What does a production possibilities frontier show?

the maximum amount that an economy can produce

The US government intervenes to

keep order, provide vital sevices, promote general welfare

The economic concept of guns or butter means that

govt must decide to produce more military or consumer goods

What could cause a production possibilities curve to move down and to the left?

Nation loses land after being defeated in war

What can a decision-making grid do?

help you see some opportunity costs for your decision

What is the difference between a shortage and scarcity?

Shortage is temporary or long term, scarcity always exists.

Which of the following is the kind of decision that can be made at the margin?

whether or not to hire new workers

Making a decision at the margin is possible only in situations where

The available alternatives can be divided into increments

An efficient economy is one that

uses its resources to make the most goods and services

All of the following are types of decisions that can be made at the margin EXCEPT

whether or not to go on a vacation

Traditional economies are usually

small communities that avoid change and new technology

A decision is maade at the margin when each alternative considers

cost and benefit ranked in progressive units

Increasing the number of laborers in an economy generally causes a(n)

increase in the production possibilities curve

One example of an entrepeneur is

an artist who runs business painting murals

How did collectives in the Soviet Union avoid competition that drives a free market

No incentives for competition, govt sets prices, wages, etc

Which of the following is an example of scarcity, rather than shortage

person wants endless supply of everything but can't have it

In most mixed economies, the government does NOT

own all property and confiscate all economic output

What is the opportunity cost of a decision?

the most desirable alternative given up for a decision

Law of increasing cost means that as production shifts from one item to another,

more and more resources are necessary to produce second item

A company that makes baseball caps is underutilizing its resources. What does this mean?

The company is producing fewer caps than it could

One example of thinking at the margin is

Deciding if two hours of extra pay is worth lost study time

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Duplicate of Semester Exam 2014 Econ NLR

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Part I semester exam econ NLR

