PrQ1: Practice Quiz - Ch. 1: Foundation of Economics
Quesiton 1
The study of decision-making under conditions of scarcity is called:
A. positive.
B. normative.
C. economics.
D. ceteris paribus
Answer
C. economics.Quesiton 2
What is an economy?
A. the coordination of a buyer of a good and a seller of a good.
B. a banking system.
C. the movement of goods and services between countries.
D. a system for coordinating the production and distribution of goods and services.
Answer
D. a system for coordinating the production and distribution of goods and services.Question 3
What model is used by economists to illustrate efficient combinations of the production of two goods within an economy?
A. the market model
B. cost curves
C. the production possibilities frontier (PPF)
D. maps
Answer
C. the production possibilities frontier (PPF)Question 4
An increase in the resources available to this economy is shown by a movement from:
Figure: The Production Possibilities Frontier III
A. point I to point L.
B. point J to point H.
C. point I to point K.
D. point J to point I.
Answer
A. point I to point L.Question 5
Oliver’s lumberyard is deciding whether to produce more sheets of plywood or more hardwood flooring. Which of the three fundamental economic questions is it trying to answer?
A. How to produce.
B. Whether production is efficient.
C. What to produce.
D. For whom to produce.
Answer
C. What to produce.Question 6
The values of different crops that Galena can grow on her farm are given in the table. What is Galena’s opportunity cost of growing radishes?
Table: Galena’s Value of Farm Production
| Option | Value |
|---|---|
| Radishes | \$1,000 |
| Onions | \$800 |
| Carrots | \$400 |
| Beets | \$100 |
A. \$2,300
B. \$800
C. \$1,000
D. \$1,300
Answer
B. \$800Question 7
A policy maker is faced with a dilemma: she can use tax dollars to build either a bridge or a new high school. Which of the following is the opportunity cost of the high school?
A. the value that people place on the high school.
B. the value that people place on the bridge.
C. the cost of construction of the bridge.
D. the cost of construction of the high school.
Answer
B. the value that people place on the bridge.Question 8
An economy that wants to produce an efficient combination of goods would NOT choose the combination of goods represented by point:
Figure: The Production Possibilities Frontier II
A. R
B. S
C. V
D. T
Answer
B. SQustion 9
What is true about the opportunity cost of ukuleles as you move from left to right across this table?
A. The opportunity cost of ukuleles increases.
B. The opportunity cost of ukuleles decreases.
C. The opportunity cost of ukuleles first increases and then decreases.
D. The opportunity cost of ukuleles is constant.
Answer
D. The opportunity cost of ukuleles is constant.Question 10
If the economy depicted in the graph is currently producing a combination of output represented by point F, what is the opportunity cost of producing three more lamps?
Figure: The Production Possibilities Frontier I
A. two televisions
B. six televisions
C. zero televisions
D. three televisions