Economics 002 - Principles of Economics II » Spring 2021 » Chapter 2 Practice Quiz
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Question #1
Suppose an acre of land yields 100 bushels of corn and that one bushel of corn provides enough seed for one-quarter of an acre of land. The opportunity cost of consuming another 100 bushels of corn today is
A.
2.5 bushels of corn next year.
B.
25 bushels of corn next year.
C.
10 bushels of corn next year.
D.
100 bushels of corn next year.
Question #2
When a society takes increasing amounts of resources and applies them to the production of a specific good, resulting in increasing opportunity costs for each additional unit produced, which of the following applies?
A.
the law of supply
B.
the law of scarcity
C.
the law of increasing additional costs
D.
the law of demand
Question #3
Which of the following statements is FALSE about opportunity cost?
A.
John wants a burger and fries. The concept of opportunity cost applies even though he has enough funds to buy both.
B.
Opportunity cost is the next best alternative.
C.
Cost is always foregone opportunity.
D.
Opportunity cost exists only for goods with monetary values.
Question #4
In economic terminology, when a resource is used to produce output it is referred to as
A.
a service.
B.
a factor of production.
C.
a fifth element.
D.
an intangible.
Question #5
If a CEO can type faster than her secretary, then
A.
the CEO has a comparative advantage in typing.
B.
the CEO has neither a comparative advantage in typing, nor in management.
C.
the CEO should still continue performing CEO duties as well as typing since he has a comparative advantage in both management, and typing.
D.
the CEO should still continue performing CEO duties since the CEO has a comparative advantage in management, and the secretary should continue typing.
Question #6
Samia has decided that with the two hours in between classes she can do one of 3 things. She has ranked her choices, from highest to lowest as, (1) chat with her friends, (2) study economics or (3) take a nap. The opportunity cost of chatting with her friends is
A.
the value of studying economics, the next best use of time.
B.
zero since she does not pay her friends to talk to her.
C.
the combined value of studying economics and taking a nap.
D.
the value of chatting with her friends.
Question #7
Economic growth can be pictured in a production possibilities curve diagram by
A.
making the production possibilities curve less bowed out.
B.
making the production possibilities curve more bowed out.
C.
shifting the production possibilities curve in.
D.
shifting the production possibilities curve out.
Question #8
If a person can make $70,000 as an accountant, $60,000 as a chef, $20,000 as a mechanic, and nothing as an opera singer, he or she has a comparative advantage in
A.
opera singing.
B.
being a mechanic.
C.
being a chef.
D.
accounting.
Question #9
In constructing a production possibilities curve, all of the following are assumed EXCEPT
A.
resources are fully employed.
B.
the state of technology is improving.
C.
the quantity and quality of resources being used is fixed.
Question #10
Opportunity cost is defined as
A.
the return from a given unit of labor.
B.
the least-costly means to produce output.
C.
the value of the next-best alternative that must be sacrificed to attain a want.
D.
the value of the output currently received by an individual or a corporation.
Question #11
The law of increasing opportunity cost implies that
A.
producing additional units of one good results in increasing amounts of lost output of the other good.
B.
the production possibilities curve will be a straight line.
C.
producing additional units of one good results in proportionately smaller reductions in output of the other good.
D.
the society will be producing on its production possibilities curve.
Question #12
All of the following are examples of physical capital EXCEPT
A.
a hydroelectric power plant.
B.
machinery.
C.
buildings.
D.
company stocks and bonds.
Question #13
An irrigation system is installed on a farm in North Dakota. This is an example of which factor of production?
A.
physical capital
B.
land
C.
labor
D.
human capital
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