Econ 102 - Principles of Macroeconomics » Spring 2023 » Circular Flow and PPF Quiz

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

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