A nation can produce two products: tanks and autos. The table below is the nation's production possibilities:

Refer to the above table. In moving from combination C to B, the opportunity cost of producing 100 more autos is:

Question 1 options:

1)

2 units of tanks

2)

1 unit of tanks

3)

850 units of autos

4)

1800 units of autos

Question 2(1 point)

Refer to the diagram. The combination of computers and bicycles shown by pointGis:

Question 2 options:

1)

attainable but too costly.

2)

unattainable given currently available resources and technology.

3)

attainable but involves unemployment.

4)

irrelevant because it is inconsistent with consumer preferences.

Question 3(1 point)

The slope of the typical production possibilities curve:

Question 3 options:

1)

is positive.

2)

increases as one moves southeast along the curve.

3)

is constant as one moves down the curve.

4)

decreases as one moves southeast along the curve.

Question 4(1 point)

A nation can produce two products: tanks and autos. The table below is the nation's production possibilities:

Given the production possibilities schedule above, a combination of 3 tanks and 350 autos:

Question 4 options:

1)

Illustrates the tradeoff between tanks and autos

2)

Is attainable but entails some unemployment or inefficient use of society's resources

3)

Cannot be produced by society, given its current resources and production technology

4)

Is not attainable because this combination is not listed in the schedule

Question 5(1 point)

A nation can produce two products: tanks and autos. The table below is the nation's production possibilities:

Refer to the above table. If the nation produces more and more tanks, the opportunity cost of each additional tank in terms of autos:

Question 5 options:

1)

Remains constant

2)

Falls

3)

Increases

4)

Cannot be measured

Question 6(1 point)

The following graph is the production possibilities curve of a nation:

Refer to the above graph. Which of the following combinations would be unattainable?

Question 6 options:

1)

8 drill presses and 1 bread

2)

7 drill presses and 2 bread

3)

10 drill presses and 4 bread

4)

2 drill presses and 3 bread

Question 7(1 point)

A nation can produce two products: tanks and autos. The table below is the nation's production possibilities:

Refer to the above table. According to the production possibilities schedule, a combination of 4 tanks and 650 autos is:

Question 7 options:

1)

Attainable, and involves an efficient use of society's resources

2)

Attainable, but would not be in the best interests of a strong national defense

3)

Less than (or below) the maximum attainable output combination

4)

Not attainable because the nation does not have sufficient resources

Question 8(1 point)

The four factors of production are:

Question 8 options:

1)

land, labor, capital, and money.

2)

land, labor, capital, and entrepreneurial ability.

3)

labor, capital, technology, and entrepreneurial ability.

4)

labor, capital, entrepreneurial ability, and money.

Question 9(1 point)

Answer the question on the basis of the data given in the following production possibilities table:

Refer to the table. For this economy to produce a total output of 3 units of capital goods and 13 units of consumer goods, it must:

Question 9 options:

1)

achieve economic growth.

2)

use its resources more efficiently than the data in the table now indicate.

3)

allocate its available resources most efficiently among alternative uses.

4)

achieve the full employment of available resources.

Question 10(1 point)

Refer to the diagram. The equilibrium price and quantity in this market will be:

Question 10 options:

1)

$1.00 and 200.

2)

$1.60 and 130.

3)

$0.50 and 130.

4)

$1.60 and 290.

Question 11(1 point)

Refer to the diagram. A decrease in supply is depicted by a:

Question 11 options:

1)

move from pointxto pointy.

2)

shift from S₁to S₂.

3)

shift from S₂to S₁.

4)

move from pointyto pointx.

Question 12(1 point)

The relationship between quantity supplied and price is _____ and the relationship between quantity demanded and price is _____.

Question 12 options:

1)

direct; inverse

2)

inverse; direct

3)

inverse; inverse

4)

direct; direct

Question 13(1 point)

The term "quantity demanded":

Question 13 options:

1)

refers to the entire series of prices and quantities that comprise the demand schedule.

2)

refers to a situation in which the income and substitution effects do not apply.

3)

refers to the amount of a product that will be purchased at some specific price.

4)

means the same thing as demand.

Question 14(1 point)

When an economist says that the demand for a product has increased, this means that:

Question 14 options:

1)

consumers are now willing to purchase more of this product at each possible price.

2)

the product has become particularly scarce for some reason.

3)

product price has fallen and, as a consequence, consumers are buying a larger quantity of the product.

4)

the demand curve has shifted to the left.

Question 15(1 point)

Refer to the table. In relation to column (3), a change from column (4) to column (5) would most likely be caused by:

Question 15 options:

1)

government placing an excise tax on the good.

2)

an improvement in production technology.

3)

an increase in consumer income.

4)

an increase in input prices.

Question 16(1 point)

A leftward shift of a product supply curve might be caused by:

Question 16 options:

1)

an improvement in the relevant technique of production.

2)

a decline in the prices of needed inputs.

3)

an increase in consumer incomes.

4)

some firms leaving an industry.

Question 17(1 point)

Refer to the diagram. A decrease in quantity demanded is depicted by a:

Question 17 options:

1)

move from pointxto pointy.

2)

shift from D₁to D₂.

3)

shift from D₂to D₁.

4)

move from pointyto pointx.

Question 18(1 point)

At the equilibrium price:

Question 18 options:

1)

quantity supplied may exceed quantity demanded or vice versa.

2)

there are no pressures on price to either rise or fall.

3)

there are forces that cause price to rise.

4)

there are forces that cause price to fall.

Question 19(1 point)

A price floor means that:

Question 19 options:

1)

inflation is severe in this particular market.

2)

sellers are artificially restricting supply to raise price.

3)

government is imposing a maximum legal price that is typically below the equilibrium price.

4)

government is imposing a minimum legal price that is typically above the equilibrium price.

Question 20(1 point)

Refer to the diagram, which shows demand and supply conditions in the competitive market for product X. If supply isS₁and demandD₀, then

Question 20 options:

1)

at any price above 0Ga shortage would occur.

2)

0Frepresents a price that would result in a surplus ofAC.

3)

a surplus ofGHwould occur.

4)

0Frepresents a price that would result in a shortage ofAC.

Question 21(1 point)

Given a downsloping demand curve and an upsloping supply curve for a product, an increase in the price of a substitute good (from the buyer's perspective) will:

Question 21 options:

1)

increase equilibrium price and quantity.

2)

decrease equilibrium price and quantity.

3)

increase equilibrium price and decrease equilibrium quantity.

4)

decrease equilibrium price and increase equilibrium quantity.

Question 22(1 point)

A product market is in equilibrium:

Question 22 options:

1)

whenever there is no surplus of the product.

2)

whenever there is no shortage of the product.

3)

when consumers want to buy more of the product than producers offer for sale.

4)

where the demand and supply curves intersect.

Question 23(1 point)

In this market, economists would call a government-set minimum price of $50 a:

Question 23 options:

1)

price ceiling.

2)

price floor.

3)

equilibrium price.

4)

fair price.

Question 24(1 point)

Refer to the diagram, which shows demand and supply conditions in the competitive market for product X. If the initial demand and supply curves areD₀andS₀, equilibrium price and quantity will be:

Question 24 options:

1)

0Fand 0C, respectively.

2)

0Gand 0B, respectively.

3)

0Fand 0A, respectively.

4)

0Eand 0B, respectively.

Question 25(1 point)

In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X.

Refer to the given information. An increase in the prices of resources used to produce X will:

Question 25 options:

1)

increaseS, increaseP, and increaseQ.

2)

increaseD, increaseP, and increaseQ.

3)

decreaseS, decreaseP, and decreaseQ.

4)

decreaseS, increaseP, and decreaseQ.

Question 26(1 point)

Refer to the diagram, which shows demand and supply conditions in the competitive market for product X. GivenD₀, if the supply curve moved fromS₀toS₁, then:

Question 26 options:

1)

supply has increased and equilibrium quantity has decreased.

2)

supply has decreased and equilibrium quantity has decreased.

3)

there has been an increase in the quantity supplied.

4)

supply has increased and price has risen to 0G.

Question 27(1 point)

Which of the following will cause a decrease in market equilibrium price and an increase in equilibrium quantity?

