Economics Chapter 1d 4 Suppose that an economy is producing on its production possibilities curve

Chapter 01 – Limits, Alternatives, and Choices (+ Appendix)

158. The marginal cost curve is:

159. The output of MP3 players should be:

160. If the output of product X is such that marginal benefit equals marginal cost:

Chapter 01 – Limits, Alternatives, and Choices (+ Appendix)

161. Refer to the above diagram for athletic shoes. The optimal output of shoes is:

Chapter 01 – Limits, Alternatives, and Choices (+ Appendix)

162. Refer to the above diagram for athletic shoes. If the current output of shoes is Q1, then:

163. Refer to the above diagram for athletic shoes. If the current output of shoes is Q3, then:

164. Refer to the above diagram for athletic shoes. If the current output of shoes is Q3, then:

Chapter 01 – Limits, Alternatives, and Choices (+ Appendix)

165. Suppose that a fully-employed economy produces only two goods, hamburgers and flat-

panel TVs. If the economy is currently producing more than the optimal quantity of

hamburgers, then to attain the optimal allocation of resources it should:

166. Suppose that an economy is producing on its production possibilities curve, but is not

producing quantities of each good where the marginal benefit equals the marginal cost for

each good. This economy:

167. The optimal allocation of resources is found:

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168. Refer to the above diagram. Technological advance in producing both capital goods and

consumer goods is shown by the shift of the production possibilities curve from AB to:

Chapter 01 – Limits, Alternatives, and Choices (+ Appendix)

169. Refer to the above diagram. Technological advance that improves the ability to produce

capital goods but not consumer goods is shown by the shift of the production possibilities

curve from AB to:

170. Refer to the above diagram. Technological advance that is useful in producing consumer

goods but not in producing capital goods is shown by the shift of the production possibilities

curve from AB to:

171. The basic difference between consumer goods and capital goods is that

Chapter 01 – Limits, Alternatives, and Choices (+ Appendix)

172. Which of the following will shift the production possibilities curve to the right?

173. Other things equal, which of the following would shift an economy’s production

possibilities curve to the left?

Chapter 01 – Limits, Alternatives, and Choices (+ Appendix)

174. Refer to the above diagram. The concave shape of each production possibilities curve

indicates that:

175. Refer to the above diagram. The concept of opportunity cost is best represented by the:

176. Refer to the above diagram. Other things equal, which of the following positions relative

to PP1 would be the most likely to result in a future production possibilities curve of PP3,

rather than PP2?

Chapter 01 – Limits, Alternatives, and Choices (+ Appendix)

177. Refer to the above diagram. An improvement in technology will:

178. Refer to the above diagram. Which one of the following would shift the production

possibilities curve from PP1 to PP2?

179. Which of the following statements, if any, is correct for a nation that is producing only

consumer and capital goods?

Chapter 01 – Limits, Alternatives, and Choices (+ Appendix)

180. All of the following could immediately or eventually lead to an inward shift of a nation’s

production possibilities curve, except:

181. A nation’s production possibilities curve might shift to the left (inward) as a result of:

182. Which of the following will enable a nation to obtain a combination of consumer goods

and capital goods outside its production possibilities curve?

Chapter 01 – Limits, Alternatives, and Choices (+ Appendix)

183. Suppose that Scoobania, which has full employment, can obtain 1 unit of capital goods

by sacrificing 2 units of consumer goods domestically, but can obtain 1 unit of capital goods

from another country by trading 1 unit of consumer goods for it. This reality illustrates:

184. Through specialization and international trade a nation:

185. Some agricultural sub-Saharan nations of Africa have overfarmed and overgrazed their

land to the extent that significant portions of it have turned into desert. This suggests that:

Chapter 01 – Limits, Alternatives, and Choices (+ Appendix)

186. If all discrimination in the United States were eliminated, the economy would:

187. A country can achieve some combination of goods outside its production possibilities

curve by:

188. In recent years the economy of Japan has grown, despite the fact that the population of

Japan has declined. Which of the following would best explain Japan’s economic growth

despite having a smaller population?

Chapter 01 – Limits, Alternatives, and Choices (+ Appendix)

189. (Consider This) Free products offered by firms:

190. (Consider This) The assertion by economists that “there is no free lunch”:

191. (Consider This) The economic perspective used in customer decision making at fast-food

restaurants is reflected in:

Chapter 01 – Limits, Alternatives, and Choices (+ Appendix)

192. (Consider This) At fast-food restaurants:

193. (Consider This) Consumers might leave a fast-food restaurant without being served

because:

194. (Consider This) A direct cost of going to college is:

Chapter 01 – Limits, Alternatives, and Choices (+ Appendix)

195. (Consider This) An exception to the advice “go to college, stay in college, and earn a

degree” occurs when:

196. (Consider This) Refer to the above diagram. The direct economic impact of the

destruction and loss of lives caused by the terrorist attacks of September 11, 2001 is

illustrated by the:

Chapter 01 – Limits, Alternatives, and Choices (+ Appendix)

197. (Consider This) Refer to the above diagram. The U.S. response to the events of

September 11, 2001, is illustrated by the:

198. (Consider This) Refer to the above diagram. Suppose that point y represents the optimal

combination of civilian goods and defense goods. We can conclude that at y the marginal

benefit of defense goods:

199. (Consider This) In response to the terrorist attacks of September 11, 2001, the

government decided to allocate more resources toward defense goods. The government’s

decision reflects their assessment that:

Chapter 01 – Limits, Alternatives, and Choices (+ Appendix)

200. (Last Word) The fallacy of composition states that:

201. (Last Word) The “after this, therefore because of this” fallacy states that:

202. (Last Word) The safest way for an individual to leave a burning theater is to run for the

nearest exit; it is therefore also the best means of escape for a large audience. This assertion

illustrates the:

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203. (Last Word) The post hoc, ergo propter hoc fallacy suggests that:

204. (Last Word) Which of the following has to do with the problem of distinguishing cause

and effect in economic reasoning?

205. (Last Word) Which of the following best illustrates the post hoc, ergo propter hoc

fallacy?

Chapter 01 – Limits, Alternatives, and Choices (+ Appendix)

206. (Last Word) The fallacy of composition is essentially the error of:

207. (Last Word) The post hoc fallacy and the correlation problem both relate to:

208. (Last Word) If variables X and Y are positively correlated, this means that:

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209. (Last Word) “The government deregulated the electricity industry in California and a

shortage of electricity soon occurred. It is clear that the deregulation caused the shortage.”

This statement needs careful analysis because it may reflect the:

210. (Last Word) A caller to a radio talk show states that oil companies are “greedy price

gougers.” This is an example of:

211. (Last Word) A caller to a radio talk show states that protesters against globalization are a

collection of “anarchist punks, naïve college students, and trade union radicals.” This is an

example of: