ECON 101 Chapter 1-12: Econ 101 Chapter 1-12 vocab.docx

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Resources used to produce goods and services; frequently divided into basic categories of land, labor, and capital. Tangible commodities, such as cars or shoes. Intangible commodities such as haircuts or medical care. The act of making goods or services. The act of using goods or services to satisfy wants. The cost of using resources for a certain purpose, measured by the benefit given up by using them in their best alternative use. A curve showing which alternative combinations of commodities can just be attained if all available resources are used efficiently; it is the boundary between attainable and unattainable output combinations. The allocation of an economy"s scares resources among alternative uses. The study of the causes and consequences of the allocation of resources as it is affected by the working the price system. The study of the determination of economic aggregates such as total output, the price level, employment, and growth.

Related Questions

A bowed out PPF reflects which of the following ideas?

i.increasing opportunity cost

ii. resources are not equally productive in all activities

iii. prices of goods increase over time

		I only
		I and iii
		ii and iii
		I and ii

1 point

QUESTION 2

With no international trade, a country ________ consume at a point outside of its PPF; with international trade, a country ________ consume at a point outside of its PPF.

		can; cannot
		cannot; can
		cannot; cannot
		can; can

1 point

QUESTION 3

If the production possibilities frontier between two goods is a straight line, then the

		the line does not qualify as a production possibilities frontier because the unattainable production points are too close to the inefficient production points.
		opportunity cost is not a ratio.
		increasing opportunity costs.
		resources are equally productive in both goods.

1 point

QUESTION 4

As an economy produces more of one of the goods on a bowed out production possibilities frontier, what happens to the opportunity cost of producing the good?

		It might increase, decrease, or remain constant depending on how much people value the additional units of the good.
		It decreases.
		It increases.
		It remains constant.

1 point

QUESTION 5

"Comparative advantage" is defined as a situation in which one person can produce

		more of a good than another person.
		a good for a lower dollar cost than another person.
		a good for a lower opportunity cost than another person.
		more of all goods than another person.

1 point

QUESTION 6

When a production possibilities frontier is bowed outward, as more of one good is produced, its opportunity cost

		increases.
		decreases.
		might increase, decrease, or remain constant depending on how much people value the additional units of the good.
		remains constant.

1 point

QUESTION 7

A bowed out production possibility frontier shows that the

		opportunity cost relationship is linear.
		the opportunity cost of a good is constant as more of the good is produced.
		the opportunity cost of a good increase as more of the good is produced.
		the opportunity cost of a good decrease as more of the good is produced.

1 point

QUESTION 8

Which of the following statements is correct?

		The production possibilities frontier shows that there are no limits to production.
		Any point on or within the PPF is production efficient.
		If capital is idle, the economy is producing at its full potential.
		A tradeoff is a limit that forces an exchange or a substitution of one thing for something else.

1 point

QUESTION 9

A major earthquake occurs in the central part of the United States. What impact would this have on the nation's production possibilities frontier and why?

		A tradeoff would occur to replace the resources and goods destroyed.
		It would shift inward because some of the nation's resources, such as capital and labor, would be destroyed.
		It would shift outward because unemployment would be reduced.
		Nothing would happen because the nation would still have the same capabilities.

1 point

QUESTION 10

When a nation is producing on its production possibilities frontier, if more resources are used to produce one good, then the production of other goods

		must increase.
		must decrease.
		must remain the same.
		must change but they might increase or decrease.

1 point

QUESTION 11

Moving along a country's PPF, a reasonable opportunity costs increase is that

		unemployment increases as a country produce more and more of one good.
		unemployment decreases as a country produces more and more of one good.
		some resources are better suited for producing one good rather than the other.
		technology declines as a country produce more and more of one good.

1 point

QUESTION 12

A reason the production possibilities frontier exists is

		scarcity of resources and unlimited technology.
		unemployment.
		scarcity of resources.
		unlimited resources and technology.

1 point

QUESTION 13

Moving from one point to another on a production possibilities frontier implies

		increasing the production of one good and decreasing the production of another.
		increasing the production of both goods.
		decreasing the production of both goods.
		holding the production levels of both goods constant.

1 point

QUESTION 14

Specialization and trade make a country better off because with trade the country can consume at a point

		outside its production possibilities frontier.
		on its trading partner's production possibilities frontier.
		inside its production possibilities frontier.
		on its production possibilities frontier.

1 point

QUESTION 15

The production possibilities frontier is the

		the boundary between the combinations of goods and services that can be produced and the combinations that cannot be produced when technology is changing.
		the minimum output that can be produced when resources are used inefficiently.
		the boundary between the combinations of goods and services that can be produced and the combinations that cannot be produced, given the available factors of production and the state of technology.
		maximum output that can be produced at an opportunity cost of zero.

