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Basics of Economics & Finance Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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Question 1 1. Assume that you have two hours to spend at the mall. You can either visit the bookstore or enjoy a movie at the theater. The opportunity cost of watching a movie is equivalent to which of the following?

Question 2 2. Investments in which of these do more to increase economic growth?

Question 3 3. Country A's opportunity cost of producing 1 ton of corn is 5 tons of wheat, while Country B's opportunity cost of producing 1 ton of corn is 1/3 of a ton of wheat. Which of the following statements is true?

Question 4 4. Because resources are scarce, but wants are not:

Question 5 5. With the same amount of resources, Country A can produce 25 tons of chicken or 50 tons of wheat. What is Country A's opportunity cost of producing 1 ton of wheat?

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Question 6 6. Why doesn't the output continue to increase on the production possibilities curve?

Question 7 7. The United States can produce 20 strawberries or 80 apples, while Canada can produce 15 strawberries or 5 apples. Which of the following describes what will happen if these two countries trade with each other?

Question 8 8. When countries specialize in the goods in which they have a comparative advantage, which of the following is true?

Question 9 9. Which of the following statements is true?

Question 10 10. If Sally can produce 1 term paper or 4 cookies in one hour, and Adam can produce 2 term papers or 1 cookie in the same amount of time, which of these statements is true?

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Question 11 11. What does it mean for a nation to have an absolute advantage in the production of a good?

Question 12 12. A person or nation that has a comparative advantage in the production of a good, should _____.

Question 13 13. Which of the following is NOT a benefit of specialization and exchange?

Question 14 14. Economics looks at

Question 15 15. Assume that land can be used either for producing corn or producing beef. The opportunity cost of converting an acre from producing corn to raising cattle for beef is equal to which of the following?

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Question 16 16.

Country A can either produce 10 cars or 10 computers, while country B can produce either 4 cars or 8 computers.

Based on this information, which of the following statements is FALSE?

Question 17 17. Economics is best described as the study of:

Question 18 18. A point that is located inside the production possibility curve is:

Question 19 19. Outward shifts (to the right) in the production possibilities curve will result in which of the following?

Question 20 20. Which of the following are problems that all economies face?

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Question 21 21. According to the two production possibility curves shown, Country A should specialize in the production of which of the following?

Question 22 22. Which of the following people has the highest opportunity cost of earning a college degree, if they must give up their present job?

Question 23 23. It takes Joan 1 hour to make a pizza and 2 hours to make a cake. Joan's opportunity cost of making a pizza is which of the following?

Question 24 24. What does the production possibilities model show?

Question 25 25. According to the Law of Comparative Advantage, where should a good be produced?

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Question 26 26. In one hour, Sally can complete 4 reports or she can write 8 computer programs. Calculate the opportunity cost for this scenario.

Question 27 27. Assuming there are only two countries, Country A can produce 10 tons of wheat or 20 tons of rice, while Country B can produce 5 tons of wheat or 15 tons of rice. Which country has the highest opportunity cost for producing 1 ton of rice?

Question 28 28. What happens if a nation doesn't have an absolute advantage in producing anything?

Question 29 29. The perpetual problem in economics is:

Question 30 30. Assume that there are only two countries, Country A and Country B, producing only two goods, corn cereal and designer jeans. The table here shows the production possibilities for these two countries. Which of the following statements is correct?

Basics of Economics & Finance Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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