Chapter 2 Exam †Scarcity and the World of Trade Essay

CHAPTER 2 Exam scarceness and the World of Trade saturninesMULTIPLE CHOICE. Choose the unrivaledness secondary that vanquish completes the statement or answers the question.1)As a student of sparingals, when you speak of scarcity, you atomic number 18 referring to A)the susceptibility of guild to employ on the whole(prenominal) of its resources.B) the might of wholeiance to consume all that it larns.C)the inability of society to satisfy all human beings wants beca function of limited resources. D)the ability of society to continually shop technological breakthroughs and add-on yield.2)Which of the adjacent statements is faux?A)As society increases its wealth, the difficulty of scarcity disappears. B)The factors of action ar apply to do knocked out(p) founds that help society satisfy its wants. C)Even though a society faces the problem of scarcity, it does not necessarily suffer from poverty. D)Land and repel atomic number 18 both(prenominal) factors of exertion.3)The problem of economic scarcity appliesA) precisely in industrially developed countries be take in resources argon scarce. B) solitary(prenominal) in underdeveloped countries because there be no creative resources. C) that if in economic systems that be just beginning to develop because specialize resources ar scarce.D)to all economic systems, regardless of their train of development.4)In every economic system, choices moldiness be made because resources A) atomic number 18 unlimited, tho human desires and wants argon limited.B)are limited, only human desires and wants are unlimited.C)are unlimited, and so are human desires and wants.D)are limited, and so are human desires and wants.5)The fortune court of going to college might outperform be described as A)the money that must(prenominal) be pay in order to attend college.B)the lowest protectd alternative use of the students time. C)the highestvalued alternative use of the students time. D)the value tha t the student attaches to not working.6)In the return of favorables and function, addressoffs exist because A)not all yield is streamlined.B)society has only a limited quantity of productive resources. C)buyers and sellers frequently must negotiate prices.D)human wants and needs are limited at a fragmentiseicular station in time.7)Look at the following output possibilities dodge for drill presses and give. The table shows the maximal combination of drills and amends of edible corn that whoremaster be conveyd when all resources are fully employed.Drill Presses1020304050Corn (bushels)15014012090500Based on the above information,A)there is a constant tradeoff betwixt corn and drill presses. B)the luck address of producing 30 drill presses instead of 20 drills is 120 bushels of corn. C)the luck comprise of producing 40 drill presses instead of 30 drills is 30 bushels of corn. D)the output possibilities switch off for drill presses and corn go forth be a true line. 8)The takings possibilities snub representsA)the upper limit quantity of press and neat available to society. B)combinations of ripes and services among which consumers are indifferent. C)the maximum combination of goods and services that flush toilet be unwrapd with intractable resources and applied science, presumptuousness efficient use of the resources. D)the maximum rate of increase of capital and labor in a acres.9)Which of the following would result in a bm along the takings possibilities flexure? A)a fall in the unemployment rateB)growth in the capital stockC)population growthD)a change in the composition of cardinal goods that a society accepts to give10)One of the assumptions underlying the toil possibilities twist around is that A) at least one of the factors of output signal is a lax good. B)the quantity of the resources available for the occupation of economic goods is fix over a given time period. C)there is at least one factor of occupation t hat is employed ineffectively. D)some of the factors of production are not being use.11)Which of the following statements is NOT an assumption underlying the production possibilities squirm? A)Resources are fully and efficiently employed.B)Technology is fixed.C)Production occurs over some specified time period.D)The mensuration of resources available for production can be changed quickly.12)If a production possibilities contract for paroles and magazines is straight, then A)the fortune terms of increase book production the Great Compromiser constant regardless of the fall quantity throwd. B)the opportunity embody of increase book production continues to decline as total production increases. C)the opportunity cost of change magnitude book production continues to increase as total production increases. D)the opportunity cost of increase book production is egotism-governing of the shape of the arc.pic13)Inthe encipher above, block DA)is less efficient than spot C.B) is to a greater extent efficient than stay A. C)is less efficient than point B.D) is to a greater extent than efficient than point B.14)In the figure above, point E could be obtained ifA) resources were shifted from teaching to healthcare.B)resources were used more(prenominal) efficiently.C)there was an increase in societys resources.D)resources were shifted from healthcare to education.15)In the figure above, the opportunity cost of moving from