Multiple-Choice Questions

  1. Question

    In a market economy, most choices about production and consumption are made by which of the following?

    		A.
    		B.
    		C.
    		D.
    		E.
    In a market economy, most choices about production and consumption are made by which of the following?

  2. Question

    Which of the following pairs indicates a category of resources and an example of that resource?
    CategoryExample

    		A.
    		B.
    		C.
    		D.
    		E.
    Which of the following pairs indicates a category of resources and an example of that resource?

  3. Question

    You can either go to a movie or study for an exam. Which of the following is an opportunity cost of studying for the exam?

    		A.
    		B.
    		C.
    		D.
    		E.
    You can either go to a movie or study for an exam. Which of the following is an opportunity cost of studying for the exam?

  4. Question

    Page 34

    Which of the following situations is explained by increasing opportunity costs?

    		A.
    		B.
    		C.
    		D.
    		E.
    Which of the following situations is explained by increasing opportunity costs?

  5. Question

    Which of the following is a normative statement?

    		A.
    		B.
    		C.
    		D.
    		E.
    Which of the following is a normative statement?

  6. Question

    Falling output in an economy is consistent with which of the following?

    		A.
    		B.
    		C.
    		D.
    		E.
    Falling output in an economy is consistent with which of the following?

  7. Question

    Which of the following is a goal for the macroeconomy?

    		A.
    		B.
    		C.
    		D.
    		E.
    Which of the following is a goal for the macroeconomy?

  8. Question

    Refer to the following table and information for Questions 8–11.


    Suppose that Atlantis is a small, isolated island in the South Atlantic. The inhabitants grow potatoes and catch fish. The following table shows the maximum annual output combinations of potatoes and fish that can be produced.








































    Maximum annual output optionsQuantity of potatoes(pounds)Quantity of fish(pounds)
    A1,0000
    B800300
    C600500
    D400600
    E200650
    F0675


    Atlantis can produce which of the following combinations of output?
    Pounds of potatoesPounds of fish

    		A.
    		B.
    		C.
    		D.
    		E.
    Refer to the following table and information for Questions

  9. Question

    If Atlantis is efficient in production, what is the opportunity cost of increasing the annual output of potatoes from 600 to 800 pounds?

    		A.
    		B.
    		C.
    		D.
    		E.
    If Atlantis is efficient in production, what is the opportunity cost of increasing the annual output of potatoes from 600 to 800 pounds?

  10. Question

    As Atlantis produces more potatoes, what is true about the opportunity cost of producing potatoes?

    		A.
    		B.
    		C.
    		D.
    		E.
    As Atlantis produces more potatoes, what is true about the opportunity cost of producing potatoes?

  11. Question

    Which of the following combinations of output is efficient?
    Pounds of potatoesPounds of fish

    		A.
    		B.
    		C.
    		D.
    		E.
    Which of the following combinations of output is efficient?

  12. Question

    Refer to the following information for Questions 12–13.


    In the ancient country of Roma, only two goods—spaghetti and meatballs—are produced. There are two tribes in Roma, the Tivoli and the Frivoli. By themselves, in a given month, the Tivoli can produce 30 pounds of spaghetti and no meatballs, 50 pounds of meatballs and no spaghetti, or any combination in between. In the same month, the Frivoli can produce 40 pounds of spaghetti and no meatballs, 30 pounds of meatballs and no spaghetti, or any combination in between.


    Which tribe has a comparative advantage in meatball and spaghetti production?
    MeatballsSpaghetti

    		A.
    		B.
    		C.
    		D.
    		E.
    Refer to the following information for Questions 1

  13. Question

    Page 35

    In A.D. 100, the Frivoli discovered a new technique for making meatballs and doubled the quantity of meatballs they could produce each month. After the discovery of this new technique in Frivoli only, which tribe had an absolute advantage in meatball production and which had a comparative advantage in meatball production?
    Absolute advantageComparative advantage

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    		B.
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    		D.
    		E.
    In

  14. Question

    Which of the following is a basic source of economic growth in the production possibilities model?

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    		B.
    		C.
    		D.
    		E.
    Which of the following is a basic source of economic growth in the production possibilities model?

  15. Question

    Comparative advantage explains which of the following?

    		A.
    		B.
    		C.
    		D.
    		E.
    Comparative advantage explains which of the following?
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