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- 1. Multiple Choice
Scarcity causes economic problem. Which of the following statements is true about scarcity?
Scarcity is our inability to satisfy all of our wants.
Scarcity problem arises because our wants are greater than resources available.
The poor and the rich both face scarcity.
All of the above.
- 2. Multiple ChoiceIndividuals A and B can produce good X. We say that A has a comparative advantage in the Production of good X if:A has a lower opportunity cost of producing X than BA can produce less units of X in a given time period than B.A can produce X using newer technology than B.A can produce more units of X in a given time period than B.
- 3. Multiple Choice
The night before an economics test, you decide to go to the movies instead of studying for the test. You get 50% for the test – not the 70% you normally score. What was the opportunity cost of your evening at the movies?
50%
70%
20%
Nil.
- 4. Multiple Choice
Which of the following statements is incorrect?
The marginal cost of a good is the opportunity cost of producing one more unit of it.
As the opportunity cost of producing more goods increases, the marginal cost of producing the good decreases.
The marginal cost of a good or service is the change in cost resulting from producing one more unit of it.
The marginal benefit of a good or service is the change in benefit resulting from producing one more unit of it.
- 5. Multiple Choice
There are two goods, X and Y. If the opportunity cost of producing good X is lower for Jack than for Jill, then
Jack has an absolute advantage in the production of X.
Jack has a comparative advantage in the production of X.
Jill has a comparative advantage in the production of Y.
Jill has an absolute advantage in the production of X.
- 6. Multiple Choice
Which of the following statements is correct?
The production possibilities curve (PPC) is the boundary between those combinations of goods and services that can be consumed and those which cannot.
Choices above the PPC are attainable with different combination of given resources.
Production is efficient inside the PPC because we may have unused resources.
All choices on the PPF curve are the maximum attainable production efficiency points.
- 7. Multiple Choice
Assume Sandy has the absolute advantage in producing both bread and butter over Andy. Also assume that both Andy and Sandy agree to specialize in the production of the good in which each has a comparative advantage. What will be the total production of bread and butter in the market?
Sandy will produce all bread and butter because she has the absolute advantage.
Sandy will produce all bread and butter because she has the comparative advantage.
The same amount as when Andy & Sandy did not specialize.
More bread and more butter than could be produced individually
- 8. Multiple Choice
Which is the best example of a scarce resource?
Air
Water
Money
Dirt
- 9. Multiple Choice
Which type of economy is controlled by the government
Command Economy
Free Market Economy
Mixed Economy
Traditional Economy
- 10. Multiple Choice
Which type of economy is controlled by "the Invisible Hand"
Command Economy
Free Market Economy
Mixed Economy
Traditional Economy
- 11. Multiple Choice
Mexico is able to produce 60 tons of corn or 15 tons of wheat. Canada is able to produce 90 tons of corn or 30 tons of wheat. Which of the following statements are true? (pick 2)
Canada has the comparative advantage in corn.
Mexico has the comparative advantage in corn.
Canada has the comparative advantage in wheat.
Mexico has the comparative advantage in wheat.
- 12. Multiple Choice
Mexico is able to produce 60 tons of corn or 15 tons of wheat. Canada is able to produce 90 tons of corn or 30 tons of wheat. Which of the following statements are true? (pick 2)
Canada has the absolute advantage in corn.
Mexico has the absolute advantage in corn.
Canada has the absolute advantage in wheat.
Mexico has the absolute advantage in wheat.
- 13. Multiple Choice
Mexico is able to produce 60 tons of corn or 15 tons of wheat. Canada is able to produce 90 tons of corn or 30 tons of wheat. Which of the following statements are true? (pick 2)
Canada should produce corn and trade for wheat.
Mexico should produce corn and trade for wheat.
Canada should produce wheat and trade for corn.
Mexico should produce wheat and trade for corn.
- 14. Multiple Choice
What are the advantages to a command economy?
More jobs / employment than a market economy
Less income disparity than a market economy
More flexibility than a market economy
More consumer choices than a market economy.
- 15. Multiple Choice
What are the advantages to a market economy?
People are more likely to lose their jobs
Less income disparity than a command economy
One person gets to decide who gets what
More consumer choices than a command economy.
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