Quiz One Old Exam questions

Question 1

1. Bob decided to go on a year-long cruise he won after graduation instead of working, although he got an offer from company A with a salary of $40,000 per year and an offer from company B with a salary of $35,000 per year. What is the opportunity cost per year for Bob to be on the cruise?

a. $5,000
b. $40,000
c. $35,000
d. $75,000

Answer 1

b. $40,000

Question 2

2. Which of the following statements is true?
   a. A point of allocative efficiency is also a point of production efficiency
   b. A point of production efficiency is also a point of allocative efficiency
   c. Both a and b are true
   d. Both a and b are false

Answer 2

A point of allocative efficiency is also a point of production efficiency

Question 3

3. If the marginal cost of a good is less than the marginal benefit, then
   a. We have not achieved allocative efficiency.
   b. We should produce more of the good.
   c. We should produce less of the good.
   d. We cannot tell whether to produce more or less.
   e. both (a) and (b)

Answer 3

e. both (a) and (b)

Question 4

22 If a baseball ticket costs $25 and a basketball ticket cost $50, then the opportunity cost of 2 baseball tickets is

a. 2 basketball tickets.
b. 1 basketball ticket.
c. ½ basketball ticket.
d. 4 basketball tickets.

Answer 4

1 basketball ticket.

Question 5

10. Which of the following is NOT considered to be a resource (or input factor) by economists?

a. land
b. labor
c. capital
d. entrepreurship
e. none of the above

Answer 5

e. none of the above

Question 6

25. A point outside (i.e., to the northeast of) the Production Possibilities Frontier
    a. is currently attainable
    b. is not currently attainable
    c. represents unemployment
    d. none of the above.

Answer 6

b. is not currently attainable

Question 7

23. Which of the following is the best example of a positive statement?

a. Equal distribution of national income is a desirable goal for society.
b. A wage rate of $8.00 per hour is degrading; therefore the minimum wage should be increased to $9.50 per hour.
c. It is bad for the country to import goods.
d. If import prices rise, consumers will buy fewer imports.

Answer 7

d. If import prices rise, consumers will buy fewer imports.