Topic Test Answers

A production possibilities frontier represents the different choices or trade-offs a society faces.

An efficient economy is one that a. has very few people who do not work for a living. b. makes the best use of some its goods and services. c. uses its resources to make the most goods and services. d. makes the least costly use of its resources. Please select the best answer from the choices provided

Which of the following is the kind of decision that can be made at the margin?a.whether or not to hire new workersb.whether or not to go on a vacationc.whether or not to build an extra room on a homed.whether to have a dog or a cat as a pet

“Choosing is Refusing” means individuals face an opportunity cost with each decision they make.

When you are thinking on the margin, the factor that should most influence your decision is most closely described by which of the following terms _________ a. marginal cost b. opportunity cost c. the “guns or butter” theory d. marginal opportunity benefits Please select the best answer from the choices provided

One example of thinking at the margin isa.determining whether it is better to spend your savings on a new CD player or on a television.b.deciding whether the benefit of working two extra hours per day is worth the sacrifice of study time.c.putting all of your money in a savings account because the interest rates are so high.d.deciding to buy a car you don’t really like because it is significantly less expensive than the one you want.

A person has a choice between an apple or an orange. The person chooses the apple. What is the opportunity cost of choosing the apple? a.There is no opportunity cost.c.The utility of the apple. b.The value of what was not chosen.d.The scarcity of oranges.

The government of a country must make a decision between spending money on a hospital or spending the same amount on border security. What kind of decision is this?a.guns or butterc.global trade-offb.decision at the margind.production efficiency decision

Economists use graphs to analyze the choices and trade-offs that people make in a society.

The production-possibilities frontier separates outcomes that are possible for an individual (or a group) to produce from those which_______.a.are scarce.c.cannot be produced.b.have utility.d.are efficient.

When deciding between two alternatives, an individual considers___________.a.being at the marginc.the"guns and butter" ratiob.the scarcity of production of the alternativesd.the sacrifice involved with choosing one over the other

A legislative committee is weighing the pros and cons of a clean-air program. If it spends $1 million on the program, the air will be cleaner by 20 percent. If it spends $2 million, the air will be cleaner by 30 percent. If it spends $3 million, the air will be cleaner by 35 percent. After comparing opportunity costs and benefits at the margin, the committee agrees to fund the program with $2 million. Why did it not choose to appropriate $3 million?a.At $3 million, the air is not improved as much as the committee would like.b.At $3 million, the costs are no longer worth the benefits.c.It was too much to spend without a guarantee.d.The air is improved by the same amount whether $2 million or $3 million is spent.

As displayed on a production possibilities curve, what will an increase in technology allow a society to do? a. Produce more, as long as the resources are also available. c. It will not affect society’s production. b. Produce less, because more resources are spent on developing technology. d. The society will spend more on the same level of production. Please select the best answer from the choices provided

A nation’s automakers install new robotic machinery to build cars. Now, cars take only a day to make, and the factories can produce many more cars than before. This is an example of growth caused bya.land and natural resources.c.technology.b.human capital.d.production possibility curves.

By the end of the summer, Jason had saved enough money for college from his job as a waiter. He even had some money left over. Although he wanted both, he decided to buy a DVD player rather than a digital camera. Which of the following is the opportunity cost in this scenario?a.the DVD playerc.collegeb.the digital camerad.the job

What does a production possibilities frontier show?a.scarce and less scarce resourcesb.global trade-offs and costs of doing businessc.an economy that is producing but not at the maximumd.the maximum amount that an economy can produce

Opportunity cost is the least desirable alternative given up as a result of a decision.

The opportunity cost of a decision can be examined by using aa.production possibilities graph.c.global trade-off grid.b.factors of production chart.d.graph of increasing costs.

According to the “guns or butter” example, if a country decides to spend more on military goods, which of the following will happen? a. The country will have less money to devote to consumer goods. b. The country will have an equal amount of money to devote to consumer goods. c. The country will be forced to make trade-offs in military purchasing. d. The country will have more resources to devote to consumer goods. Please select the best answer from the choices provided

Please select the word from the list that best fits the definition