13. When you make the decision to spend your time attending class, which economic question are you answering? A) What? B) How? C) For whom? D) Why? E) Is this in the social interest? 14. The question of "What goods and services get produced?" most closely relates to which of the following issues? A) the distribution of goods and services in the economy B) producing goods and services in the least costly manner C) building a missile defense system, or putting a computer in every elementary school classroom Dj obtaining specialized training to increase one's income E) taxing high income workers to give payments to poor households 15. When Fresh Express Salads decides to mechanically pick all of its lettuce, it directly answers the question. A) what Bj how C) for whom D) where E) when 16. Canada has nationalized health care, so that everyone, regardless of their ability to pay, has some access to health care. Based on this observation, Canada has decided that "everyone, regardless of their ability to pay" is the answer to what microeconomic question? A) What type of health care will be produced and in what quantity? B) How will health care be produced? C) For whom will health care be produced? D) Why will we offer health care? E) Must we offer health care? 17. In economics, cost is measured as and benefit is measured as A) what you must give up to get something; what you are willing to give up to get it B) what you are willing to give up to get it; what you must give up to get something C) the amount of money that you pay for something; the amount of money that someone else is willing to pay you D) what you are willing to pay on the margin; what the government pays you when you are unemployed or retired E) the amount of money that you pay on the margin; the amount of money that you receive on the margin7. Which of the following is a microeconomic issue? A) The price of gasoline increases in the United States this year. B) The Brazilian economy experiences rapid economic growth. C) The unemployment rate soars in Spain. D) Inflation skyrockets in Russia. E) The U.S. government cuts taxes to combat a recession. 8. Which of the following is a microeconomic issue? A) Growth in the U.S. economy slowed. B) Increased federal government expenditures have lowered the unemployment rate. C) The effect the COVID-19 pandemic has on the unemployment rate. D) The quantity of wheat grown in the United States increases this year. E) The U.S. government cuts taxes to combat a recession. 9. Which of the following is a microeconomic topic? i. Gas prices increase after a hurricane hits the gulf coast. ii. Xavier starts a new business designing web pages. ii. Abby decides to practice an extra hour of soccer instead of studying. A) i, ii and iii Bj i only C) ii and iii Dj ii only E) i and ii 10. Macroeconomics is the study of A) the actions of individual consumers. B) national or global economies. C) the actions of individual businesses. D) the government. E) how ceteris paribus affects causation 11. Which of the following is a topic studied in macroeconomics? A) the pricing decisions in the computer hardware industry B) the effect on economic growth if the government raises taxes C) how the wheat industry determines how much wheat to grow D) the impact of labor unions on wages E) the impact of higher prices for gasoline on the number of SUV's people buy 12. Which of the following is a macroeconomic topic? i. China increases interest rates to slow its economic growth. i. Congress lowers tax rates to try to lower the unemployment rate. ili. Nissan decides to produce more electric Leaf models and fewer Altima sedans. A) i and ii Bj i, ii and iii C) ii only Dj i and iii E) ii and ili18. An opportunity cost is: A) the dollar amount that is paid. Bj anything the decision maker believes costs to be. C) the benefits of the highest-valued alternative forgone. D) whatever is paid out and cannot be reduced or reversed. E) another term for all the sunk costs. 19. If Jessie studies economics for two hours instead of going to the movies with her friends, then: A) the benefit of studying is the missed movie. Bj the opportunity cost of studying is the missed movie. C) Jesse definitely is making a rational choice. D) Jessie is ignoring a sunk cost. E) Jessie is not responding to any incentives. 20. A rational choice is one that A) always turns out for the best for the decision maker. Bj creates no costs for the decision maker. C) must be made with perfect information. D) uses the available resources to most effectively satisfy the wants of the person making the choice. E) is made in the social interest rather than the self-interest. 21. The cost of a one-unit increase in an activity is called the A) opportunity benefit. B) rational cost. C) marginal cost. D) marginal benefit. E) margin. 