Jess
January 16th, 2013, 06:52 PM
Please check that my answers are correct by Jan 21. Thanks in advance.
Chosen answers are in bold
1. College-age athletes who drop out of college to play professional sports:
A. are concerned more about present circumstances than their future.
B. are well aware that their opportunity cost of attending college is very high.
C. underestimate the value of a college education.
D. are not rational decision makers.
2. A friend comes up to you and offers to give you a free ticket to the local professional team's baseball game that night. You decide to attend the game. The game takes five hours and costs you $15 for transportation. If you had not attended the game, you would have worked at your part-time job for $8 an hour. What is the cost to you of attending the game?
A. $55
B. $40
C. The cost is zero—the ticket is free.
D. $65
3. Factors of production are
A. the mathematical calculations firms make in determining their optimal production levels.
B. the physical relationship between economic inputs and outputs.
C. inputs into the production process
D. social and political conditions that affect production.
4. If resources are “scarce,” it means that they:
A. are probably not valued by consumers.
B. cannot provide enough goods or services to satisfy all human material wants and needs.
C. have an unlimited supply.
D. have no opportunity cost.
5. Opportunity cost is:
A. the value of the best alternative foregone in making any choice.
B. the benefit derived from a product.
C. the dollar payment for a product.
D. about half of the monetary cost of a product.
6. The best measure of the opportunity cost of any choice is:
A. whatever you have given up to make that choice, even if no monetary costs are involved.
B. the monetary cost of that choice.
C. the cost associated with not taking full advantage of the opportunity offered by that choice.
D. your hourly wage.
7. http://i50.tinypic.com/2uo790m.jpg
Look at the figure Guns and Butter. If the economy were operating at point B, producing 16 guns and 12 pounds of butter per period, a decision to move to point E and produce 18 pounds of butter:
A. makes it clear that this economy experiences decreasing opportunity costs.
B. involves a loss of 8 guns per period.
C. involves a loss of 4 guns per period.
D. indicates you can have more butter and guns simultaneously.
8. http://i50.tinypic.com/2uo790m.jpg
Look at the figure Guns and Butter. Suppose the economy produced 8 guns and 12 pounds of butter per period.
A. Something must be done to reduce the amount of employment.
B. The notion of increasing opportunity cost is invalidated.
C. The economy is still efficient but has made a decision not to buy as much as it could.
D. This is a possible choice but is inefficient.
9. http://i50.tinypic.com/2uo790m.jpg
Look at the figure Guns and Butter. The combination of guns and butter at point H:
A. is attainable but would increase unemployment.
B. cannot be attained, given the level of technology and the factors of production available.
C. can be attained but would cost too much.
D. has no meaning, since it does not relate to the preferences of consumers.
10. http://i50.tinypic.com/2uo790m.jpg
Look at the figure Guns and Butter. This production possibility frontier is:
A. bowed in toward the origin because of constant costs of guns and butter.
B. linear because of constant costs.
C. bowed in toward the origin because of increasing opportunity costs.
D. bowed out from the origin because of increasing opportunity costs.
11. http://i50.tinypic.com/2uo790m.jpg
Look at the figure Guns and Butter. On this figure, points A, B, E, and F:
A. indicate that society wants butter more than it wants guns.
B. indicate constant costs for guns and increasing costs for butter.
C. indicate combinations of guns and butter that society can produce using all of its factors efficiently.
D. show that the opportunity cost of more guns increases but that of more butter decreases.
12. Technological improvements will:
A. shift the production possibility frontier outward.
B. necessarily lead to increased unemployment.
C. shift the production possibility frontier inward.
D. leave the production possibility frontier unchanged.
13. The production possibility frontier is bowed out from the origin because:
A. resources are scarce.
B. resources are not equally suited for the production of both goods.
C. resources are inefficiently used.
D. economic growth leads to inefficiency.
14. The effect of an increase in productive inputs such as labor and capital can be shown by:
A. a point inside of the production possibility frontier.
B. an inward shift of the production possibility frontier.
C. a movement from one point to another along the production possibility frontier.
D. an outward shift of the production possibility frontier.
15. If the production possibility frontier is a straight line, which of the following is true?
A. There is no trade-off between the two goods represented.
B. Opportunity costs are constant.
C. The firm faces increasing costs.
D. The firm faces decreasing costs.
16. http://i47.tinypic.com/wlqi4h.jpg
Look at the figure Bicycles and Radishes I. It shows the production possibility frontiers for two countries that produce only radishes and bicycles. The axes of both graphs are measured in equivalent units. Country A is now operating at point M, and country B is now operating at point N. The opportunity cost of producing an additional ton of radishes would be greater in:
A. neither; the opportunity cost would be the same in both countries.
B. country A.
C. country B.
D. There is not enough information given to answer the question.
17. An economy is said to have a comparative advantage in the production of a good if it can produce that good:
A. outside its production possibilities curve.
B. with a higher opportunity cost than another economy.
C. with more resources than another economy.
D. at a lower opportunity cost than another economy.
18. http://i48.tinypic.com/xcn3pz.jpg
Look at the figure Comparative Advantage. The opportunity cost of producing 1 box of oranges for Westland is:
A. 10 boxes of peaches.
B. 1/4 box of peaches.
C. 1 box of peaches.
D. 4 boxes of peaches.
19. Because Casey can type reports faster and more accurately than Ahmet, Casey has ________ in typing reports.
A. a specialization
B. an absolute advantage
C. a comparative advantage
D. an opportunity cost
20. http://i48.tinypic.com/xcn3pz.jpg
Look at the figure Comparative Advantage. Eastland has a comparative advantage in producing:
A. peaches only.
B. neither oranges nor peaches.
C. both oranges and peaches.
D. oranges only.
Chosen answers are in bold
1. College-age athletes who drop out of college to play professional sports:
A. are concerned more about present circumstances than their future.
B. are well aware that their opportunity cost of attending college is very high.
C. underestimate the value of a college education.
D. are not rational decision makers.
2. A friend comes up to you and offers to give you a free ticket to the local professional team's baseball game that night. You decide to attend the game. The game takes five hours and costs you $15 for transportation. If you had not attended the game, you would have worked at your part-time job for $8 an hour. What is the cost to you of attending the game?
