Microeconomics CH. 2 Scarcity and the World of Trade-Offs – Quiz

Danny goes to a military academy to become a soldier. This is an example of

A. entrepreneurship.
B. an increase in labor.
C. an investment in human capital.
D. an investment in physical capital.

When an individual proclaims the need for a new​ car, the person typically means

A. that without a new​ car, their life cannot go on.
B. that having such a possession would be nirvana.
C. that their ability to get around will cease.
D. they want something they currently do not have.

Scarcity implies that

A. the satisfaction of one​ person's want means another person will be more than satisfied.

B. the satisfaction of one​ person's want means another​ person's want can also be satisfied.

C. no​ person's wants can be satisfied.

D. the satisfaction of one​ person's want means another​ person's want cannot be satisfied.

Economists are concerned with an​ individual's

A. wants because the existence of wants leads to scarcity.
B. needs because needs represent the most important goods to an individual.
C. needs because economists define needs to be the goods people need to survive.
D. wants​ because, unlike​ needs, wants lead to shortages in the economy.

You and a friend decide to spend​ $100 each on concert tickets. Each of you alternatively could have spent the​ $100 to purchase a​ textbook, a meal at a highly rated local​ restaurant, or several internet movie downloads. As you are on the way to the​ concert, your friend tells you that if she had not bought the concert​ ticket, she would have opted for a restaurant​ meal, and you reply that you otherwise would have downloaded several movies.

The relevant opportunity costs for you and your friend of the concert tickets that you purchased are

A. a textbook. a meal at a highly rated local​ restaurant, and several internet movie downloads for you and a​ textbook, a meal at a highly rated local​ restaurant, and several internet movie downloads for your friend.

B. $100 for you and​ $100 for your friend.

C. Any one of the following for you and your​ friend: a meal at a highly rated local​ restaurant, several internet movie downloads or a textbook.

D. internet movie downloads for you and a meal at a highly rated local restaurant for your friend.

The opportunity cost of going to college full time away from home includes

A. the funds you would have saved if you had not paid the tuition.
B. the income you could have earned from a full-time job.
C. the time you could have spent with parents back home.
D. All of the above are correct.

A movement along the production possibilities curve would imply that

A. productivity has increased.
B. society has chosen a different set of outputs.
C. the labor force has grown.
D. productivity has declined because workers are demanding more leisure

A point inside the PPC means that

A. one good has no opportunity cost relative to another.
B. economic growth has taken place.
C. this particular economy has no comparative advantage in production any economic good.
D. resources are not being fully utilized due to unemployment or inefficiency.

All of the following are assumptions of the production possibilities curve EXCEPT

A. there is a fixed demand for the products.
B. there is a fixed level of technology.
C. resources are fully employed.
D. there is a fixed time period.

​Typically, the greater the specialization of​ resources,

A. the less production that takes place.
B. the greater the unemployment in the country.
C. the greater the bow of the production possibilities curve.
D. the poorer the country becomes.

Economic growth implies

A. you can now have more of all goods.
B. opportunity costs are decreasing.
C. you can only have more of one good by having less of another.
D. fewer resources are available.

Current production of capital goods means that

A. the production possibilities curve will shift outward now.

B. more resources are being​ exhausted, so total production will decrease.

C. more consumption goods can be produced​ now, since there are more production facilities.

D. the production possibilities curve can be expected to shift outward in the future.

The discovery of new natural resources will cause

A. the production possibilities curve to shift up and to the right.
B. an upward movement along the curve.
C. the curve to shift back and to the left.
D. the economy to move closer to the production possibilities curve.

To have more consumer goods in the​ future, we must

A. lower current income.
B. get government involved in the production process.
C. stop producing all goods today.
D. produce more capital goods today.

When Adam​ Smith's ten pin workers​ specialized, they were able to increase the output of pins in a day from 200 to​ 48,000. One reason for the increase in pin production was due to

A. the bonus they received when they produced more pins.

B. the boredom the workers suffered when they stopped making a whole pin and only concentrated on one task such as straightening the wire.

C. the mastery each worker achieved over his assigned task.

D. the threats the supervisor made to fire them if they did not increase output.

Specialization and comparative advantage

A. lead to international trade and overall gains for the nations involved.

B. lead to greater productivity.

C. lead to greater output even if you can do everything better than someone else.

D. All of the above.

Tiger​ Woods, a professional​ golfer, pays a garage mechanic to change the motor oil of his car even though he can do the work himself.

Which of the following best explains why Tiger Woods does not change the oil​ himself?

A. There is no opportunity cost for the garage mechanic to change oil.

B. Tiger Woods has an absolute advantage in changing oil.

C. Tiger Woods has a comparative advantage in changing oil.

D. The opportunity cost of changing oil is higher for Tiger Woods than for the garage mechanic.

Suppose that Canadian farmers can grow wheat more cheaply than can U.S. farmers.

In the interest of​ efficiency, what is the desirable​ outcome?

A. Pass a law in Canada mandating a minimum price for wheat equal to what is charged by U.S. farmers.

B. Allow the Canadian farmers to sell their wheat for a lower price.

C. Pass a law in the United States mandating a maximum price for wheat equal to what is charged by Canadian farmers.

D. Have U.S. citizens boycott Canadian wheat.