1 point

QUESTION 16

The opportunity cost of economic growth is ________ and the benefit of economic growth is ________.

		decreased current consumption; decreased future consumption
		decreased current consumption; increased future consumption
		increased current consumption; increased future consumption
		increased current consumption; decreased future consumption

1 point

QUESTION 17

In terms of a nation's production possibilities frontier, what impact does international trade have?

		International trade shifts the nation's production possibilities frontier outward.
		International trade shifts the production possibilities frontier outward for the goods that are exported and inward for the goods that are imported.
		International trade shifts the nation's production possibilities frontier inward.
		International trade allows the nation to consume at a point outside its production possibilities frontier.

1 point

QUESTION 18

The production possibilities frontier illustrates the

		goods and services that people want.
		limits to people's wants.
		resources the economy possesses, but not it is the level of technology.
		maximum combinations of goods and services that can be produced.

1 point

QUESTION 19

As we move along the production possibilities frontier,

		the possibilities of tradeoffs diminish.
		the production of one good increases as the production of the other good decreases.
		more of both goods can be produced.
		a tradeoff is not possible because nations need all goods.

1 point

QUESTION 20

What is the opportunity cost of economic growth?

		Eliminate scarcity
		Land.
		Capital goods.
		Consumption of goods.

1 point

QUESTION 21

Which of the following statements is correct?

i.As the economy grows, the opportunity costs of economic growth decrease.

ii. Economic growth has no opportunity cost.

iii. The opportunity cost of economic growth is current consumption forgone.

		ii only
		iii only
		I only
		I and iii

1 point

QUESTION 22

Does economic growth depend upon which of the following?

i. Increasing the quantity of labor.

ii. Lowering the prices of goods and services.

iii. Advancing technology.

		ii only.
		I only.
		I and iii.
		iii only.

1 point

QUESTION 23

When drawing a production possibilities frontier, which of the following is held constant?

		the amount of money in the economy
		the prices of goods and services
		the quantity of the goods and services that are produced
		the available factors of production and the state of technology

1 point

QUESTION 24

To increase its economic growth, a nation should

		encourage spending on goods and services.
		increase in current consumption.
		encourage education because that increases the quality of labor.
		limit the number of people in college because they produce nothing.

1 point

QUESTION 25

The opportunity cost of one more slice of pizza in terms of sodas is the

		some pizza slices we have to give up to get one extra soda.
		the total number of sodas that we have divided by the total number of pizza slices that we have.
		the total number of pizza slices that we have divided by the total number of sodas that we have.
		the number of sodas we have to give up to get one extra pizza slice.

jadecrow966

The opportunity cost of one more slice of pizza in terms of sodas is the

		the total number of pizza slices that we have divided by the total number of sodas that we have.
		the number of sodas we have to give up to get one extra pizza slice.
		the number of pizza slices we have to give up to get one extra soda.
		the total number of sodas that we have divided by the total number of pizza slices that we have.

1 point

QUESTION 2

A production possibilities frontier shows

		how money can be allocated among two kinds of goods.
		the limits to the future growth of a nation.
		the various combinations of output a nation can produce at a certain time, given its available resources and technology.
		that if the price of one good decreases, the price of the other has to increase.

1 point

QUESTION 3

When a production possibilities frontier is bowed outward, as more of one good is produced, its opportunity cost

		remains constant.
		might increase, decrease, or remain constant depending on how much people value the additional units of the good.
		increases.
		decreases.

1 point

QUESTION 4

When all of the available factors of production are being efficiently employed, the

		the economy is producing at a point within its PPF.
		PPF disappears.
		the economy is producing at a point beyond its PPF.
		the economy is producing at a point on its PPF.

1 point

QUESTION 5

If a nation devotes a larger share of its current production to consumer goods, then

		its PPF will shift inward.
		its economic growth will slow down.
		its PPF will shift outward.
		some productive factors will become unemployed.

1 point

QUESTION 6

A point on the production possibilities frontier reflects an

		the attainable point with full employment of all resources.
		attainable point without full employment of all resources.
		unattainable point without full employment of all resources.
		the unattainable point with full employment of all resources.

1 point

QUESTION 7

When drawing a production possibilities frontier, which of the following is held constant?

		the available factors of production and the state of technology
		the amount of money in the economy
		the prices of goods and services
		the quantity of the goods and services that are produced

1 point

QUESTION 8

As we move along the production possibilities frontier,

		more of both goods can be produced.
		the possibilities of tradeoffs diminish.
		a tradeoff is not possible because nations need all goods.
		the production of one good increases as the production of the other good decreases.

1 point

QUESTION 9

Which of the following is an assumption used when drawing a production possibilities frontier?

i.Human wants and desires are limited to what is available.

ii. Only two goods are considered.

iii. The level of technology is fixed and unchanging.