A. $55
B. $40
C. The cost is zero—the ticket is free.
D. $65
3. Factors of production are
A. the mathematical calculations firms make in determining their optimal production levels.
B. the physical relationship between economic inputs and outputs.
C. inputs into the production process
D. social and political conditions that affect production.
4. If resources are “scarce,” it means that they:
A. are probably not valued by consumers.
B. cannot provide enough goods or services to satisfy all human material wants and needs.
C. have an unlimited supply.
D. have no opportunity cost.
5. Opportunity cost is:
A. the value of the best alternative foregone in making any choice.
B. the benefit derived from a product.
C. the dollar payment for a product.
D. about half of the monetary cost of a product.
6. The best measure of the opportunity cost of any choice is:
A. whatever you have given up to make that choice, even if no monetary costs are involved.
B. the monetary cost of that choice.
C. the cost associated with not taking full advantage of the opportunity offered by that choice.
D. your hourly wage.
7. http://i50.tinypic.com/2uo790m.jpg
Look at the figure Guns and Butter. If the economy were operating at point B, producing 16 guns and 12 pounds of butter per period, a decision to move to point E and produce 18 pounds of butter:
A. makes it clear that this economy experiences decreasing opportunity costs.
B. involves a loss of 8 guns per period.
C. involves a loss of 4 guns per period.
D. indicates you can have more butter and guns simultaneously.
8. http://i50.tinypic.com/2uo790m.jpg
Look at the figure Guns and Butter. Suppose the economy produced 8 guns and 12 pounds of butter per period.
A. Something must be done to reduce the amount of employment.
B. The notion of increasing opportunity cost is invalidated.
C. The economy is still efficient but has made a decision not to buy as much as it could.
D. This is a possible choice but is inefficient.
9. http://i50.tinypic.com/2uo790m.jpg
Look at the figure Guns and Butter. The combination of guns and butter at point H:
A. is attainable but would increase unemployment.
B. cannot be attained, given the level of technology and the factors of production available.
C. can be attained but would cost too much.
D. has no meaning, since it does not relate to the preferences of consumers.
10. http://i50.tinypic.com/2uo790m.jpg
Look at the figure Guns and Butter. This production possibility frontier is:
A. bowed in toward the origin because of constant costs of guns and butter.
B. linear because of constant costs.
C. bowed in toward the origin because of increasing opportunity costs.
D. bowed out from the origin because of increasing opportunity costs.
11. http://i50.tinypic.com/2uo790m.jpg
Look at the figure Guns and Butter. On this figure, points A, B, E, and F:
A. indicate that society wants butter more than it wants guns.
B. indicate constant costs for guns and increasing costs for butter.
C. indicate combinations of guns and butter that society can produce using all of its factors efficiently.
D. show that the opportunity cost of more guns increases but that of more butter decreases.
12. Technological improvements will:
A. shift the production possibility frontier outward.
B. necessarily lead to increased unemployment.
C. shift the production possibility frontier inward.
D. leave the production possibility frontier unchanged.
13. The production possibility frontier is bowed out from the origin because:
A. resources are scarce.
B. resources are not equally suited for the production of both goods.
C. resources are inefficiently used.
D. economic growth leads to inefficiency.
14. The effect of an increase in productive inputs such as labor and capital can be shown by:
A. a point inside of the production possibility frontier.
B. an inward shift of the production possibility frontier.
C. a movement from one point to another along the production possibility frontier.
D. an outward shift of the production possibility frontier.
15. If the production possibility frontier is a straight line, which of the following is true?
A. There is no trade-off between the two goods represented.
B. Opportunity costs are constant.
C. The firm faces increasing costs.
D. The firm faces decreasing costs.
16. http://i47.tinypic.com/wlqi4h.jpg
Look at the figure Bicycles and Radishes I. It shows the production possibility frontiers for two countries that produce only radishes and bicycles. The axes of both graphs are measured in equivalent units. Country A is now operating at point M, and country B is now operating at point N. The opportunity cost of producing an additional ton of radishes would be greater in:
A. neither; the opportunity cost would be the same in both countries.
B. country A.
C. country B.
D. There is not enough information given to answer the question.
17. An economy is said to have a comparative advantage in the production of a good if it can produce that good:
A. outside its production possibilities curve.
B. with a higher opportunity cost than another economy.
C. with more resources than another economy.
D. at a lower opportunity cost than another economy.
18. http://i48.tinypic.com/xcn3pz.jpg
Look at the figure Comparative Advantage. The opportunity cost of producing 1 box of oranges for Westland is:
A. 10 boxes of peaches.
B. 1/4 box of peaches.
C. 1 box of peaches.
D. 4 boxes of peaches.
19. Because Casey can type reports faster and more accurately than Ahmet, Casey has ________ in typing reports.
A. a specialization
B. an absolute advantage
C. a comparative advantage
D. an opportunity cost
20. http://i48.tinypic.com/xcn3pz.jpg
Look at the figure Comparative Advantage. Eastland has a comparative advantage in producing:
A. peaches only.
B. neither oranges nor peaches.
C. both oranges and peaches.
D. oranges only.