Microeconomics - Testbank 1 (Hubbard/OBrien)Chapter 2 Trade-offs, Comparative Advantage, and the Market System1) Scarcity: A) requires tradeoffs. B) is due to limited wants. C) is due to unlimited resources. D) all of the above. 2) An example of a factor of production would be: A) a car produced by an auto manufacturer. B) a worker hired by an auto manufacturer. C) money borrowed by an auto manufacturer. D) all of the above. 3) The production possibilities frontier shows: A) the various products that can be produced now and in the future. B) attainable combinations of two products that may be produced in a particular time period with available resources. C) what an equitable distribution of products among citizens would be. D) what people want to have produced in a particular time period. 4) The attainable production points on a production possibility curve are: A) the horizontal and vertical intercepts. B) the points along the production possibilities frontier. C) the points outside the area enclosed by the production possibilities frontier. D) the points along and inside the production possibility frontier. 5) The unattainable points vis-a-vis a production possibilities frontier are: A) the points within the production possibilities frontier. B) the points along the production possibilities frontier. C) the points of the horizontal and vertical intercepts. D) the points outside the production possibilities frontier. Refer to Figure 2.1 for the questions below.Figure 2.1 6) In figure 2.1, point A: A) is technically efficient. B) is unattainable with current resources. C) is inefficient implying not all resources are being used. D) is the equilibrium. 7) In figure 2.1, point B: A) is technically efficient. B) is unattainable with current resources. C) is inefficient implying not all resources are being used. D) is the equilibrium. 8) In figure 2.1, point C: A) is technically efficient. B) is unattainable with current resources. C) is inefficient implying not all resources are being used. D) is the equilibrium. 9) On a production possibilities frontier, a combination of output that is inside the frontier is: A) allocatively efficient. B) productively efficient C) allocatively inefficient. D) productively inefficient. 10) Assumed with a production possibilities frontier is that: A) only two products are produced. B) resource supplies are fixed. C) technology is fixed. D) all of the above. 1-5：ABBDD6-10：CDB-D11) The term that means the highest valued alternative given up when a person chooses to engage in an activity is: A) accounting cost. B) dollar cost. C) opportunity cost. D) explicit cost. 12) If a firm can produce a combination of 60 units of X together with 80 units of Y if it produces 70 units of X, the firm can only produce 60 units of Y, thus the opportunity cost to produce 10 more units of X is: A) 20 units of Y. B) 10 units of X. C) two units of Y. D) one-half a unit of X. 13) Increasing opportunity cost along a bowed out production possibilities frontier occurs because: A) of inefficient production. B) of ineffective management by entrepreneurs. C) some factors of production are not equally suited to producing both goods or services. D) of the scarcity of factors of production. 14) The slope or rate of change along a production possibilities frontier: A) has no economic relevance or meaning. B) is always constant. C) is always varying. D) measures the opportunity cost of producing one more unit of a good. 15) At full employment, an economy that wants to produce more war goods: A) must wait until resource supplies have increased. B) must increase the production of consumer goods. C) must cut back on the production of other goods. D) must be attempting the impossible. 16) A production situation with constant opportunity cost would be graphed as : A) a negatively sloped curve bowed out from the origin. B) a positively sloped straight line. C) a negatively sloped curve bowed in toward the origin. D) a negatively sloped straight line. 17) Production possibilities frontier model shows that: A) if consumers decide to buy more of a product its price will increase. B) a market economy is more efficient in producing goods and services than is a centrally planned economy. C) economic growth can only be achieved by free market economies. D) if all resources are fully and efficiently utilized, more output of good X can only be achieved