		I and iii
		ii only
		I, ii, and iii
		I only

1 point

QUESTION 10

To achieve gains from trade, a country

		needs to have an absolute advantage in the production of all goods.
		specializes in producing a good in which it has a lower opportunity cost.
		must produce at a point beyond its PPF.
		should produce at the midpoint of its PPF.

1 point

QUESTION 11

Relative to Al, Joe has ________ if Joe can produce a good at a lower opportunity cost than Al.

		a comparative advantage
		more production efficiency
		a marginal benefit
		a comparative benefit

1 point

QUESTION 12

Does economic growth depend upon which of the following?

i.Improving the quality of labor

ii. Technological advancement

iii. Increasing the amount of capital

		iii only
		ii only
		I only
		I, ii, and iii

1 point

QUESTION 13

In one hour John can produce 20 loaves of bread or 18 cakes. In one hour Phyllis can produce 30 loaves of bread or 15 cakes. Which of the following statements is true?

		John has a comparative advantage in producing cakes.
		Phyllis has an absolute advantage in both goods.
		Phyllis has a comparative advantage in producing cakes.
		John has an absolute advantage in both goods.

1 point

QUESTION 14

As an economy produces more of one of the goods on a bowed out production possibilities frontier, what happens to the opportunity cost of producing the good?

		It decreases.
		It might increase, decrease, or remain constant depending on how much people value the additional units of the good.
		It remains constant.
		It increases.

1 point

QUESTION 15

The production possibilities frontier illustrates the

		goods and services that people want.
		maximum combinations of goods and services that can be produced.
		resources the economy possesses, but not it is the level of technology.
		limits to people's wants.

1 point

QUESTION 16

The United States produced approximately ________ worth of goods and services in 2007.

		$14 billion
		$14 trillion
		$140 billion
		$140 trillion

1 point

QUESTION 17

The fact of increasing opportunity cost when moving on the PPF means that

		to increase the production of one product requires smaller and smaller sacrifices of the other good.
		to decrease the production of one product requires smaller and smaller sacrifices of the other good.
		to increase the production of one product requires larger and larger sacrifices of the other good.
		when the government forces a movement from one point on the PPF to another point, no production is lost.

1 point

QUESTION 18

Other things equal, if India devotes more resources to educate its population than China,

		China will grow faster than India.
		India will be able to eliminate scarcity faster than China.
		India will be able to eliminate opportunity cost faster than China.
		India will grow faster than China.

1 point

QUESTION 19

For Ireland to grow more potatoes, wool production must decrease. This situation is an example of

		zero opportunity cost.
		producing at a point that lies beyond the PPF.
		opportunity benefit.
		a tradeoff.

1 point

QUESTION 20

Moving from one point to another on a production possibilities frontier implies

		increasing the production of both goods.
		increasing the production of one good and decreasing the production of another.
		holding the production levels of both goods constant.
		decreasing the production of both goods.

1 point

QUESTION 21

The United States is one of the richest nations in the world,

		but it can still benefit from specialization and trade.
		so does not need to trade with poor nations to achieve any gains from trade.
		so might not have a comparative advantage in producing any goods.
		so it must have a comparative advantage in the production of all goods.

1 point

QUESTION 22

"Comparative advantage" is defined as a situation in which one person can produce

		more of all goods than another person.
		a good for a lower opportunity cost than another person.
		a good for a lower dollar cost than another person.
		more of a good than another person.

1 point

QUESTION 23

The idea of increasing opportunity cost is reflected in the

		the linear shape of the production possibilities frontier.
		bowed in the shape of the production possibilities frontier.
		bowed out the shape of the production possibilities frontier.
		the positive slope of the production possibilities frontier.

1 point

QUESTION 24

Suppose that after specializing according to comparative advantage, a country is trading with another nation that also specializes according to its comparative advantage. Which of the following statements are true for the first country?

i)It enjoys gains from trade.

ii)It must have an absolute advantage in the production of the good it produces.

iii)It is producing at a point beyond its PPF.

		I only.
		I and ii.
		I and iii.
		ii and iii.

1 point

QUESTION 25

If society moves from a period of time with significant unemployment to a time with full employment, its production possibilities frontier will

		shift rightward.
		not shift because the society moves from one point on the frontier to a point inside the frontier.
		not shift because the society moves from a point inside the frontier to a point on the frontier.
		shift leftward.

1 point

ochresea-lion6

1. According to a WSJ article, in Britain, drug companies are paying for nurses to study patient charts to identify people with chronic illnesses. "The nurses then recommend which patients should be called in for a check-up and perhaps prescribe new treatment. The work is part of what the industry calls "disease management programs," which the companies say improve care for people with illnesses like diabetes, asthma, or heart disease." Source: Jeanne Whalen, "Drug Makers Finance Nurses for U.K. Doctors." Wall Street Journal, 30 May 2007, Page B1. Which of the following best explains the actions of the drug companies? Select one:

a. Drug companies see this program as a way of educating patients about the various drug choices available to them

b. The companies see this program as a way to market their own products

c. The companies are committed to improving patient care in Britain

d. The companies are doing their part to ease the health care crisis in Britain

2. According to the economic way of thinking, Select one:

a. The value of a good is determined by the cost of the resources used to produce that good

b. A nation's wealth can be increased by shifting the production possibilities frontier inward.

c. Innovation makes it possible to produce good without giving up the production of another good

d. Costs are incurred when scarce resources are used to produce goods.

