Test Bank For Principles and Applications of Economics International Edition 6th Edition by Marc Lieberman

Test Bank For Principles and Applications of Economics International Edition 6th Edition by Marc Lieberman

CHAPTER 2—SCARCITY, CHOICE, AND ECONOMIC SYSTEMS

MULTIPLE CHOICE

1.When opportunity costs rise as more of a good is consumed, the production possibilities frontier will be concave (bowed out) with respect to the origin.

a.	True
b.	False

ANS:APTS:1DIF:Difficulty: Easy

NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost

TOP: Society’s Production Choices KEY: Bloom’s: Comprehension

2.By better utilizing existing resources, an economy can produce at a point outside of its current production possibilities frontier.

a.	True
b.	False

ANS:BPTS:1DIF:Difficulty: Easy

NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost

TOP:Society’s Production ChoicesKEY:Bloom’s: Knowledge

3.The production possibilities frontier is useful for demonstrating both scarcity and productive inefficiency.

a.	True
b.	False

ANS:APTS:1DIF:Difficulty: Moderate

NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost

TOP:The Search for a Free LunchKEY:Bloom’s: Knowledge

4.An economy’s production possibilities frontier is fixed in the long run.

a.	True
b.	False

ANS:BPTS:1DIF:Difficulty: Easy

NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost

TOP:Society’s Production ChoicesKEY:Bloom’s: Knowledge

5.If capital is not being used efficiently, an economy cannot be operating at a point along its production possibilities frontier.

a.	True
b.	False

ANS:APTS:1DIF:Difficulty: Easy

NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost

TOP: Society’s Production Choices KEY: Bloom’s: Comprehension

                  Figure 2-1

6.Figure 2-1 illustrates the trade-off for a particular student between time spent studying per week and income per week from working part-time. What is the opportunity cost for this person of moving from point a to point b?

a.	$5 of income per week
b.	$10 of income per week
c.	two hours of studying per week
d.	$10 per hour of studying per week
e.	$20 of income per week

ANS:BPTS:1DIF:Difficulty: Moderate

NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost

TOP:Society’s Production ChoicesKEY:Bloom’s: Application

7.Figure 2-1 illustrates the trade-off for a particular student between time spent studying per week and income per week from working part-time. What is the opportunity cost for this person of moving from point b to point a?

a.	$5 of income per week
b.	$10 of income per week
c.	two hours of studying per week
d.	$10 per hour of studying per week
e.	$20 of income per week

ANS:CPTS:1DIF:Difficulty: Moderate

NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost

TOP:Society’s Production ChoicesKEY:Bloom’s: Application

8.Figure 2-1 illustrates the trade-off for a particular student between time spent studying per week and income per week from working part-time. If this student does not study at all, how much income can they earn?

a.	$0
b.	$40
c.	$80
d.	$100
e.	$120

ANS:DPTS:1DIF:Difficulty: Moderate

NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost

TOP:Society’s Production ChoicesKEY:Bloom’s: Application

9.Production possibilities frontiers are typically concave (bowed out) from the origin because

a.	of the law of supply
b.	there is usually a one-for-one trade-off in resources used in production
c.	economies of scale enable firms to reduce the average costs of production as output rises
d.	the opportunity cost of a good rises as the quantity of the good produced increases
e.	resources are often left idle in the firm

ANS:DPTS:1DIF:Difficulty: Moderate

NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost

TOP: Society’s Production Choices KEY: Bloom’s: Comprehension

10.Combinations of goods on the production possibilities frontier

a.	are unattainable without additional resources
b.	can be produced using currently available resources and technology
c.	reflect minimum normative value allocations
d.	will meet society’s needs but not its wants
e.	are attainable only through international trade

ANS:BPTS:1DIF:Difficulty: Moderate

NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost

TOP:Society’s Production ChoicesKEY:Bloom’s: Knowledge