point B to point C A) is the loss in production in the healthcare sector.B)is the increase in production in the education sector.C)is zero.D)is the loss in production in the education sector.16)In the figure above, Point A is un preferred becauseA)there is an wasteful use of resources.B) in like manner much healthcare is being produced.C)the opportunity costs of health care are too high.D)point E is a more virtual(prenominal) option in this economy. accede 0201APossibilityGood ABCDEFGTelevision 212018151160 in the flesh(predicate) computers012345617)When the economy moves from point D to E in Table 0201A, the opportunity cost of the computer in terms of televisions is A)3.B) 4.C) 2.D) 5.18)According to Table 0201A, the opportunity cost of each additional computer in terms of televisions A)remains constant.B)falls as more computers are produced.C)increases as more computers are produced.D)is meaningless because the cost of computers cannot be expressed in terms of televisions.19)Given the production possibilities schedule in Table 0201A, a combination of nine televisions and four psychealised computers A)is attainable just now involves an inefficient use of societies resources. B)would be attainable only if a newly technology of producing televisions or computers were introduced. C)is not attainable because it is not listed in the schedule. D)is not attainable because society does not get under ones skin enough resources toproduce this combination.20)Given the production possibilities schedule in Table 0 201A, a combination of 23 televisions and 6 personal computers A)is attainable but involves the unemployment of some of societies resources. B) clearly illustrates the tradeoff between televisions and computers. C)cannot be produced by society, given its current level of resources and production technology. D)can be produced only if society is allow foringing to allow some of its resources used inefficiently.21)If an economy is operating at a point inner the production possibilities curve, then A)societys resources are being inefficiently utilized.B)the curve will move to the left.C)societys resources are being used to produce too many consumer goods. D)economic policy must retard further growth of the economy.22)A movement along the production possibilities curve would imply that A) the labor force has grown.B)productivity has increased.C)society has chosen a different set of outputs.D)productivity has declined because workers are demanding more leisure.23)Which of the followi ng would cause an economy to be producing at a point inside its production possibilities curve? A)the efficient allocation of all factors of productionB)population growthC)unemployment and an inefficient use of available resources D)capital accumulation24)A straight line production possibilities curve takes this shape because A) the opportunity cost of producing a good is constant. B)the opportunity cost of producing more of a good is fall. C)resources are better suited for producing one output than an new(prenominal). D)resources are fixed.pic25)In the figure above, the combination of computers and televisions shown by point X A) is not attainable at the point in time for which the chart is drawn. B)can be attained only if some of societies resources are unemployed. C)suggests that the law of increasing recounting costs does not hold. D)results only because society allocates its resources inefficiently.26)The combination of personal computers and televisions shown in the figure above by point W A)is an efficient use of societys resources because it is below the production possibilities curve. B)is more desirable than point X because producing at point W does not put a strain on societys resources. C)is attainable but involves the inefficient use of some of societys resources. D)is beyond the subject of society to produce.27)Which of the following statements about movement along the production possibilities curve in the figure above is FALSE?A)An additional computer can be produced only if fewer televisions are produced. B)The tradeoff between computers and televisions is not constant. C)Society cannot establish more of both goods at the same time.D)There are no opportunity costs involved in choosing one point on the curve over all early(a)wise points.28)In the figure above, points U, V. Y, and Z showA)an inefficient allocation of societies scarce resources.B)possible combinations of televisions and personal computers. C)a constant tradeoff between tele visions and personal computers. D)society prefers more televisions than computers.29)A President of the United States promises to at the same time produce more defense goods without any decreases in the production of other goods. Under which of the following conditions could such a promise be sound? A)if the U.S. were producing at a point on its production possibilities curve B)if the U.S. were producing inside its production possibilities curve C)if the U.S. were producing to the right of its production possibilities curveD)none of the above the production possibilities curve must shift to the right30)If opportunity costs are constant, thenA)the production possibilities curve does not exist.B)the production possibilities curve bows outward.C)the production possibilities curve is a straight line.D)factors of production must not be fully employed.31)The production possibilities curve bows outward becauseA)opportunity costs are decreasing as the production of a good increases. B)opp ortunity costs are increasing as the production of a good increases. C)opportunity costs are fixed as the production of a good increases. D)resources are of uniform quality.32)One display case of factor of production is physical capital. All of the following are examples ofphysical capital EXCEPT A)buildings B) machineryC)AM/FM radiosD) a hydroelectric power plant33)A country that must reduce current inlet to increase future day consumption possibilities A)must be allocating resources inefficiently.B)must be producing along the production possibilities curve. C)must be producing outside the production possibilities curve. D)must not have private ownership of property.34)Which of the following statements about economic scarcity is FALSE? A)Scarcity occurs among the poor and the rich.B)Scarcity only occurs if there are shortages and battalion waiting in line to buy things. C)Scarcity results from not having enough resources to produce all the things we want. D)Scarcity results in the necessity to make choices.35)Which of the following statements is FALSE?A)Economic goods are available in desired quantities at a zero price. B)A good is anything that gives satisfaction or happiness to individuals.C)Services are intangible goods such as dry cleaning, hospital care, and restaurant meal preparation. D)Wants are unlimited and implicate all material and nonmaterial desires.36)Ineconomic terminology, when a resource is used to produce output it is referred to as A)an intangible.B) a factor of production.C)a service. D) a fifth element.37)Opportunity cost is be asA)the value of the nighbest alternative that must be sacrificed to attain a want. B)the leastcost means to produce output.C)the value of the output currently received by an individual or a corporation. D)the return from a given unit of labor.38)One opportunity cost associated with going to college is A) purchasing text books.B)paying tuition.C)giving up employment possibilities composition in college.D)p aying for room, board, and other living expenses.39)A production possibilities curve with clothing and food on the axes shows that I. A society can not have an unlimited amount of each goodII.For an efficient society, an increase in clothing production will necessitate a decrease in food production III. A society will always produce the maximum amount of both clothing and foodA) I onlyB) II onlyC) III onlyD) twain I and II40)A straightline production possibilities curve hasA)an increasing opportunity cost between the two goods.B)a decreasing opportunity cost between the two goods.C)a constant opportunity cost between the two goods.D)no opportunity cost between the two goods.41)A point outside a societys production possibilities curve is one whichis A) unattainable given the resources of the society.B)technologically inefficient.C)undesirable given the implied underemployment of resources. D)desirable since it satisfies the desires of the population.42)A point inside a societys prod uction possibilities curve represents A)an unattainable combination of outputs.B)an output combination which satisfies the needs of the population. C)an underutilization of productive resources.D)a technically superior output combination.43)It is correct to state that a society which is on its production possibilities curve is A) underutilizing is resources.B)technologically inefficient.C)consuming too much output.D)fully utilizing its productive resources.44)Technology is defined asA)the maximum output which can be attained from a stock of physical capital. B)societys pool of applied knowledge concerning the production of goods and services. C)output beyond the production possibilities boundary.D)the utilization of the most advanced machinery.45)Efficiency can correctly be defined asA)producing outside the production possibilities boundary.B)minimizing opportunity cost.C)producing the maximum output with given technology and resources. D)providing for the immediate needs of the gr eatest equaliser of the population.46)The law of increasing opportunity cost implies thatA)producing additional units of one good results in proportionately smaller reductions in output of the other good. B)producing additional units of one good results in increasing amounts of lost output of the other good. C)theproduction possibilities curve will be a straight line. D)the society will be producing on its production possibilities curve.47)A bowed production possibilities curve is consistent with A) an unchanged opportunity cost.B)a technologically inefficient society.C)the underutilization of productive resources.D)highly specialized resources.48)A bowed outward production possibilities curve occurs when A)opportunity costs are constant.B) resources are not scarce.C)additional units of output of one good necessitate increased reductions in the other good. D)the society is operating on the production possibilities curve.49)Comparative value implies choosing that occupation which A)has a high opportunity cost.B)is inside the production possibilities frontier.C)has the lowest opportunity cost.D)does not demand any specialization.50)If individual X has comparative advantage in rougeing and individual Y has comparative advantage in carpentry, then