Understanding Economics A Contemporary Perspective 8th Edition by Mark Lovewell Test bank
Lovewell - Chapter 01 #43
Topic: 01-07 Opportunity Cost
Type: Application
44.The notion of opportunity cost is best defined as:
A. the monetary price of any productive resource
B. the amount of labour that must be used to produce one unit of any product
C. the monetary price of any product
D. the utility that could have been gained by choosing an action's best alternative
E. the number of units of a product that are available to be purchased
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-02 Explain how economists specify economic choice; including the production choices an entire economy faces; as demonstrated by the production possibilities model
Lovewell - Chapter 01 #44
Topic: 01-07 Opportunity Cost
Type: Definition
45.The production possibilities curve illustrates the basic principle that:
A. the production of more of any one item will in time require smaller and smaller sacrifices of other items
B. an economy automatically seeks that level of output that employs all of its resources
C. if all the resources of an economy are fully used, more of one item could be produced only if less of another item is produced
D. any production point below the curve reflects high opportunity cost
E. any production point above the curve reflects low opportunity cost
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-02 Explain how economists specify economic choice; including the production choices an entire economy faces; as demonstrated by the production possibilities model
Lovewell - Chapter 01 #45
Topic: 01-08 The Production Possibilities Curve
Type: Definition
Lovewell - Chapter 01
46.A total output of 3 TVs and 4 stereos:
A. would never be chosen because the economy is capable of producing a larger total output
B. represents the full employment of available resources
C. involves the employment of an economy's scarce resources at less than their full capacity
D. is unobtainable in this economy
E. would always be chosen because this is the product combination that gives the economy's citizens the most satisfaction
Difficulty: Hard
Learning Objective: 01-02 Explain how economists specify economic choice; including the production choices an entire economy faces; as demonstrated by the production possibilities model
Lovewell - Chapter 01 #46
Topic: 01-08 The Production Possibilities Curve
Type: Numerical
47.To produce a total output of 3 TVs and 13 stereos, this economy must:
A. undergo an outward shift in its production possibilities curve
B. ignore the notion of opportunity cost
C. distribute its available resources more efficiently among alternative uses
D. achieve the full employment of available resources
E. leave some of its available resources idle
Difficulty: Hard
Learning Objective: 01-02 Explain how economists specify economic choice; including the production choices an entire economy faces; as demonstrated by the production possibilities model
Lovewell - Chapter 01 #47
Topic: 01-08 The Production Possibilities Curve
Type: Numerical
48.Assume that a change in government policy results in the increased production of all types of products. It can be concluded that the:
A. economy was not fully employing its resources before the policy change
B. economy's production possibilities curve has shifted to the left as a result of the policy change
C. economy's production possibilities curve does not bow out to the right
D. law of increasing opportunity costs does not apply in this society
E. economy's resources are freely available
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-02 Explain how economists specify economic choice; including the production choices an entire economy faces; as demonstrated by the production possibilities model
Lovewell - Chapter 01 #48
Topic: 01-08 The Production Possibilities Curve
Type: Application
49.The production possibilities curve: