2. 2
THE ECONOMIC PROBLEM
C l i c k e r Q u e s t i o n s

3. C CBC has a comparative advantage in producing new drama series
Q1: Suppose that when ABC produces 1 new drama series in a season it gives up the chance to produce 3 new reality shows. This means that _________.
A the opportunity cost of a new drama series is 1/3 of a new reality show
B the opportunity cost of a 1 new reality show is 1/3 of a new drama series
C CBC has a comparative advantage in producing new drama series
D CBC has a comparative advantage in producing new reality shows
B the opportunity cost of a 1 new reality show is 1/3 of a new drama series
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4. A movement up along the PPF B movement down along the PPF
Q2: A country offers a scholarship to high school students with a “B” average. In 2014, the country raised the requirement so that fewer students qualified for the scholarship and at the same time, the country increased spending on health care. Drawing the country’s PPF with university education on the y-axis and health care on the x-axis, the country’s change in spending would be shown as a _________.
A movement up along the PPF
B movement down along the PPF
C shift out of the PPF
D shift in of the PPF.
B movement down along the PPF
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5. Q3: Marginal benefit from a good is the ______.
A opportunity cost of producing one more unit of a good and the opportunity cost increases as production increases
B opportunity cost of producing one more unit of a good and the opportunity cost decreases as production increases
C benefit from consuming one more unit of a good and that benefit increases as consumption increases
D benefit from consuming one more unit of a good and that benefit decreases as consumption increases
D benefit from consuming one more unit of a good and that benefit decreases as consumption increases
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6. C can of soup is constant D pen increases
Q4: A country produces only cans of soup and pens and it is producing at a point on its bowed out PPF. If the country increases the production of soup, the opportunity cost of an additional _________.
A can of soup increases
B can of soup decreases
C can of soup is constant
D pen increases
D pen increases
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7. Q5: The opportunity cost of economic growth is the _____.
A future consumption that a nation gets if it gives up some present consumption
B future consumption that a nation gives up to consume more today
C present consumption that a nation gives up to accumulate capital
D investment that a nation gives up to increase its economic growth
C present consumption that a nation gives up to accumulate capital
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8. B Best Buy makes decisions in the social interest
Q6: 1. In 2012, as Best Buy was having a hard time, all of the following statements about Best Buy are true except ________.
A Best Buy’s decisions affect What, How, and for Whom goods and services get produced
B Best Buy makes decisions in the social interest
C Best Buy makes its decisions at the margin
D Best Buy responds to incentives
B Best Buy makes decisions in the social interest
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9. Q7: In an 8 hour day, Andy can produce either 8 loaves or 24 cakes; Rolfe can produce either 24 loaves or 24 cakes. Andy and Rolfe ________.
A can gain from exchange if Andy specializes in cake production and Rolfe specializes in bread production
B can gain from exchange if Andy specializes in bread production and Rolfe specializes in cake production.
C cannot gain from exchange.
D can exchange but only Rolfe will gain.
B can gain from exchange if Andy specializes in bread production and Rolfe specializes in cake production
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10. A only bread; only cakes
Q8: In an hour, John can produce 20 loaves of bread or 20 cakes while Joe can produce 30 loaves of bread or 15 cakes. The gains from trade will be maximized if John produces _______ and Joe produces _________.
A only bread; only cakes
B only cakes; only bread
C both cakes and bread; only bread
D only cakes; both bread and cakes
B only cakes; only bread
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11. Q9: The term “market” refers to ____.
A only a physical place where buyers and sellers meet
B all locations where buyers and sellers physically meet
C any arrangement that enables buyers and sellers to get information and trade with one another
D trading arrangements that have been approved by the government
C any arrangement that enables buyers and sellers to get information and trade with one another
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12. A more water and the same amount of bread B less bread and more water
Q10: A country is using its resources efficiently to produce bread and water, but the marginal benefit from bread exceeds its marginal cost To achieve allocative efficiency, the country must produce ________.
A more water and the same amount of bread
B less bread and more water
C more bread and the same amount of water
D more bread and less water
D more bread and less water
© 2014 Pearson Education