A)individual X must use fewer hours to paint a fence than individual Y. B)individual Y will specialize in painting.C)there is a get opportunity cost (expressed in units of carpentry) for individual X to paint than for individual Y to paint. D)specialization will not occur, since each does not have a clear domineering advantage.51)Which of the following statements about scarcity is true up? A)Scarcity is no longer a problem for industrialized countries. B)Scarcity exists in all societies.C)Scarcity is a problem only for greedy people.D)Scarcity is a problem only in countries that do not use markets to organize economic activity.52)In 1992 hurricanes discredited parts of Florida, Louisiana, and Hawaii, destroying ho mes, businesses, schools, and infrastructure. In strictly economic terminology, these hurricanes are said to have caused A)scarcity, because the damages made food and shelter scarce. B)scarcity, because some goods were difficult to get.C)shortages, because supplies were caterpillar track off and goods were destroyed. D)absolute advantages, because some ambits of the country were damaged when others were not.53)The difference between scarcity and a shortage isA)scarcity is caused by poverty and shortages are caused by innate disasters. B)shortages are a type of scarcity caused by natural disasters while scarcity is caused by human errors. C)scarcity always is a part of human life while shortages usually are temporary. D)shortages are always part of human life while scarcity is usually temporary.54)Human resources that perform the functions of organizing, managing, and set up the other factors of production are called A)physical capital.B) venture capital.C)entrepreneurship.D) pro ductive capital.55)Services can be thought of asA)unvalued goods.B) unwanted goods.C)free goods. D) intangible goods.56)Scarcity implies that people mustA)be miserable.B) be selfish.C) make choices.D) not be selfish.57)Opportunity cost isA)the intrinsic value of an economic good.B)the total value of all the alternatives forsaken when a choice is made.C)the value of the opportunity selected when a need is satisfied. D)the value of the neighboring highestranked alternative that must be sacrificed to obtain a want.58)Suppose you have four choicesgo to a movie, read a book, watch television, or go to a concert. You choose to go to a movie. The opportunity cost of the movie is A)the value of the book not read.B)the value of the television program not watched.C)the value of the concert that you didnt attend.D)the value of the activity that you would have selected if you hadnt gone to the movie.59)Fred and Ann both decide to see the same movie when they are given free tickets to the movie . We know that A)both bear an opportunity cost since they could have done other things instead of see the movie. B)both bear the same opportunity cost since they are doing the same thing. C)the cost of going to the movie is greater for the one who had more choices to do other things. D)neither bear an opportunity cost because the tickets were free.60)Opportunity costs areA)objective because they can always be put in fiscal terms. B)objective because particular(prenominal) things are given up when making a choice. C)subjective because each person decides the value of the foregone alternative. D)subjective because it is impossible to put a monetary value on foregone alternatives.61)Bill Bonecrusher graduates from college with a choice of playing professional football at $2 gazillion a year or coaching for $50,000 a year. He decides to play football, but eight years posterior he quits football to make movies for $3 million a year. His opportunity cost at graduation was and eight y ears later(prenominal) wasA)$50,000 $2 millionB) $2 million $2 millionC)$2 million $3 millionD) $50,000 $50,000pic62)A granger has 200 acres of vote out on which he can grow soybeans or corn. An acre of land yields 200 bushels of soybeans or 100bushels of corn. The figure above refers to the farmers A)production possibilities curve.B) substitution options curve. C)tradeoffs curve. D) opportunity cost curve,63)If the farmer is producing 5000 bushels of soybeans at point B in the figure above, we know that A)the farmer is not apply his resources efficiently.B)the farmer is victimisation his land to produce a crop other than soybeans or corn. C) the farmer must be using more land than was used in constructing theproduction possibilities curve.D)the farmer is using his resources efficiently.64)In the figure above, how many units of corn are produced at point a?A)2000B)2500C)3000D)We cant tell without more information65)A point outside a production possibilities curve indicates A)t hat resources are not being used efficiently.B)an output combination that society cannot attain given its current level of resources and technology. C)that resources are being used very efficiently.D)that both goods are characterized by increasing costs.pic66)In the figure above, which of the following points indicates theefficient use of resources? A) a B)f C)g D) h67)The shape of the production possibilities curve in the figure above indicates that A)production of corn is characterized by increasing costs while the production of cloth is characterized by decreasing costs. B)production of both corn and cloth is characterized by increasing costs. C)production of