Understanding Economics A Contemporary Perspective 8th Edition by Mark Lovewell Test bank

 
43.Which of the following is not an illustration of the notion of opportunity cost? 
 


A. A growing economy can produce more ice cream and more ice cream cones at the same time.
 
B. If I buy a pizza, I will not be able to afford a movie.
 
C. Resources devoted to the production of computers are not available for the production of computer software.
 
D. The land on which a Saskatchewan farmer plants wheat is not available for barley production.
 
E. The more time it takes to commute to work, the less time is available for other activities.
 
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
 
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
 
    
 
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
 
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
 
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
 
49.The production possibilities curve: 
 


A. shows all levels of production that are consistent with a stable price level
 
B. indicates that any combination of products lying outside the curve is undesirable
 
C. shows how an economy actually employs its resources
 
D. shows all combinations of products that are most preferred by consumers
 
E. is a frontier between all combinations of products that can be produced and those combinations that cannot be produced
 
50.Any point inside the production possibilities curve indicates: 
 


A. that resources are imperfectly shiftable among alternative uses
 
B. the presence of inflationary pressures
 
C. that more output could be produced with available resources
 
D. that the economy is saving a part of its income
 
E. that some of an economy's potential output is not desired by consumers
 
    
 
51.At the end of World War II, Canada's economic adjustment from wartime to peacetime can best be described by the movement from: