Econ 102 - Principles of Macroeconomics » Fall 2022 » Circular Flow and PPF Quiz

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Question #1
In a market economy, the decision regarding allocation of resources is made by
A.   Authorities in Washington, D.C.
B.   Committees from a variety of economic interest groups
C.   Central planners
D.   Automatic forces of supply and demand
Question #2
Economists define efficiency as
A.   Input minimization
B.   The presence of surplus
C.   Output maximization
D.   The absence of waste
Question #3
The problem of scarcity
A.   Is caused by artificially high prices
B.   Exists because resources are limited relative to wants
C.   Has been "cooked up" by disenchanted anti-capitalists
D.   Is solved by promoting economic growth
Question #4
An economy that wants to experience growth should
A.   Increase production of capital goods and increase consumption
B.   Increase production of capital goods and reduce consumption
C.   Decrease current consumption and reduce production of capital goods
D.   Increase current consumption and reduce producing capital goods
Question #5
The concept of the "invisible hand" led Adam Smith to believe that
A.   Traditional religion is an appropriate guide for human behavior
B.   Governmental rule actually results in greater good than is apparent at the time
C.   Pursuit of self-interest promotes economic well-being for society as a whole
D.   If each person looks out for himself or herself, then chaos will inevitably ensue
Question #6
The central question in economics is how to
A.   Increase human knowledge
B.   Make the best use of scarce resources
C.   Induce people to want less
D.   Use government agencies
Question #7
Because of scarcity, every economic decision involves
A.   A tradeoff or choice
B.   An increasing cost
C.   A free good
D.   A money payment
Question #8
Because resources tend to be specialized, increased production of military goods tends to
A.   Decrease the opportunity cost of more military goods.
B.   Change the slope of the production possibilities frontier (PPF)
C.   Increase the opportunity cost of more military goods.
D.   Increase the opportunity cost of more non-military goods.
Question #9
Specialization in the labor market or Division of Labor, usually refers to splitting
A.   The production of consumption goods and capital goods among different workers
B.   The parts of a complex task among different workers
C.   The three coordination decisions among different sets of planners
D.   Political leaders into radical and conservative camps each year.

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