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- 1. Multiple Choice
Which of the following best describes human capital?
The number of workers in the labor force
The physical capital used by workers
The financial assets owned by workers
The training and education of workers
- 2. Multiple Choice
If the wage rate of workers producing a good decreases, then which of the following will most likely occur?
The demand curve will shift to the right.
The supply of the good will increase.
The quantity supplied of the good will decrease.
Quantity demanded for the good will decrease.
- 3. Multiple Choice
Assume an economy produces two goods, capital goods and consumer goods. If the production of capital goods increases in the current period, which of the following will occur for the current and future production possibilities curve (PPC) for consumer goods and capital goods?
A movement along the current PPC and a leftward shift of the future PPC
A movement along the current PPC and a rightward shift of the future PPC
A rightward shift of the current PPC and a leftward shift of the future PPC
A rightward shift of the current PPC and a rightward shift of the future PPC
- 4. Multiple Choice
The diagram above shows the production possibilities curve for the production of peaches and apples in Fruitland. Between points X and Y on the PPC, the opportunity cost of one unit of peaches is which of the following?
2 units of apples
1 unit of apples
2 units of peaches
1 unit of peaches
- 5. Multiple Choice
Which of the following will cause a movement along the demand curve for chicken, a normal good, resulting in an increase in the quantity demanded?
An increase in consumers' income
An increase in the price of fish, a substitute good
An increase in the price of barbecue sauce, a complementary good
A decrease in the price of chicken
- 6. Multiple Choice
Which of the following describes the law of supply?
An increase in the price of a good will decrease the quantity demanded.
The price of a good will increase if production input costs increase.
An increase in the price of a good will increase the quantity supplied.
An increase in taxes will decrease the supply of a good.
- 7. Multiple Choice
For an economy that is operating inside its production possibilities curve, which of the following is true?
It can increase the production of both goods.
Its population is growing faster than the economy’s ability to increase production.
It is using all available resources efficiently.
It cannot move to a point on the production possibilities curve with available technology.
- 8. Multiple Choice
Which of the following would be most likely to occur if the United States placed high tariffs on imported goods?
Workers in the United States would have more jobs in the long run.
Income in the United States would be redistributed from the rich to the poor.
The United States standard of living would increase.
The United States economy would become less efficient.
- 9. Multiple Choice
Holding the nonprice determinants of supply constant, a change in price would
result in a change in supply
result in a movement along a stable supply curve.
result in a shift of demand.
have no effect on the quantity supplied.
- 10. Multiple Choice
Which of the following best explains why many United States economists support free international trade?
Workers who lose their jobs can collect unemployment compensation.
It is more important to reduce world inflation than to reduce United States unemployment.
Workers are not affected; only businesses suffer.
The long-run gains to consumers and some producers exceed the losses to other producers.
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