3. All of the statements are true about markets except Select one:

a. Markets excel at wealth creation because they often provide incentives for self-interested individuals to take socially beneficial actions

b. Markets function even without an administrator to coordinate the consumption and production plans of buyers and suppliers, respectively

c. The most equitable way to distribute goods and services is through markets

d. Markets are generally an efficient way to facilitate the exchange of goods, services, and resources

4. An institutional arrangement that provides people with opportunities and procedures for exchanging goods, services, and resources is called: Select one:

a. Barter

b. A social economy

c. Traded.

d. A market

5. Concerned that California's high-occupancy vehicle (HOV) lanes were not operating at full capacity and therefore not easing congestion as much as they could. In 2006, California lawmakers authorized the state's Department of Motor Vehicles to distribute 85,000 stickers to owners of gasoline-electric hybrid cars. Which of the following are the consequences of this policy?

(i) The stickers increased the demand for hybrid vehicles that qualified for stickers. (ii) The price of hybrid vehicles increased. (iii) The HOV lanes became clogged with hybrid vehicles which further aggravated congestion. Select one:

a. (i) and (ii) only b. (i), (ii) and (iii) c. (ii) and (iii) only d. (i) only

6. Consider the following policy: To make sure that poor people receive emergency treatment, the U.S. government forces emergency rooms to offer free care to poor patients. Which of the following is a consequence of this policy? Select one:

a. Hospitals in poor neighborhoods are likely to close their emergency rooms because of the high cost of providing free treatment to poor patients

b. Hospitals will have to offer higher salaries to doctors and nurses to induce them to work in poor neighborhoods

c. More hospitals are likely to open emergency care facilities in poor neighborhoods because of increased demand

d. The wait time in emergency rooms will fall.

7. Consider the following three statements: (i) The slump in the housing market has led to an increase in unemployment in the housing construction market. (ii) The Federal Reserve decided to keep interest rates unchanged, motivated by the slump in the housing market. (iii) The California Air Resources Board passed a regulation requiring that 10% of all large automobiles sold in California from 2008 onward be zero-emissions vehicles: cars powered by electricity or alternative fuels like hydrogen. Which of the statements is a macroeconomics issue? Select one:

a. (ii) only b. (i), (ii) and (iii) c. (i) and (ii) only d. (ii) and (iii) only

8. Consider the following three statements: (i) The slump in the housing market has led to an increase in unemployment in the housing construction market. (ii) The Federal Reserve decided to keep interest rates unchanged, motivated by the slump in the housing market. (iii) The California Air Resources Board passed a regulation requiring that 10% of all large automobiles sold in California from 2008 onward be zero-emissions vehicles: cars powered by electricity or alternative fuels like hydrogen. Which of the statements is largely a microeconomics issue? Select one:

a. (i) and (iii) only b. None of the above statements is a microeconomics issue c. (iii) only d. (i) only

9. Consider the following two medical procedures for a particular chronic illness. Procedure X has a very high patient survival rate, but patients are likely to suffer significant brain damage that greatly diminishes one's quality of life. Procedure Y has a much lower survival rate, but if a patient survives she is able to lead a full and normal life. If surgeons are compensated only if their patients survive, how will this policy affect the treatment for this illness?

Select one:

a. More of procedure X will be performed although patients are likely to suffer significant brain damage

b. Surgeons have no incentive to treat this illness

c. More of procedure Y will be performed because patients will able to lead full and normal lives

d. Patients have no incentive to seek treatment for this illness

10. Daikin, Possner, and Zoe are discussing what it means to say that people respond to incentives. Here is an extract from their conversation. Daikin: It means that people are required to behave in a cooperative fashion so that the citizens of a nation can coexist peacefully. Possner: It means that people act in ways that society approves. No rational person will do business with immoral characters. Zoe: It means that people undertake certain actions if they know that doing so will result in some form of material reward that they will not otherwise receive. Whose view accords with the economic way of thinking? Select one:

a. Only the views of Daikin and Zoe exhibit the economic way of thinking.

b. Possner's view is the only one that exhibits the economic way of thinking.

c. All three of their views exhibit an economic way of thinking.

d. Zoe's view is the only one that exhibits the economic way of thinking.

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ECON 101 Chapter 1-12: Econ 101 Chapter 1-12 vocab.docx

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