Quizzes - BrainMass

1

Economy is based on _________ and is _________.

Free-market transaction, self-organizing

Labour, self-organizing

International transactions, government ruled

Free-market transaction, government ruled

2

What are opportunity costs?

When the economy increases production of a good due to high demand, the cost of hiring new employees

When the economy decreases production of a good due to lack of resources, the cost of finding new opportunities for marketing products.

The benefits given up by not using the resources in the best alternative way

None of the above

3

Which of these are not a characteristic of modern economies?

Self interest

Incentives

Barter systems

Market prices

Market quantities

4

What is the production possibilities boundary (PPB)?

A graph showing various combinations of output that an economy can possibly produce given available factors of production and production technologies.

A graph showing various combinations of input in an economy that can be used to increase production of outputs.

A graph showing the maximum level of a single output than an economy can produce given available factors of production and production technologies.

A graph showing the minimum level of a single input than an economy can use for the maximum production of outputs.

5

What does the production possibilities boundary (PPB) look like when all resources are being used efficiently?

A positive slope, because when all resources are being used efficiently, productivity is always increasing.

A straight line, because when all resources are being used efficiently, productivity for both goods has plateaued.

A negative slope, because when all resources are being used efficiently, producing more of one kind of good requires producing less of the other.

None of the above

6

What happens to the production possibilities boundary (PPB) when the economy is experiencing growth?

The production possibility curve will shift outwards.

The production possibility curve will shift to the right.

The production possibility curve will shift to the left.

here will be no change.

7

What is consumer price index (CPI)?

Price index of the average price paid by consumers for all products they purchase in one year.

Price index of the average price paid by consumers for the typical basket of goods that they buy.

Price index of the total price of all products purchased by a consumer in one year.

None of the above.

8

Who are the demanders of the goods markets?

Individuals from the household sector

The business sector

The government

Privately owned businesses

9

Who are the factor demanders?

Individuals from the household sector

The business sector

The government

B and C

10

Which of the following statements are false?

A producer has absolute advantage when it has a lower resource cost of production.

A producer has comparative advantage when it has lower opportunity cost of producing a good compared to another producer.

A country can have absolute advantage in all goods, but cannot have comparative advantage in all goods.

A country can have no comparative advantage in any goods.

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