Question 27 options:

1)

An increase in supply.

2)

An increase in demand.

3)

A decrease in supply.

4)

A decrease in demand.

Question 28(1 point)

A public good:

Question 28 options:

1)

can be profitably produced by private firms.

2)

is characterized by rivalry and excludability.

3)

produces no positive or negative externalities.

4)

is available to all and cannot be denied to anyone.

Question 29(1 point)

Graphically, if the supply and demand curves are linear, consumer surplus is measured as the triangle:

Question 29 options:

1)

under the demand curve and below the actual price.

2)

under the demand curve and above the actual price.

3)

above the supply curve and above the actual price.

4)

above the supply curve and below the actual price.

Question 30(1 point)

The two main characteristics of a public good are:

Question 30 options:

1)

production at constant marginal cost and rising demand.

2)

nonexcludability and production at rising marginal cost.

3)

nonrivalry and nonexcludability.

4)

nonrivalry and large negative externalities.

Question 31(1 point)

Graphically, producer surplus is measured as the area:

Question 31 options:

1)

under the demand curve and below the actual price.

2)

under the demand curve and above the actual price.

3)

above the supply curve and above the actual price.

4)

above the supply curve and below the actual price.

Question 32(1 point)

Which of the following is a key difference between the economic activities of government and those of private firms?

Question 32 options:

1)

Private firms face the constraint of scarcity; government does not.

2)

Government focuses primarily on equity; private firms focus only on efficiency.

3)

Private economic activities create externalities; government activities do not.

4)

Government has the legal right to force people to do things; private firms do not.

Question 33(1 point)

According to the marginal-cost-marginal-benefit rule:

Question 33 options:

1)

only government projects (as opposed to private projects) should be assessed by comparing marginal costs and marginal benefits.

2)

the optimal project size is the one for which MB = MC.

3)

the optimal project size is the one for which MB exceeds MC by the greatest amount.

4)

project managers should attempt to minimize both MB and MC.

Question 34(1 point)

The government's ability to coerce can enhance economic efficiency by:

Question 34 options:

1)

eliminating income inequality.

2)

correcting market failures.

3)

preventing resources from going to their most valued uses.

4)

restraining self-interest.

Question 35(1 point)

Demand-side market failures occur when:

Question 35 options:

1)

the demand and supply curves don't reflect consumers' full willingness to pay for a good or service.

2)

the demand and supply curves don't reflect the full cost of producing a good or service.

3)

government imposes a tax on a good or service.

4)

a good or service is not produced because no one demands it.

Question 36(1 point)

Refer to Table 5.1. The total utility of the fifth soda per day is

Number of Hamburgers per DayTotal UtilityMarginal Utility13025236747654

Number of Sodas per DayTotal UtilityMarginal Utility12023534745757

Question 36 options:

A)

64.

B)

92.

C)

indeterminate from this information.

D)

35.

Question 37(1 point)

The first Pepsi yields Craig 18 units of utility and the second yields him an additional 12 units of utility. His total utility from three Pepsis is 38 units of utility. The marginal utility of the third Pepsi is:

Question 37 options:

1)

26 units of utility.

2)

6 units of utility.

3)

8 units of utility.

4)

38 units of utility.

Question 38(1 point)

The law of diminishing marginal utility states that:

Question 38 options:

1)

total utility is maximized when consumers obtain the same amount of utility per unit of each product consumed.

2)

beyond some point, additional units of a product will yield less and less extra satisfaction to a consumer.

3)

price must be lowered to induce firms to supply more of a product.

4)

it will take larger and larger amounts of resources beyond some point to produce successive units of a product.

Question 39(1 point)

To maximize utility, a consumer should allocate money income so that the:

Question 39 options:

1)

elasticity of demand on all products purchased is the same.

2)

marginal utility obtained from the last dollar spent on each product is the same.

3)

total utility derived from each product consumed is the same.

4)

marginal utility of the last unit of each product consumed is the same.

Question 40(1 point)

Refer to the data. The value for Z is:

Question 40 options:

1)

-5.

2)

+5.

3)

-10.

4)

zero.