22. In the production possibilities model, the vertical axis measures and the horizontal axis measures A) the quantity of a good or service; the quantity of another good or service B) the price of a good or service; the quantity of the good or service C) the price of a good or service; the price of another good or service D) the quantity of a good or service; time E) people's wants; the quantity of a good or service 23. The production possibilities frontier illustrates the Aj maximum combinations of goods and services that can be produced. Bj resources the economy possess, but not its level of technology. C) goods and services that people want. D) limits to people's wants. E) amount of each good that people want to buy.24. A production possibilities frontier shows A) the various combinations of output a nation can produce a certain time, given its available resources and technology- Bj the limits to future growth of a nation. C) how money can be allocated among two kinds of goods. D) that if price of one good decreases, the price of the other has to increase. E) that it is impossible to produce inefficiently. 25. The figure below shows the production possibilities frontier for a country. A combination of 4 million gallons of milk and 4 million gallons of ice cream is: Ice cream (millions of gallons per year) 3 Milk (millions of gallons per year) Figure 1 A) attainable and production inefficient. (B) attainable and production efficient C) unattainable. D) unattainable and production efficient. E) More information is needed to determine if the point is attainable or not.Video tape (millions per year) . D .C A Fast food meals (millions per year) Figure 2 26. Which point in the figure above is an attainable combination that would have unemployed resources? A) point A Bj point B C) point C D) point D E) point A and point B 27. As we move along the production possibilities frontier, A) the production of one good increases as the production of the other good decreases. B) the possibilities of tradeoffs diminish. C) a tradeoff is not possible because nations need all goods. D) more of both goods can be produced. E) less of both goods can be produced.Ice cream (millions of gallons per year) IIII 4 0 2 Milk (millions of gallons per year) Figure 3 28. The figure above shows the production possibilities frontier for a country. The opportunity cost of a gallon of milk between combination point A and B is A) 4 gallons of ice cream for a gallon of milk. B) 3 gallons of ice cream for a gallon of milk. C) 1 gallon of ice cream for a gallon of milk. D) 1/3 of a gallon of ice cream for a gallon of milk. E) zero because at point A, zero milk is being produced Question 29 to 32 based on Figure 4. A Figure 429. In the figure, which of the following combinations of the two goods cannot be produced with the current resources and technology? A) 2 million cell phones and 13 million DVDs B) 4 million cell phones and 4 million DVDs C) 1 million cell phones and 14 million DVDs D) 3 million cell phones and 5 million DVDs E) 5 million cell phones and no DVDs 30. In the figure, which of the following combinations of the two goods are efficient? A) 2 million cell phones and 13 million DVDs B) 5 million cell phones and 15 million DVDs C) no cell phones and 15 million DVDs D) 4 million cell phones and 4 million DVDs E) None of these combinations is efficient. 31. In the figure, when the economy moves from point E to point D, what is the opportunity cost of a DVD? A) 0.5 cell phones B) 0.25 cell phones C) 1 cell phone D) 4 cell phones E) zero 32. In the figure, when the economy moves from point D to point C, the opportunity cost of producing one more DVD and when it moves from point C to D, the opportunity cost of producing one more cell phone A) increases, increases B) increases; decreases C) decreases; decreases D) decreases; increases E) increases; remains the same1. Scarcity exists because: A) human wants exceed the resources available to satisfy them. B) some individuals have low income. C) the costs of production are high. D) some people make bad economic decisions. E) people take too much leisure time. 2. Scarcity A) is the inability to satisfy all our wants. Bj leads to higher prices. C) applies only to people living in poverty. D) is not something that affects very rich people. E) used to exist everywhere but has been eliminated in advanced economies. 3. Which of the following statements BEST describes the study of economics? Economics studies how A) to organize production so that scarcity does not occur. Bj firms make profits. C) we make choices in the face of scarcity. D) to create incentives so that scarcity does not exist. E) businesses reach decisions. 4. What is the reason that all economic issues and problems occur? A) All nations use some form of money to buy and sell goods and services. B) Humans are always wasteful and inefficient in production and consumption. C) Powerful governments are able to control production and consumption. D) Human wants exceed the resources available to satisfy them. E) People seek only their own self-interest. 5. The study of economics is best described as a study of A) the factors that influence the stock and bond markets. Bj capitalism. C) the choices made in producing goods and services. D) coping with scarcity, and choices made as a result of scarcity in a society. E) how people earn a living. 6. Microeconomics includes the study of the A) aggregate effects on the national economy. B) recessions and inflation in the global economy. C) choices made by individuals and businesses. D) reasons why the government changes interest rates. E) nationwide unemployment rate