238. Refer to Table 2-5. Table 2-5 shows one set of production possibilities. Which of the following combinations of
corn and wheat is not currently attainable but would be attainable if there was an improvement in overall production
technology?
a.
1600 bushels of corn and 300 bushels of wheat
b.
1400 bushels of corn and 800 bushels of wheat
c.
1000 bushels of corn and 2000 bushels of wheat
d.
600 bushels of corn and 1800 bushels of wheat
239. Home is a country that produces two goods, pears and cellular phones. Last year, Home produced 450 bushels of
pears and 1050 cellular phones. This year it produced 450 bushels of pears and 2000 cellular phones. Given no other
information, which of the following events could explain this change?
a.
b.
c.
d.
240. Indiadesh is a country that produces two goods, textiles and computers. Last year, Indiadesh produced 50,000 textiles
and 1300 computers. This year it produced 45,000 textiles and 1100 computers. Given no further information, which of
the following events could explain this change?
a.
Indiadesh decreased unemployment.
b.
Indiadesh experienced an improvement in textile-making technology.
c.
Indiadesh experienced an improvement in computer-making technology.
d.
Indiadesh experienced a reduction in resources.
Figure 2-14
Consider the production possibilities curve for a country that can produce sweaters, apples (in bushels), or a combination
of the two
241. Refer to Figure 2-14. If this economy devotes all of its available resources to producing apples, then it will produce
a.
0 bushels of apples and 200 sweaters.
b.
80 bushels of apples and 160 sweaters
c.
180 bushels of apples and 200 sweaters.
d.
180 bushels of apples and 0 sweaters.
242. Refer to Figure 2-14. Which combination of points show production possibilities only achievable with
improvements in technology or increases in resources?
a.
Q, R, U, and V
b.
S and X
c.
T and W
d.
None of the above is correct.
243. Refer to Figure 2-14. If this society moves from point U to point V,
a.
it gives up 40 bushels of apples to get 80 sweaters.
b.
it gives up 140 bushels of apples to get 80 sweaters.
c.
it gives up 80 sweaters to get 140 bushels of apples.
d.
it gives up 80 sweaters to get 40 bushels of apples.
244. Refer to Figure 2-14. If this society is producing at point T,
a.
there is unemployment.
b.
production is efficient.
c.
growth can only be achieved through an advancement in technology.
d.
the opportunity cost of producing one more sweater is approximately 40 bushels of apples.
245. Refer to Figure 2-14. The opportunity cost of moving from point U to point R is
a.
60 bushels of apples.
b.
80 bushels of apples.
c.
80 sweaters.
d.
160 sweaters.
Figure 2-15
246. Refer to Figure 2-15. Consider the production possibilities frontier for an economy that produces only sofas and
cars. The opportunity cost of each car is
a.
the slope of the production possibilities frontier.
b.
3/2 sofas.
c.
2/3 of a sofa.
d.
Both a and b are correct.
247. Refer to Figure 2-15. Consider the production possibilities frontier for an economy that produces only sofas and
cars. When society moves from point A to point B,
a.
the opportunity cost is the same as when society moves from point B to point C.
b.
it is giving up cars to get sofas.
c.
the opportunity cost is increasing.
d.
it moves from an inefficient point to an efficient point.
248. The field of economics is traditionally divided into two broad subfields,
a.
national economics and international economics.
b.
consumer economics and producer economics.
c.
private sector economics and public sector economics.
d.
microeconomics and macroeconomics.
249. Microeconomics is the study of
a.
how money affects the economy.
b.
how individual households and firms make decisions.
c.
how government affects the economy.
d.
how the economy as a whole works.
250. Macroeconomics is the study of
a.
individual decision makers.
b.
international trade.
c.
economy-wide phenomena.
d.
markets for large products.
251. A microeconomist — as opposed to a macroeconomist — might study
a.
the effect of a national healthcare program on the nation’s unemployment rate.
b.
the effect of new regulations on production in the pulp and paper industry.
c.
the effect of changes in interest rates on gross domestic product.
d.
the growth rate of production in the economy.
252. Which of the following areas of study typifies microeconomics as opposed to macroeconomics?
a.
the impact of minimum-wage laws on employment in the fast food industry
b.
the effect of changes in household saving rates on the growth rate of national income
c.
the impact of faster money growth on the rate of inflation
d.
a comparison of alternative tax policies and their respective impacts on the rate of the nation’s economic
growth
253. Which of the following would likely be studied by a microeconomist rather than a macroeconomist?
a.
the effect of foreign direct investment on economic growth
b.
the effect of a sales tax on the cigarette industry
c.
the effect of an investment tax credit on the economy’s capital stock
d.
the effect of a war on government spending
254. A macroeconomist — as opposed to a microeconomist — might study the effect of
a.
changes in the money supply on the inflation rate.
b.
an increase in the gas tax on fuel consumption.
c.
a technological advance on the natural gas industry.
d.
a hurricane on prices in the orange industry.
255. A macroeconomist – as opposed to a microeconomist – would study
a.
the effects of rent control on housing in New York City.
b.
the effects of foreign competition on the US auto industry.
c.
the effects of borrowing by the federal government.
d.
the effects of raising the gasoline tax on transit ridership.
256. Which of the following areas of study typifies macroeconomics as opposed to microeconomics?
a.
the effects of rent control on the availability of housing in New York City
b.
the economic impact of tornadoes on cities and towns in Oklahoma
c.
how tariffs on shoes affects the shoe industry
d.
the effect on the economy of changes in the nation’s unemployment rate
257. Which of the following would likely be studied by a macroeconomist rather than a microeconomist?
a.
the effect of an increase in the alcohol tax on the market for beer
b.
the effect of foreign competition on the domestic auto industry
c.
the effect of a price war in the airline industry
d.
the effect of an increase in the minimum wage on an economy’s overall rate of unemployment
258. Which of the following statements best captures the relationship between microeconomics and macroeconomics?
a.
For the most part, microeconomists are unconcerned with macroeconomics, and macroeconomists are
unconcerned with microeconomics.
b.
Microeconomists study markets for small products, whereas macroeconomists study markets for large
products.
c.
Microeconomics and macroeconomics are distinct from one another, yet they are closely related.
d.
Microeconomics is oriented toward policy studies, whereas macroeconomics is oriented toward theoretical
studies.
Figure 2-16
259. Refer to Figure 2-16. If this economy devotes all of its resources to the production of gadgets, then it will produce
a.
0 gadgets and 100 widgets.
b.
50 gadgets and 70 widgets.
c.
100 gadgets and 0 widgets.
d.
80 gadgets and 90 widgets.
260. Refer to Figure 2-16. It is possible for this economy to produce
a.
30 gadgets and 90 widgets.
b.
50 gadgets and 80 widgets.
c.
80 gadgets and 50 widgets.
d.
90 gadgets and 30 widgets.
261. Refer to Figure 2-16. It is not possible for this economy to produce at point
a.
A.
b.
B.
c.
C.
d.
D.
262. Refer to Figure 2-16. Suppose this economy is producing at point B. Which of the following statements would best
explain this situation?
a.
The economy does not have enough resources to produce more of either product.
b.
The economy’s available technology prevents it from producing more of either product.
c.
There is widespread unemployment in the economy.
d.
The economy is getting all it can from the scarce resources available.
263. Refer to Figure 2-16. Efficient production is represented by which point(s)?
a.
B, D, E
b.
D
c.
C, B
d.
A, C
264. Refer to Figure 2-16. Inefficient production is represented by which point(s)?
a.
A, C
b.
B, C
c.
B, E
d.
D
265. Refer to Figure 2-16. The opportunity cost of obtaining 30 additional widgets by moving from point A to point C is
approximately
a.
10 gadgets.
b.
30 widgets
c.
10 gadgets and 30 widgets.
d.
0 gadgets.
266. Refer to Figure 2-16. The opportunity cost of obtaining 20 additional widgets by moving from point C to point D is
a.
0 gadgets.
b.
10 gadgets.
c.
20 gadgets.
d.
none of the above; the economy cannot move from point C to point D.
267. Refer to Figure 2-16. The opportunity cost of obtaining approximately 20 additional gadgets by moving from point
B to point C is
a.
0 widgets.
b.
10 widgets.
c.
20 widgets.
d.
none of the above; the economy cannot move from point B to point C.
268. Refer to Figure 2-16. The opportunity cost of obtaining 30 additional gadgets by moving from point B to point A is
a.
0 widgets.
b.
10 widgets.
c.
20 widgets.
d.
30 widgets.
269. Refer to Figure 2-16. The opportunity cost of obtaining approximately 10 additional gadgets by moving from point
C to point A is
a.
10 gadgets.
b.
30 widgets
c.
10 gadgets and 30 widgets.
d.
0 gadgets.
270. Refer to Figure 2-16. Which of the following statements is true about the opportunity cost of obtaining
approximately 20 additional gadgets by moving from point B to point C?
a.
The opportunity cost is the 70 gadgets that are no longer produced.
b.
The opportunity cost is zero because the economy does not give up producing widgets to go from producing at
point B to point C.
c.
The opportunity cost is greater than zero widgets but less than 70 gadgets.
d.
The opportunity cost is greater than 70 gadgets.