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 current consumption and reduce producing capital goods
B.   Increase production of capital goods and reduce consumption
C.   Decrease current consumption and reduce production of capital goods
D.   Increase production of capital goods and increase consumption
Question #2
The concept of the "invisible hand" led Adam Smith to believe that
A.   Governmental rule actually results in greater good than is apparent at the time
B.   Pursuit of self-interest promotes economic well-being for society as a whole
C.   Traditional religion is an appropriate guide for human behavior
D.   If each person looks out for himself or herself, then chaos will inevitably ensue
Question #3
Economists define efficiency as
A.   The presence of surplus
B.   Output maximization
C.   Input minimization
D.   The absence of waste
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 non-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 military goods.
Question #6
The problem of scarcity
A.   Has been "cooked up" by disenchanted anti-capitalists
B.   Is solved by promoting economic growth
C.   Exists because resources are limited relative to wants
D.   Is caused by artificially high prices
Question #7
In a market economy, the decision regarding allocation of resources is made by
A.   Automatic forces of supply and demand
B.   Central planners
C.   Authorities in Washington, D.C.
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 three coordination decisions among different sets of planners
B.   The parts of a complex task among different workers
C.   Political leaders into radical and conservative camps each year.
D.   The production of consumption goods and capital goods among different workers
Question #9
Because of scarcity, every economic decision involves
A.   A free good
B.   A money payment
C.   An increasing cost
D.   A tradeoff or choice

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