Question 1

The main effect of employment discrimination is
A)Unemployment.
B)Underemployment.
C)Greater efficiency.
D)Greater production.

Accepted Answer

B

Question 2

-Assuming the inner curve is our current production possibilities frontier, our economy usually operates at ____.
A)Point P
B)Point O
C)Point N
D)Point L

Accepted Answer

Point O represents the most efficient use of resources in an economy, where all resources are fully and efficiently utilized without any waste.

Question 3

Which statement is true?
A)It is easier to attain full employment than full production.
B)Employment discrimination no longer exists in the U.S.labor market.
C)We are usually operating on our production possibilities frontier.
D)None of these statements are true.

Accepted Answer

A

Question 4

-Which movement between two points represents economic growth?
A)J to K
B)K to L
C)L to M
D)M to N

Accepted Answer

Economic growth is represented by a movement from a point on the production possibility frontier (PPF) to a point further out on the PPF, indicating an increase in the capacity to produce goods and services. K to L represents such a movement, indicating economic growth.

Question 5

Which one of the following is the most accurate?
A)In recent years our economy was at full employment until 2010.
B)Our economy operated outside of its production possibilities curve in 2009 and 2010.
C)Our economy is currently operating on its production possibilities curve.
D)Our economy is currently operation inside its production possibilities curve.

Accepted Answer

The production possibilities curve represents the maximum output that an economy can achieve given its resources and technology. If an economy is operating inside the curve, it means it's not using all its resources efficiently and could produce more. Therefore, option D is the most accurate as it indicates that our economy is currently not operating at its full potential.

Question 6

Statement I. When U.S. unemployment rate is five percent, it attains full employment. Statement II. Full employment and full production mean virtually the same thing.
A)Statement I is true and statement II is false.
B)Statement II is true and statement I is false.
C)Both statements are true.
D)Both statements are false.

Accepted Answer

While Statement I is true, Statement II is false. Full employment and full production do not mean the same thing. Full employment refers to the employment level at which everyone who is able and willing to work is employed, and there is no involuntary unemployment. On the other hand, full production refers to a production level at which all available resources in an economy are utilized efficiently to produce goods and services. Therefore, even though a country may have full employment, it may not necessarily be at full production if all resources are not being used efficiently.

Question 7

Our economy ______________ operates on its production possibility curve.
A)always
B)sometimes
C)never

Accepted Answer

The economy may operate on its production possibility curve at times, but it is not a guarantee that it will always operate on the curve due to unpredictable economic factors such as changes in input prices, technology advancements or innovation, resource availability, and external shocks. Therefore, the economy may sometimes operate inside or outside of the production possibility curve depending on the prevailing conditions.

Question 8

In order to raise our rate of economic growth we would need to
A)increase the level of capital.
B)reduce the level of labor.
C)spend more on military goods.
D)spend more on consumer goods.

Accepted Answer

Increasing the level of capital, such as investment in equipment, technology, and infrastructure, can lead to increased productivity and ultimately higher economic growth. Reducing the level of labor, on the other hand, would likely decrease economic growth as it would reduce the workforce and limit production. Spending more on military or consumer goods may provide short-term boosts to certain sectors of the economy, but they are not likely to have a sustained impact on overall economic growth.

Question 9

Which statement is true?
A)The economic problem is limited to poverty.
B)Scarcity is no longer an economic problem in the United States.
C)If we all had more money there would be less scarcity.
D)None of these statements are true.

Accepted Answer

The economic problem is not limited to poverty, but rather a fundamental issue of limited resources and unlimited wants. Scarcity is still an economic problem in the United States and everywhere else in the world. Having more money may provide temporary relief from scarcity for an individual, but it does not eliminate the overall issue of scarcity.

Question 10

Our economy would be operating at full employment with labor unemployment rate of ___ percent and a capacity utilization rate of _____ percent.
A)5; 95
B)5; 85
C)10; 95
D)10; 85

Accepted Answer

The answer of Our economy would be operating at full...

Question 11

Statement I. Entrepreneurial ability is not a resource. Statement II. Virtually all of our resources are buried under the ground.
A)Statement I is true and statement II is false.
B)Statement II is true and statement I is false.
C)Both statements are true.
D)Both statements are false.

Accepted Answer

The answer of Statement I. Entrepreneurial ability is not a...

Question 12

In our economy
A)there is no need to economize.
B)we rarely have to economize.
C)only the rich have to.
D)nearly everyone has to economize.

Accepted Answer

In a modern economy, resources are limited and consumers have unlimited wants and needs. Therefore, nearly everyone has to economize in order to make the most of their limited resources and satisfy their needs and wants. This applies to individuals, businesses, and even governments.

Question 13

Statement I. Employment discrimination causes underemployment. Statement II. The concept of opportunity cost has little validity in the global economy.
A)Statement I is true and statement II is false.
B)Statement II is true and statement I is false.
C)Both statements are true.
D)Both statements are false.

Accepted Answer

Statement I is true as employment discrimination can limit access to job opportunities and result in underemployment. Statement II is false as the concept of opportunity cost is fundamental in understanding the allocation of resources in any type of economy, including the global economy.

Question 14

Which statement is true?
A)On the production possibilities frontier we have zero unemployment.
B)On the production possibilities frontier 95 percent of the labor force is employed.
C)To get out of a recession, we must produce at some point beyond our production possibilities frontier.
D)To have economic growth, we must push the production possibilities frontier inward.

Accepted Answer

The answer of Which statement is true?
A)On the production possibilities...

Question 15

The main reason our standard of living is so much higher than that of India and China is that we have more
A)land.
B)labor.
C)capital.
D)money.

Accepted Answer

The main reason for our higher standard of living is due to our possession of more capital. Capital refers to resources such as factories, machines, and technology, which help increase efficiency and productivity. Having more capital leads to higher economic growth, which ultimately results in a higher standard of living for citizens. While land and labor are also important factors in creating wealth, capital plays the most significant role in modern economic development. Money, on the other hand, is simply a means of exchange and does not directly contribute to economic growth or an increase in standard of living.

Question 16

We temporarily operated outside our production possibilities frontier in
A)1933.
B)1943.
C)1973.
D)1982.

Accepted Answer

The United States operated outside its production possibilities frontier in 1943 due to the massive mobilization of resources for World War II, which pushed economic production beyond normal capacity.

Question 17

Which statement is true?
A)Entrepreneurial ability is in short supply in the U.S.
B)Land, labor and capital may be considered passive resources.
C)The concept of opportunity cost is irrelevant when there is scarcity.
D)None of these statements are true.

Accepted Answer

Land, labor and capital are passive in the sense that they do not have the ability to make decisions on their own. They need to be combined with entrepreneurial ability to create value. Option A is not true as the U.S. has a thriving startup culture. Option C is incorrect as opportunity cost becomes relevant precisely because of scarcity.

Question 18

The term "the affluent society" was coined by
A)Michael Harrington.
B)John Kenneth Galbraith.
C)Karl Marx.
D)Adam Smith.

Accepted Answer

The term "the affluent society" was coined by economist and public intellectual John Kenneth Galbraith in his 1958 book of the same name. In the book, Galbraith argued that America had moved beyond the problem of poverty and was now facing new challenges of excess and overconsumption in a wealthy and affluent society.

Question 19

Each of the following is an example of an economic resource except
A)land.
B)money.
C)capital.
D)labor.

Accepted Answer

Money is not considered an economic resource. Money is a medium of exchange that is used to facilitate transactions involving economic resources. Land, capital, and labor are all considered economic resources as they are necessary for the production of goods and services.

Question 20

Which statement is true?
A)We are usually inside our production possibilities curve.
B)We are usually outside our production possibilities curve.
C)We are usually on our production possibilities curve.
D)None of the statements are true.

Accepted Answer

The answer of Which statement is true?
A)We are usually inside...

Quiz 2: Resource Utilization

The main effect of employment discrimination is

-Assuming the inner curve is our current production possibilities frontier, our economy usually operates at ____.

Which statement is true?

-Which movement between two points represents economic growth?

Which one of the following is the most accurate?

Statement I. When U.S. unemployment rate is five percent, it attains full employment. Statement II. Full employment and full production mean virtually the same thing.

Our economy ______________ operates on its production possibility curve.

In order to raise our rate of economic growth we would need to

Which statement is true?

Our economy would be operating at full employment with labor unemployment rate of _ percent and a capacity utilization rate of ___ percent.

Statement I. Entrepreneurial ability is not a resource. Statement II. Virtually all of our resources are buried under the ground.

In our economy

Statement I. Employment discrimination causes underemployment. Statement II. The concept of opportunity cost has little validity in the global economy.

Which statement is true?

The main reason our standard of living is so much higher than that of India and China is that we have more

We temporarily operated outside our production possibilities frontier in

Which statement is true?

The term "the affluent society" was coined by

Each of the following is an example of an economic resource except

Which statement is true?