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.   Decrease current consumption and reduce production of capital goods
B.   Increase production of capital goods and increase consumption
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.   Governmental rule actually results in greater good than is apparent at the time
B.   If each person looks out for himself or herself, then chaos will inevitably ensue
C.   Traditional religion is an appropriate guide for human behavior
D.   Pursuit of self-interest promotes economic well-being for society as a whole
Question #3
Economists define efficiency as
A.   The presence of surplus
B.   The absence of waste
C.   Output maximization
D.   Input minimization
Question #4
The central question in economics is how to
A.   Use government agencies
B.   Induce people to want less
C.   Make the best use of scarce resources
D.   Increase human knowledge
Question #5
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 #6
The problem of scarcity
A.   Has been "cooked up" by disenchanted anti-capitalists
B.   Exists because resources are limited relative to wants
C.   Is caused by artificially high prices
D.   Is solved by promoting economic growth
Question #7
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.   Automatic forces of supply and demand
D.   Central planners
Question #8
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.   Political leaders into radical and conservative camps each year.
C.   The parts of a complex task among different workers
D.   The three coordination decisions among different sets of planners
Question #9
Because of scarcity, every economic decision involves
A.   An increasing cost
B.   A tradeoff or choice
C.   A money payment
D.   A free good

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