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Questions 85

Answers

1
What does a production possibilities frontier show?
the maximum amount that an economy can produce
an economy that is producing but not at the maximum
global trade-offs and costs of doing business
scarce and less scarce resources
2
The US government intervenes to
provide competition for private firms
keep order, provide vital sevices, promote general welfare
restrict the banking industry
impose barriers on foreign trade
3
A system to protect people from experiencing unfavorable economic conditions
factor payments
safety net
traditional economy
market economy
4
The economic concept of guns or butter means that
a company must decide whether to manufacture guns or butter
person can spend extra money on sports equipment or food
govt buys unlimited military and civilian goods if rich
govt must decide to produce more military or consumer goods
5
What could cause a production possibilities curve to move down and to the left?
Increas in use of computer technology speeds up production
Nation loses land after being defeated in war
Thousands of investors overseas invest in a nation's economy
 Baby boom results in large number of young adults today
6
A range with no clear divisions
 continuum
 transition
 laissez faire
free enterprise
7
What can a decision-making grid do?
show you every possible consequence of your decision
tell you the right course of action
help you see some opportunity costs for your decision
show you every possible benefit of your decision
8
Effort a person devotes to a task for which the person is paid
goods
shortage
labor
economics
9
when a producer cannot offer a particular good or service at the current price
 shortage
goods
labor
 economics
10
Requires a large capital investment and produces items used by others
collective
authoritarian
heavy industry
communism
11
Why are all goods and services scarce?
Some things are needs and others are wants
some goods cost more than others
all resources are scarce
Some people want to have more goods than others
12
To improve its standard of living, a nation's economy must
remain stable
allow the central government to make economic decisions
grow through innovation
reach economic equity
13
What is the difference between a shortage and scarcity?
shortage: lack of all goods/services, scarcity: single item
Shortage is temporary or long term, scarcity always exists.
Shortage is from rising prices;scarcity from falling prices
There is no difference between scarcity and shortage
14
Which of the following is the kind of decision that can be made at the margin?
whether or not to hire new workers
whether to have a dog or a cat as a pet
whether or not to build an extra room on a home
Whether or not to go on vacation
15
Making a decision at the margin is possible only in situations where
The available alternatives can be divided into increments
there are differences in amt of time each alternative uses
available opportunity costs are unclear or complicated
there are more than three alternatives to consider
16
To sell individuals state-run firms, which then compete with one another in the market place
laissez faire
transition
 free enterprise
 privatize
17
An efficient economy is one that
uses its resources to make the most goods and services
has very few peoplw who do not work for a living
makes the least costly use of its resources
makes the best use of all its goods and services
18
All of the following are types of decisions that can be made at the margin EXCEPT
whether or not to hire new workers
whether to leave early or late for a trip
whether or not to go on a vacation
whether to grow beans or corn on a large far
19
An economy that is not using all its resources
opportunity cost
efficiency
underutilization
law of increasing costs
20
What is a factory building an example of?
human capital
physical capital
an economic trade-off
technology
21
The hope of reward or fear of penalty that encourages a person to behave a certain way
consumer sovereignty
incentive
market
self-interest
22
Traditional economies are usually
small communities that welcome change and new technology
large communities that welcome change and new technology
small communities that avoid change and new technology
large communities able to deal with environmental disaster
23
The opportunity cost of a decision can be examined by using a
production possibilities graph
graph of increasing costs
global trade off grid
factors of production chart
24
The income people receive for supplying factors of production
market economy
traditional economy
factor payments
safety net
25
A philosphy based on belief that democratic means should evenly distribute wealth in a society
socialism
authoritarian
heavy industry
communism
26
The resources used to make all goods and services are the
opportunity costs
production possibilities
Production trade offs
factors of production
27
The method used by a society to produce and distribute goods and services
traditional economy
safety net
factor payments
economic system
28
A decision is maade at the margin when each alternative considers
where the most costly alternative will be.
 cost and benefit ranked in progressive units
what the "all or nothing" alternative will be
a different trade-off than the others
29
Increasing the number of laborers in an economy generally causes a(n)
decrease in the production possibilities curve
decrease in the opportunity cost of production
increase in the opportunity cost of production
increase in the production possibilities curve
30
Physical objects such as baseballs or umbrellas
economics
goods
shortage
labor
31
Who owns the factors of production?
households
the market
firms
individuals
32
Government decides between increase military spending and subsidizing farmers. This decision is
basic economic decision
global trade-off
guns or butter issue
decision at the margin
33
One example of an entrepeneur is
Olympic ice skater joining professional ice show
a writer hired by firm to write a screen play
an artist who runs business painting murals
lawyer in high-profile law firm that in business law
34
Law says shifting factors of production to produce a different item requires more resources
law of increasing costs
efficiency
trade-off
underutilization
35
How did collectives in the Soviet Union avoid competition that drives a free market
It was illegal to buy products from competitor
Heavy industry was not a direct competitior
Farmers were not able to sell their own products
No incentives for competition, govt sets prices, wages, etc
36
Which of the following is an example of scarcity, rather than shortage
Gasoline was rationed during WW II
A popular toy is sold out during the holidays
person wants endless supply of everything but can't have it
You have spent your last penny and payday is a week away
37
If you choose between two summer jobs, the one you do not choose is the_______of your decision.
decision at the margin
opportunity cost
opportunity at the margin
trade-off
38
Who decided what farmers would produce on Soviet collectives?
the consumers
the government
the farmers
the military
39
In most mixed economies, the government does NOT
redistribute wealth through taxes and other means
purchse goods and services in the product market
own all property and confiscate all economic output
 buy land,labor,capital from households in factor market
40
Period of change when an economy moves from centrally planned economy to market-based system
free enterprise
transition
continuum
privatize
41
What is the opportunity cost of a decision?
the most desirable alternative given up for a decision
The best possible way the question could have been decided
The series of alternate decisions that could have been made
different ways a different person made a decision
42
An economic system that permits the conduct of business with minimal government intervention
privatize
laissea faire
free enterprise
continuum
43
Law of increasing cost means that as production shifts from one item to another,
more and more resources are necessary to produce second item
land costs of increased production rise more than labor
