Question 1

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 2

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

B

Question 3

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

Accepted Answer

Underemployment is a situation in which workers are employed but not fully utilized, resulting in lower productivity and efficiency.

Question 4

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

There is evidence to support statement I – employment discrimination based on race, gender, age, etc. can limit opportunities for workers and result in their being underemployed. However, statement II is false as the concept of opportunity cost is a fundamental principle in economics that applies to all economies, not just specific ones, and is used to make decisions about the use of scarce resources.

Question 5

-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 6

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

Economizing is the act of making choices and decisions about how we use our limited resources to best satisfy our wants and needs. Since resources are always limited and we have unlimited wants and needs, nearly everyone has to economize to some extent in order to make the most of the resources they have available. Therefore, the best choice is D – nearly everyone has to economize.

Question 7

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

Statement I is partially true. A five percent unemployment rate is typically considered close to full employment, but it does not necessarily mean that everyone who wants a job has one. 
Statement II is false. Full employment refers to the level of employment where everyone who wants a job has one, while full production refers to the level of output produced when all resources are fully utilized. These are related concepts but not the same thing.

Question 8

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

Economies often operate inside their production possibilities curve due to inefficiencies, underutilization of resources, or unemployment.

Question 9

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

Accepted Answer

The economy may not always operate on its production possibility curve because external factors such as natural disasters, political instability, changes in resource availability, or changes in technology can cause shifts in the curve, resulting in the economy operating above or below the curve. Furthermore, decisions made by individuals, businesses, and the government can also affect the position of the production possibility curve. Thus, it is possible for an economy to operate inside or outside the curve, leading to inefficiencies or sustainable economic growth.

Question 10

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 11

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 in itself, but rather a medium of exchange used to acquire resources such as land, capital, and labor.

Question 12

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

Accepted Answer

John Kenneth Galbraith coined the term "the affluent society" in his 1958 book of the same name, where he argued that American society had become so wealthy that it no longer faced the problems of scarcity and poverty that had defined previous eras.

Question 13

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 refers to the fact that resources are limited while human wants and needs are infinite. Scarcity is a fundamental economic problem that still exists in the United States despite its level of development. Lastly, having more money does not eliminate scarcity as it is still subject to the limitations of resources. Therefore, none of the statements given are true.

Question 14

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

Capital refers to the physical and financial assets that are used in the production of goods and services. The higher standard of living in developed countries like the United States is largely due to their greater availability of capital. Capital allows for investments in technology and infrastructure, which lead to productivity gains and overall economic growth. India and China, on the other hand, have less-developed economies with less capital available for investment, which limits their potential for growth and development. While land and labor are important factors in economic growth, it is capital that allows for the highest standard of living.

Question 15

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, which includes machinery, equipment, and technology, can increase productivity and efficiency, leading to economic growth. This can also result in higher wages and more job opportunities. The other choices, reducing labor or spending more on military or consumer goods, may not necessarily result in sustained economic growth.

Question 16

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 considered passive resources because they do not produce anything on their own. They require an entrepreneur, or someone with entrepreneurial ability, to combine and manage them in a way that creates value. Option A is incorrect because research shows that entrepreneurial ability is present, but sometimes not utilized due to factors such as lack of access to capital, markets, and education. Option C is incorrect because opportunity cost refers to the value of the next best alternative foregone, and it is always relevant when there is scarcity.

Question 17

-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 18

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 resource.
Statement...

Question 19

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

A production possibilities curve (PPC) shows the maximum combinations of two goods that can be produced with given resources and technology. If an economy operates on the PPC, it means that it is fully utilizing its resources and producing efficiently. If it operates inside the PPC, it means that it is not fully utilizing its resources and producing inefficiently. Therefore, option D is the most accurate as our economy is currently not operating at full capacity and is producing inside its PPC.

Question 20

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...

Quiz 2: Resource Utilization

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.

The main effect of employment discrimination is

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

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

In our economy

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.

Which statement is true?

Our economy ______________ operates on its production possibility curve.

We temporarily operated outside our production possibilities frontier in

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

The term "the affluent society" was coined by

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

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

Which statement is true?

-Which movement between two points represents economic growth?

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

Which one of the following is the most accurate?

Which statement is true?