Macro Economics Chapter 02 Quiz

Question 1

The opportunity cost of an action is:
A) the value of the best opportunity that must be sacrificed in order to take the action.
B) the total time spent by all parties in carrying out the action.
C) the cost of all alternative actions that could have been taken, added together.
D) the monetary payment the action required.

Answer 1

A

Question 2

A good or service that is forgone by choosing one alternative over another is called a(n): 
A) accounting cost.
B) explicit cost.
C) opportunity cost.
D) historical cost.

Answer 2

C

Question 3

The opportunity cost of watching television is:
A) all of the alternative programs that appear on other stations.
B) the alternative use of the time foregone by watching the program.
C) zero if it benefits you.
D) zero because there is no money expenditure involved.

Answer 3

B

Question 4

Which of the following does not illustrate opportunity cost?
A) If I study, I must give up going to the football game.
B) If I buy a computer, I must do without a 35” television.
C More consumer spending now means more spending in the future.
D) If I spend more on clothes, I must spend less on food.

Answer 4

C

Question 5

When the opportunity cost of producing carrots increases as more carrots are produced, then: A) the production possibilities curve becomes positively sloped.
B) resources are equally suited to the production of carrots and to other goods.
C) the law of increasing costs is present.
D) no more carrots will be produced. production possibilities curve is a straight line.
E) the production possibilities curve is a straight line.

Answer 5

C

Question 6

In economics, the term marginal refers to:
A) holding everything else constant in the analysis.
B) the satisfaction a consumer receives from a good.
C) the change or difference from a current situation.
D) man-made resources as opposed to natural resources.

Answer 6

C

Question 7

Any point on the production possibilities curve illustrates:
A) a non-feasible production combination.
B) minimum production combinations.
C) economic growth.
D) maximum production combinations.

Answer 7

D

Question 8

The production possibilities curve demonstrates the basic economic principle that:
A) market-based economies are more efficient.
B) to produce more of any one thing, assuming full employment, the economy must produce less of something else.
C) to produce more consumption goods this year requires the production of more capital goods this year.
D) supply will determine demand in the economy.
E) the production of more capital goods this year will cause the economy to produce less consumption goods next year.

Answer 8

B

Question 9

Which of the following is true about the production possibilities curve when a technological progress occurs? The curve:
A) becomes steeper.
B) shifts inwards to the left.
C) does not change.
D) shifts outward to the right.
E) becomes flatter at one end and steeper at the other end.

Answer 9

C