

Macroeconomics focuses on the performance of

Accepted Answer

A)  Individual consumers.
B)  Government agencies.
C)  The overall economy.
D)  All of the choices are correct.E) C) and D)
F) A) and B) C

Question 4

Opportunity cost is a theoretical concept with no practical application.

Accepted Answer

A) True 
 B)False

Question 5

Use the following figure to answer questions: Figure 1.3 
-Which of the following is true about the combination of mops and brooms represented by point E in Figure 1.3 and using PP1?

Accepted Answer

A)  Point E is efficient now.
B)  Point E is attainable if this economy uses more of its available resources.
C)  Point E is unattainable if this economy becomes more efficient.
D)  Point E is attainable only if more resources become available or technological advances are made.E) B) and C)
F) A) and C)

Question 6

Table 1.3 shows the hypothetical trade-off between different combinations of brushes and combs that might be produced in a year with the limited capacity for Country X,ceteris paribus.Complete the table by calculating the required opportunity costs for brushes and combs. 
- On the basis of your calculations in Table 1.3,in the production range of 21 to 23 brushes the opportunity cost of producing more comb in terms of brushes is

Accepted Answer

A)  1/21.
B)  21/23.
C)  1/2.
D)  4.E) B) and C)
F) All of the above

Question 7

Use the following figure to answer questions: Figure 1.4 1
-In Figure 1.4,a shift of the production possibilities curve from PP1 to PP2 could be caused by

Accepted Answer

A)  An increase in the unemployment rate.
B)  Implementation of training programs that improve the skills of workers.
C)  A flu epidemic that makes many workers sick.
D)  Tougher pollution controls for the producers of plasma televisions and MP3 players.E) B) and C)
F) All of the above

Question 8

Which of the following can be used to correct market failure?

Accepted Answer

A)  The market mechanism.
B)  Laws and regulations.
C)  Laissez faire price policies.
D)  Government failure.E) B) and C)
F) A) and D)

Question 9

The slope of a production possibilities curve is positive.

Accepted Answer

A) True 
 B)False

Question 10

When the invisible hand does not produce optimal outcomes for the economy,there is evidence of

Accepted Answer

A)  Market failure.
B)  Government failure.
C)  Macroeconomic failure.
D)  Scarcity.E) A) and B)
F) A) and D)

Question 11

Table 1.1 shows the hypothetical trade-off between different combinations of Stealth bombers and B-1 bombers that might be produced in a year with the limited U.S.capacity,ceteris paribus.Complete the table by calculating the required opportunity costs for both the B-1 and Stealth bombers. 
-The lowest opportunity cost anywhere in Table 1.1 for B-1 bombers in terms of Stealth bombers is

Accepted Answer

A)  0 Stealth bombers per B-1 bomber.
B)  2 Stealth bombers per B-1 bomber.
C)  1 Stealth bomber per B-1 bomber.
D)  0.5 Stealth bomber per B-1 bomber.E) None of the above
F) B) and C)

Question 12

Which of the following is not a basic decision that all nations must confront?

Accepted Answer

A)  Should we have economic growth?
B)  How should we produce goods and services?
C)  For whom should goods and services be produced?
D)  What goods and services should we produce?E) A) and B)
F) C) and D)

Question 13

Table 1.2 shows the hypothetical trade-off between different combinations of Stealth bombers and B-1 bombers that might be produced in a year with the limited U.S.capacity,ceteris paribus.Complete the table by calculating the required opportunity costs for both the B-1 and Stealth bombers.  On the basis of your calculations in Table 1.2
-what is gained by producing at point B rather than point C?

Accepted Answer

A)  45 B-1 bombers.
B)  30 Stealth bombers.
C)  180 Stealth bombers.
D)  10 B-1 bombers.E) B) and D)
F) A) and C)

Question 14

Use the following figure to answer the questions: Figure 1.5

-if an economy is currently producing on PP2,which of the following would shift the production possibilities curve toward PP1?

Accepted Answer

A)  An increase in the quantity of labor available.
B)  A decrease in the amount of capital available.
C)  An increase in the level of unemployment above the normal level.
D)  An advancement in technology.E) A) and D)
F) A) and C)

Question 15

Which of the following will cause the production possibilities curve to shift inward?