both corn and cloth is characterized by constant costs. D) production of corn is characterized by constant costs and the production of cloth is characterized by increasing costs.68)Between points b and c in the figure above, the opportunity cost of another bushel ofcorn isA)1 yard of cloth. B) 1.25 yards of cloth.C)1.5 yards of cloth.D) 2.5 yards of cloth.69)Which of the following would NOT allow society to move to point h in the figure above? A)an improvement in technologyB)more efficient use of resources of current resourcesC)an increase in quantity of laborD)an increase in quantity of capital70)The law of increasing relative costs is due toA)taxes.B)scarcity.C)the fact that it is more difficult to use resources efficiently the more society produces. D)the fact that resources not are perfectly all-mains(prenominal) for alternative uses.71)If a countrys production possibilities curve gets more bowed out over time, it is an indication that A)technological change has taken place.B)society is encyclopedism to use its resources more efficiently. C)the quantity of labor and capital have increased.D)resources have become more highly specialized.72)If all resources were perfectly adaptable for alternative uses, the production possibilities curve would A)be bowed out. B) be bowed in.C)be a straight line.D) not exist.73)Economic growth can be pictured in a production possibilities curve diagram by A)making the production possibilities curve more bowed out. B)making the production possibilities curve less bowed out. C)shifting the production possibilities curve out.D)shifting the production possibilities curve in.74)The opportunity cost of more capital goods immediately isA) fewer capital goods in the future.B)fewer consumer goods in the future.C)fewer consumer goods right away.D)more unemployed resources in the future.75)Suppose an acre of land yields 100 bushels of corn and that one bushel of corn provides enough set out for one-quarter of an acre of land. The opportunity cost of consuming another bushel of corn today isA)100 bushels of corn next year.B) 25 bushels of corn next year. C)10 bushels of corn next year. D) 2.5 bushels of corn next year.76)Whenever a society forgoes current consumption to arrange in capital goods, A) the less the society can consume next year.B)the easi er it will be for the society to consume less in the future because people will become accustomed to less.C)the more the society can consume in the future.D)the less capital the society can produce in the future.77)Generally, specialization leads toA)constant opportunity costs.B)greater productivity.C)the production of fewer capital goods.D)greater selfreliance.78)A person has a comparative advantage in an activity whenever she A) has an absolute advantage in the activity.B)can perform the activity at a lower opportunity cost than can another person. C)can do the activity in less time than anyone else.D)can do everything better than anyone else.79)Comparative advantage is always a(n)concept.A)absoluteB) efficiencyC) relativeD) monetary80)If you can make $20,000 a year teaching, $25,000 a year typing, $30,000 a year driving a cab, and $40,000 a year as a chef, you have a comparative advantage in A)teaching.B)driving a cab.C)being a chef.D)one of them but we need more information to k now which.81)Division of labor refers toA)dividing tasks up into several subtasks and having one person perform these subtasks in a trusted order. B)the separation of hourly workers from salaried workers.C)assigning different workers to different tasks.D)separating union workers from open(prenominal) workers.82)Division of labor increases the output of society byA)eliminating scarcity.B)reducing the choices people have to make to a more manageable number. C) ensuring that people are happier in acting their work. D)allowing resources to specialize in the tasks for which they have a comparative advantage.83)Which of the following are considered factors of production? I.LandII.LaborIII.Physical capitalIV.EntrepreneurshipA)I and II only B) I and III onlyC)I, II and III onlyD) I, II, III and IV84)In economic terminology, the accumulated educate and education that workers receive that increases their productivity is referred to as A)entrepreneurship.B) human capital.C)labor. D) physic al capital.85)The division of productive activities among persons and regions so that no one individual or area is totally selfsufficient is known asA)advantage-taking.B) comparative value.C)specialization.D) outsourcing.86)Assume that miserliness A and thrift B have the same resources, but that individuals in Economy A have specialized whereas individuals in Economy B have not. Given this information, you can determine that A)Economy A will have a higher output than Economy B.B)Economy A will have a lower output than Economy B.C)Economy A and Economy B will have identical outputs.D)individuals in Economy A will have lower incomes than individuals in Economy87)When nations specialize in their areas of comparative advantage and then trade with the rest of the human race, the result is that A)the median(a) standard of living in the world will go down. B) the comely standard of living in the world will go up. C)the world will move from a point on the production possibilities curv e to a point inside the curve. D)worldwide economic efficiency will decrease.