Posted by jordan on Sunday, July 11, 2010 at 5:48pm.
1.╩A production-possibilities curve indicates the:╩
A.╩Combinations of goods and services an economy is actually producing.
B.╩Maximum combinations of goods and services an economy can produce given its available resources and technology.
C.╩Maximum combinations of goods and services an economy can produce given unlimited resources.
D.╩Average combinations of goods and services an economy can produce given its available resources and technology.
2.╩The production-possibilities curve illustrates:╩
A.╩The limitations that exist because of scarce resources.
B.╩That there is no limit to what an economy can produce.
C.╩That there is no limit to the level of output.
D.╩The existence of unlimited wants and resources.
3.╩According to the law of increasing opportunity costs:╩
A.╩The more one is willing to pay for resources, the larger will be the possible level of production.
B.╩Increasing the production of a particular good will cause the price of the good to rise.
C.╩In order to produce additional units of a particular good, it is necessary for society to sacrifice increasingly larger amounts of alternative goods.
D.╩Only by keeping production constant can rising prices be avoided.
4.╩If the United States decides to convert automobile factories to tank production, as it did during World War II, but finds that some auto manufacturing facilities are not well suited to tank production, then:╩
A.╩The production-possibilities curve between tanks and automobiles will appear as a straight line.
B.╩The production-possibilities curve between tanks and automobiles will shift outward.
C.╩Decreasing opportunity costs will occur with greater automobile production.
D.╩Increasing opportunity costs will occur with greater tank production.
5.╩The points on a production-possibilities curve show:╩
D.╩All of the above.
6.╩Which of the following is an example of government failure?╩
B.╩Required use of pollution-control technology that is obsolete
D.╩Bureaucratic delays, required use of pollution-control technologies that are obsolete, and inefficient incentives
7.╩In Figure 1.6, at which of the following points would the opportunity cost of producing one more car be the lowest?╩
╩The following multiple-choice question requires critical thinking about In the News and World View articles that appeared in the text.
8.╩One World View article is titled "Food Shortages Plague N. Korea." On a production-possibilities curve between private and public goods, a decrease in military spending in an effort to increase food production could be represented as:╩
A.╩A movement along the production-possibilities curve toward public goods.
B.╩A movement along the production-possibilities curve toward private goods.
C.╩A shift outward of the production-possibilities curve.
D.╩A shift inward of the production-possibilities curve.
9.╩In Figure 1.9, as you move up the curve from Point J toward Point M, the slope:╩
10.╩A linear function can be distinguished by:╩
A.╩The continuous change in its slope.
B.╩The same slope throughout the line.
C.╩The changing relationship between the two variables.
D.╩A shift in the function.
11.╩The GDP is a measure of the market value of all final goods and services produced in the economy in a given time period.╩
12.╩The standard of living rises when population growth exceeds economic growth.╩
13.╩The relative decline in goods production means that we're producing fewer goods than in earlier decades.╩
14.╩In economics, investment is the expenditure by businesses on new plant and equipment.╩
15.╩All federal government spending is counted in GDP.╩
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