Accepted Answer

A)  An increase in the working-age population.
B)  A decrease in the size of the labor force.
C)  A technological advance.
D)  An increase in knowledge.E) B) and C)
F) C) and D) B

Question 16

If market signals result in pollution beyond the optimal level,then

Accepted Answer

A)  The economy experiences government failure.
B)  A laissez faire approach will reduce the level of pollution.
C)  The market mechanism has failed to achieve social efficiency.
D)  The government is allocating resources inefficiently.E) C) and D)
F) All of the above

Question 17

Adam Smith's invisible hand is now called

Accepted Answer

A)  Economic growth.
B)  The market mechanism.
C)  Opportunity cost.
D)  Laissez faire.E) A) and D)
F) B) and C)

Question 18

Which of the following is an example of government failure?

Accepted Answer

A)  Bureaucratic delays.
B)  Required use of pollution control technology that is obsolete.
C)  Inefficient incentives.
D)  All of the choices are correct.E) B) and D)
F) B) and C) D

Question 19

The doctrine of laissez faire is based on the belief that

Accepted Answer

A)  Markets are likely to do a better job of allocating resources than government directives.
B)  Government directives are likely to do a better job of allocating resources than markets.
C)  Government failure does not exist.
D)  Markets result in an unfair distribution of income.E) None of the above
F) A) and C)

Question 20

Critics of government regulation argue that government interference in the marketplace stifles the animal spirits of entrepreneurship.

Accepted Answer

A) True 
 B)False

Exam 1: Economics: the Core Issues Appendix: Using Graphs

Use the following figure to answer the questions: Figure 1.7: -The cost of producing at point D rather than point J is :

Correct Answer
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Correct Answer
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Macroeconomics focuses on the performance of

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C

Opportunity cost is a theoretical concept with no practical application.

Correct Answer
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Use the following figure to answer questions: Figure 1.3 -Which of the following is true about the combination of mops and brooms represented by point E in Figure 1.3 and using PP1?

Correct Answer
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Use the following figure to answer questions: Figure 1.4 1 -In Figure 1.4,a shift of the production possibilities curve from PP1 to PP2 could be caused by

Correct Answer
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Which of the following can be used to correct market failure?

Correct Answer
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The slope of a production possibilities curve is positive.

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When the invisible hand does not produce optimal outcomes for the economy,there is evidence of

Correct Answer
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Which of the following is not a basic decision that all nations must confront?

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Use the following figure to answer the questions: Figure 1.5 -if an economy is currently producing on PP2,which of the following would shift the production possibilities curve toward PP1?

Correct Answer
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Which of the following will cause the production possibilities curve to shift inward?

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B

If market signals result in pollution beyond the optimal level,then

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Adam Smith's invisible hand is now called

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Which of the following is an example of government failure?

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D

The doctrine of laissez faire is based on the belief that

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Critics of government regulation argue that government interference in the marketplace stifles the animal spirits of entrepreneurship.

Correct Answer
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Exam 1: Economics: the Core Issues Appendix: Using Graphs

Use the following figure to answer the questions: Figure 1.7: -The cost of producing at point D rather than point J is :

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Macroeconomics focuses on the performance of

Correct AnswerverifiedC

Opportunity cost is a theoretical concept with no practical application.

Correct AnswerverifiedShow Answer

Use the following figure to answer questions: Figure 1.3 -Which of the following is true about the combination of mops and brooms represented by point E in Figure 1.3 and using PP1?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Use the following figure to answer questions: Figure 1.4 1 -In Figure 1.4,a shift of the production possibilities curve from PP1 to PP2 could be caused by

Correct AnswerverifiedShow Answer

Which of the following can be used to correct market failure?

Correct AnswerverifiedShow Answer

The slope of a production possibilities curve is positive.

Correct AnswerverifiedShow Answer

When the invisible hand does not produce optimal outcomes for the economy,there is evidence of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is not a basic decision that all nations must confront?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Use the following figure to answer the questions: Figure 1.5 -if an economy is currently producing on PP2,which of the following would shift the production possibilities curve toward PP1?

Correct AnswerverifiedShow Answer

Which of the following will cause the production possibilities curve to shift inward?

Correct AnswerverifiedB

If market signals result in pollution beyond the optimal level,then

Correct AnswerverifiedShow Answer

Adam Smith's invisible hand is now called

Correct AnswerverifiedShow Answer

Which of the following is an example of government failure?

Correct AnswerverifiedD

The doctrine of laissez faire is based on the belief that

Correct AnswerverifiedShow Answer

Critics of government regulation argue that government interference in the marketplace stifles the animal spirits of entrepreneurship.

Correct AnswerverifiedShow Answer

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C

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B

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D

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