ECON 2301 Week 1 Quiz

ECON 2301 Week 1 Quiz | Assignment Help | Central Texas College

•             Question 1

                Fundamentally, economics deals with                                   

Answers:             a.

Money.

                b.

Poverty.

                 c.

Scarcity.

                d.

Banking.

•             Question 2

                What term refers to the idea that society has limited resources and therefore cannot produce all the goods and services people wish to have?                                  

Answers:             a.

scarcity

                b.

market failure

                c.

inefficiency

                d.

inequality

•             Question 3

                Which of the following is an important cause of inflation in an economy?                                             

Answers:             a.

growth in the quantity of money in the economy

                b.

lack of property rights in the economy

                c.

increases in productivity in the economy

                d.

the influence of positive externalities on the economy

•             Question 4

                Laws that restrict the smoking of cigarettes in public places are examples of government intervention that is intended to reduce                                        

Answers:             a.

Efficiency.

                b.

Productivity.

                c.

Equality.

                 d.

Externalities.

•             Question 5

                College-age athletes who drop out of college to play professional sports                                              

Answers:             a.

Are well aware that their opportunity cost of attending college is very high.

                b.

Underestimate the value of a college education.

                c.

Are not rational decision makers.

                d.

Are concerned more about present circumstances than their future.

•             Question 6

                Assume for the United States that the opportunity cost of each airplane is 50 cars. Which of these pairs of points could be on the United States' production possibilities frontier?                                               

Answers:             a.

(300 airplanes, 25,000 cars) and (200 airplanes, 40,000 cars)

                 b.

(200 airplanes, 12,500 cars) and (150 airplanes, 15,000 cars)

                c.

(200 airplanes, 5,000 cars) and (150 airplanes, 4,000 cars)

                d.

(300 airplanes, 15,000 cars) and (200 airplanes, 25,000 cars)

•             Question 7

                Figure 3-10

Alice and Betty’s Production Possibilities in one 8-hour day.

Alice’s Production Possibilities Frontier  Betty’s Production Possibilities Frontier

Refer to Figure 3-10. If point A represents Alice’s production and point B represents Betty’s production,                                              

Answers:             a.

Only Alice can benefit from specialization and trade.

                 b.

Alice produces 200 pitchers of lemonade and 100 pizzas while Betty produces 180 pitchers of lemonade and 180 pizzas.

                c.

Alice produces 180 pitchers of lemonade and 180 pizzas while Betty produces 200 pitchers of lemonade and 100 pizzas.

                d.

Alice produces 100 pitchers of lemonade and 200 pizzas while Betty produces 180 pitchers of lemonade and 180 pizzas.

•             Question 8

                A production possibilities frontier is bowed outward when                                         

Answers:             a.

the rate of trade-off between the two goods being produced depends on how much of each good is being produced.

                b.

the rate of trade-off between the two goods being produced is constant.

                c.

the more resources the economy uses to produce one good, the fewer resources it has available to produce the other good.

                d.

an economy is self-sufficient instead of interdependent and engaged in trade.

•             Question 9

                Suppose the U.S. and Japan can both produce airplanes and televisions and the U.S. has a comparative advantage in the production of airplanes while Japan has a comparative advantage in the production of televisions. Also suppose the U.S. has an absolute advantage in the production of both airplanes and televisions. The U.S. should                                       

Export airplanes to Japan and import televisions from Japan.

Answers:             a.

Not trade airplanes or televisions with Japan.

                 b.

Export airplanes to Japan and import televisions from Japan.

                c.

Import airplanes from Japan and export televisions to Japan.

                d.

Export both airplanes and televisions to Japan.

•             Question 10

                A country that currently does not trade with other countries could benefit by                                   

                 a.

Not restricting trade.

                b.

Restricting both imports and exports.

                c.

Promoting imports and restricting exports.

                d.

Restricting imports and promoting exports.