cost of producing item stays the same
cost of production gets cheaper and cheaper
44
To what part of an industry does a workers education contribute?
scarce resources
technology
physical capital
human capital
45
An economy that is producing the maximum amount of goods and services is considered
trading off
growing
efficient
underutilized
46
A company that makes baseball caps is underutilizing its resources. What does this mean?
The company is producing caps when it could make t-shirts
The company is producing fewer caps than it could
The company is paying its employees less than it should
The company is running more efficiently than its competitors
47
The curve usually seen in a production possibilities frontier can be explained by
underutilization of resources
increasing an economy's efficiency
the law of increasing costs
growth in the economy
48
A production possibilities curve shows the relationship between the production of
farm goods and factory goods
any two categories of goods
two types of factory goods
two types of farm goods
49
Requiring strict obedience to an authority such as a dictator
collective
laissez faire
authoritarian
communism
50
One example of thinking at the margin is
deciding to spend saving on CD player or TV
put all money in saving acct because of high interest rates
Deciding if two hours of extra pay is worth lost study time
buy car you don't like cause it's cheaper than one you want
51
An economy that is using all its resources to produce the maximum output of goods and services
thinking at the margin
efficiency
law of increasing costs
under utilization
52
line of a prod. possibilities curve showing relative amts of 2 goods produced with all resource
opportunity cost line
utilization of resources
maximum possible production line
production possibilities curve
53
Which of the following is NOT shown on a production possibilities curve?
all of the goods and services an economy is able to produce
whether an economy has grown or shrunk
 the efficiency of an economy
 opportunity cost of a decision to produce more of one
54
Which of the following are factors of production?
technology and productivity
economics and business decisions
capital and land
scarcity and shortages
55
Human capital includes
a taxi driver's knowledge of the city streets
the salary paid to an accountant
the machinery used to weave cloth
the equipment a doctor uses to cure a patient
56
The purpose of a production possibilities graph is to
keep an economy from having nonproductive workers
show alternative ways to use an economy's resources
make it possible to increase an economy's output
enable a country to mobilize to win a war
57
The law of increasing costs means that when an economy increases the production of one item
the opportunity cost goes up
the production costs will increase also
the actual cost of making the item goes down
the actual cost goes up but opportunity cost goes down.
58
A decision-making grid is a visual way of
selling goods or services
examining opportunity costs
identifying shortages
making marginal decisions
59
The power of consumers to decide what gets produced
market
consumer sovereignty
self interest
incentive
60
Every decision involves trade-offs because
everyone's resources are limited
everyone has to make decisions
some decisions are made for business, some for society
some people have more money than others
61
Which of the following is NOT an advantage of a free market economy
economic equity
economic efficiency
economic growth
economic freedom
62
What "invisible hand" regulates the free market economy?
competition and self-interest
specialization
competition between firms
incentives and efficiency
63
Each society determines who will consume what is produced based on
unique combination of social values and goals
its needs and wants
the amount of factor payments
economic equity
64
An economy in which economic decisions are based on exchange or trade
safety net
market economy
economic system
factor payments
65
Any economy in which only the government makes economic decisions is a
mixed economy
traditional economy
market economy
centrally planned economy
66
The most attractive alternative that is given up when a decision is made
opportunity cost
efficiency
thinking at the margin
 trade-off
67
An individual's own personal gain
self-interest
 market
 consumer sovereignty
incentive
68
When you make a decision to use one more or one less unit of something such as time or workers
thinking at the margin
trade-off
opportunity cost
efficiency
69
Which of the following lists would an economist consider to be land
dams, bridges, rock quarries, oil wells
iron ore, natural gas, fertile soil, water
factories, office buildings, assembly lines, workers
farm fields, tractors, pesticides, fertilizers
70
which of the following is an entrepreneur
person who works as highly paid computer programmer
person starts all-organic cleaning business employs others
person who earns a lor of money as a singer or dancer
one who creates a game and sells it to game manufacturer
71
Any alternative that is given up when a decision is made
efficiency
trade-off
thinking at the margin
opportunity cost
72
Any arrangement that allows buyers and sellers to exchange things
incentive
self-interest
market
consumer sovereignty
73
Pure market economies always
make fair or efficient decisions to allow for growth
divide work along gender lines
allow the central government to make economic decisions
base economic decisions on exchange or trade
74
What does an economist mean by the term land?
goods and services produced from the land
all natural resources used to produce goods and services
farmland only
food crops grown on farmland as well as farmland itself
75
Carol wants to buy a CD has money to buy only one and picks CD A over CD B, then CD B is the
decision at the margin
trade-off
opportunity at the margin
opportunity cost
76
Why might soviet economic planner favored heavy industry over makers of consumer ?
Products of heavy industry brought in more money
Consumer goods are not good economic investments
Heavy industry provide material for other industries
There were more people trained to work in heavy industry
77
Why do people need to buy and sell products or services?
Consumers purchase all they need and firms make more
To provide the market with goods and services
No one is self-sufficient
to buy and sell products to make a profit
78
Why are free market economies able to attain economic growth?
Everyone acts in self-interest motivating market growth
firms produce more incentives so households will buy more
Consumers purchase all they need cause firms to produce more
Competition encourages innovation which causes growth
79
An example of using physical capital to save time and money
building extra space in a factory to simplify production
hiring more workers to do a job
switching from oil to coal to make it cheaper
lowering workers wages to increase profits
80
New robotic machine made to build cars. Cars take only a day to make. Growth from increase in
human capital
land and natural resources
production possibility curves
physical capital
81
An economy that is NOT using all its resources to gain maximum possible production is
trading off
efficient
growing
underutilized
82
Study of how people make decisions to satisfy their needs and wants
shortage
goods
labor
economics
83
The lack of which of the following represents a scarcity?
enough workers to work at night because the pay is too low
grapefruit juice because few people want to buy it
orange juice cause the trucks carrying it are on strike
enough workers to finish 2 jobs cause limited # of workers
84
All of the following are trade-offs for a student studying abroad EXCEPT
 missing family activities at home
 experiencing culture of a different country
Eating all their favorite foods
 seeing friends from home daily
85
Sweden's social benefit programs
provides health care anc cost people 3/4 of their salary
provide many advantages to businesses making them profitable
Provide health care and other service at no cost to people
provides health care and other services with very high tax

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