Students Again

Question 1 (True/False)

The law of increasing opportunity costs is reflected in a production possibilities curve that is concave to the origin.

True
False

Correct Answer: true

Question 2 (True/False)
The point on the production possibilities curve that produces allocative efficiency can be found by comparing marginal benefits and marginal costs in monetary terms.

True
False

Correct Answer: true

Question 3 (Multiple Choice)
The concept of economic efficiency is primarily concerned with:

A) the limited wants-unlimited resources dilemma.
B) considerations of equity in the distribution of wealth.
C) obtaining the maximum output from available resources.
D) the conservation of irreplaceable natural resources.

Correct Answer: C

Question 4 (True/False)
Full production means that all available workers have jobs.

True
False

Correct Answer: false

Question 5 (True/False)
If economic theories are solidly based on relevant facts, then there can be no question as to the character of appropriate economic policy.

True
False

Correct Answer: false

Question 6 (Multiple Choice)
Which of the following is a land resource?

A) a farmer
B) an oil drilling rig
C) a machine for detecting earthquakes.
D) natural gas

Correct Answer: D

Question 7 (True/False)
Assuming an economy has fixed quantities of resources, that economy is able to produce the same amount of output regardless of the production technologies it chooses.

True
False

Correct Answer: false

Question 8 (True/False)
An economic model is an ideal or Utopian type of economy for which society should strive to achieve through the use of economic policy.

True
False

Correct Answer: false

Question 9 (True/False)
The increasing wealth of the United States has reduced the relevance of economics.

True
False

Correct Answer: false

Question 10 (Multiple Choice)
If the equation y = 5 + 6x was graphed, the:

A) slope would be -5.
B) slope would be +5.
C) slope would be +6.
D) vertical intercept would be +6.

Correct Answer: C

Question 11 (Multiple Choice)
According to Emerson:

A) people are greedy.
B) productive resources are limited.
C) human beings are inherently insecure.
D) people are irrational.

Correct Answer: B

Question 12 (Multiple Choice)
The post hoc (after this, therefore caused by this) fallacy states that:

A) positive statements are always followed by normative judgments.
B) positive statements can never be proven true or false.
C) if one acts on one's expectations, those expectations will always be fulfilled.
D) cause and effect can be determined merely by observing the sequence of events.

Correct Answer: D

Question 13 (Multiple Choice)
A normative statement is one which:

A) is based on the law of averages.
B) pertains only to microeconomics.
C) pertains only to macroeconomics.
D) is based on value judgments.

Correct Answer: D

Question 14 (True/False)
The production possibilities curve is a frontier between all combination's of two goods that can be produced and those combination's that cannot be produced.

True
False

Correct Answer: true

Question 15 (Multiple Choice)
The two basic markets shown by the simple circular flow model are:

A) capital goods and consumer goods.
B) free and controlled.
C) product and resource.
D) household and business.

Correct Answer: C

Question 16 (Multiple Choice)
Economists:

A) use both the economic perspective and the scientific method.
B) use the economic perspective but not the scientific method.
C) make positive economic statements, but not normative economic statements.
D) reject theorizing as being impractical.

Correct Answer: A

Question 17 (True/False)
Rational individuals may make different choices because their preferences and circumstances differ.

True
False

Correct Answer: true

Question 18 (Multiple Choice)
Economics can best be described as the study of:

A) how to profitably invest one's income in stocks and bonds.
B) how to use scarce productive resources efficiently.
C) how government policies affect businesses and labor.
D) managing business enterprises for profit.

Correct Answer: B

Question 19 (Multiple Choice)
The law of increasing opportunity costs exists because:

A) resources are not equally efficient in producing various goods.
B) the value of the dollar has diminished historically because of persistent inflation.
C) wage rates invariably rise as the economy approaches full employment.
D) consumers tend to value any good more highly when they have little of it.

Correct Answer: A

Question 20 (True/False)
The French term laissez-faire means there is no free lunch.

True
False

Correct Answer: false

Question 21 (Multiple Choice)
The main function of the entrepreneur is to:

A) make routine pricing decisions.
B) innovate.
C) purchase capital.
D) create market demand.

Correct Answer: B

Question 22 (Multiple Choice)
If an economy is operating on its production possibilities curve for consumer goods and capital goods, this means that:

A) it is impossible to produce more consumer goods.
B) resources cannot be reallocated between the two goods.
C) it is impossible to produce more capital goods.
D) more consumer goods can only be produced at the cost of fewer capital goods.

Correct Answer: D

Question 23 (Multiple Choice)
Which of the following terms implies the greatest degree of confidence in an economic generalization?

A) a hypothesis
B) a theory
C) a principle
D) an anomaly

Correct Answer: C

Question 24 (Multiple Choice)
Which of the following is associated with macroeconomics?

A) an examination of the incomes of Harvard Business School graduates
B) an empirical investigation of the general price level and unemployment rates in the 1990s
C) a study of the trend of pecan prices since World War II
D) a case study of pricing and production in the textbook industry

Correct Answer: B