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Scarcity, Choice, and the Production Possibilities Curve 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. Tom owns a company and he is analyzing his company's capital structure. Which of the following is he NOT likely to find?

Question 2 2. Rebeca is the CEO of a large marketing company. After paying taxes, her company was left with $18,000,000 of disposable income. She can reinvest this money into her company in infrastructure spending and salary increase, or she can invest it into the stock market. The cost of choosing one over the other is called the _____ cost.

Question 3 3. Jenifer owns a company which grows and distributes organic food throughout four continents. She is considering going into a joint venture with another company, but she also is considering spending money to increase the satisfaction of her employees. What is a key assumption for her to be able to use opportunity cost to find a solution?

Question 4 4. Rachel is considering how several factors may help her company's productivity. She is considering using advances in technology, more investment into human capital and she is trying to predict the changing trends in the labor force. Which of the following would be MOST beneficial to this scenario?

Question 5 5. James is considering opening a new line of fast food restaurants. He has a great idea of making many affordable restaurants and hopes to develop his own franchise. He will need to rent some space in order to be able to do so and he will need at least $16,000,000 to start implementing his idea. Why is this an example of the use of factors of production?

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Question 6 6. Why are all resources essentially scarce?

Question 7 7. Why is scarcity central to understanding economics?

Question 8 8. Which of the following is FALSE regarding incentives?

Question 9 9. Jim has invested $1,000 in government bonds, while he could have invested $500 in a small startup. Calculate the opportunity cost:

Question 10 10. Which of the following is a key assumption of the production possibilities model?

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Question 11 11. John is considering whether he should work for an hour, or go running for an hour. What is the opportunity cost of going running?

Question 12 12. Why doesn't the output continue to increase on the production possibilities curve?

Question 13 13. How are capital goods different from consumer goods?

Question 14 14. Provided that other factors remain the same, which of the following would shift an economy's production possibilities curve to the left?

Question 15 15. Economics looks at

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Question 16 16. Economics is best described as the study of:

Question 17 17. Scarcity means:

Question 18 18. 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?

Question 19 19. Which of the following best describes opportunity cost?

Question 20 20. Josie decided to go to college full-time instead of working. Which of the following is the opportunity cost of going to college for Josie?

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Question 21 21. What does the production possibilities model show?

Question 22 22. Which is TRUE of points located outside of the production possibility curve?

Question 23 23. When a point is on the production possibilities curve and there are no other points specifically on the curve, how can we interpret this point?

Question 24 24. In one hour, Sally can complete 4 reports or she can write 9 computer programs. Calculate the opportunity cost for this scenario.

Question 25 25. 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 26 26. Which of the following people has the highest opportunity cost of earning a college degree, if they must give up their present job?

Question 27 27. Carl owns a computer company. On any given day, he can produce either 500 desktop computers or 300 laptops. What's his opportunity cost if he decides to produce desktops?

Question 28 28. How can opportunity cost be best described?

Question 29 29. You can invest in the stock market with an expected return of 9% or invest in the bond market with an expected return of 6%. What's your opportunity cost if you invest in bonds?

Question 30 30. All of the following factors impact an economy's production possibility curve except

Scarcity, Choice, and the Production Possibilities Curve 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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