WorksheetsUnit 1: The Review
Total questions: 25
Worksheet time: 16mins
If the price of an apple is $0.50, the marginal utility per dollar spent for the fifth apple is...
30
40
60
20
The marginal utility per dollar spent on the last orange consumed is 75. If the price of an apple is $0.50, how many apples would Johnny have to consume before he considers purchasing another orange?
2
3
5
4
Which of the following best explains why individuals and societies must make choices when presented with alternatives?
People possess limited knowledge
Resources are scarce
Resources are not fully employed
People are more interested in their own well-being than in society's well-being
Which of the following is an example of a scarce factor of production?
Money
Airplanes
Food
Established Knowledge
Which is an example of a nonrival resource?
Solar energy
Farmland that can be used to grow corn or soybeans
Timber in a forest
National park camping sites that can be reserved by anyone
A power company decides to use wind turbines to provide electricity instead of coal. Which basic economic question does this decision answer in a free market economy?
What goods or services will be produced?
What economic system should be adopted?
How will goods and services be produced?
Who will consume the goods & services?
Compared to a market economy, a command economy has greater...
Government involvement in the allocation of resources
Reliance on prices for allocating scarce resources
consumption of consumer goods
protection of private property rights
Which of the following economic systems primarily relies on prices for allocating resources and goods?
Traditional
Mixed
Command
Free-Market
Because of conflict and political instability in Country Y, millions of its citizens emigrate to Country X. Which of the following best explains what will happen to Country X's production possibilities curve (PPC)?
Its PPC will not change, but the consumption of goods will decrease
Its PPC will shift inward over time
Its PPC will shift outward over time
It will move to a point inside its PPC, indicating slower growth
Which of the following will enable an economy to reach point F on the diagram?
Fully allocating currently available and unemployed resources efficiently
Creating or discovering new resources
Trade
Fully allocating currently available and unemployed resources efficiently
The data describes a bakery's daily PPC for doughnuts and sweet rolls. Which of the following is true?
The PPC illustrates a decreasing opportunity cost
The PPC illustrates an increasing opportunity cost
The PPC illustrates constant opportunity cost
Producing 100 doughnuts and 10 sweet rolls illustrates efficiency in production
If Nation X produces coffee at a higher opportunity cost than Nation Y, which of the following is true?
Nation Y must have a comparative advantage in producing coffee
There is insufficient information to determine both absolute and comparative advantage
Nation X must have an absolute advantage in producing coffee
Nation Y must have an absolute advantage in producing coffee
Nation Alpha can produce either 3 units of good X or 1 unit of good Y with one hour of labor, whereas nation Beta can produce either 4 units of good X or 2 units of good Y with one hour of labor. Assuming that labor is the only input, which of the following is true?
Alpha has both an absolute and comparative advantage in the production of Good Y
Beta has a comparative advantage in the production of Good X
Alpha has an absolute advantage in the production of Good Y
Beta has an absolute advantage in the production of Good X
Cost-benefit analysis assumes rational agents do which of the following?
Always make a decision that is best for society
Compare additional costs and additional benefits when making a decision
Consider only what they will lose when making a decision
Always make the same decision
Oren’s father tells Oren he can have one dessert after dinner. He can choose from a scoop of ice cream, a slice of apple pie, a cup of chocolate pudding, or a piece of fruit. Oren prefers chocolate pudding to a piece of fruit; he prefers apple pie to chocolate pudding; and he prefers ice cream to apple pie. If Oren chooses a scoop of ice cream, what is his opportunity cost?
A scoop of ice cream
A slice of Apple Pie
A piece of fruit, a cup of pudding, and a slice of pie
A cup of Chocolate Pudding
Larry spends his whole allowance on pretzels ($1/bag) and ice cream cones ($2 each). With his current consumption bundle, the marginal utility for pretzels is 20 and 60 for ice cream cones. What should he do to maximize his utility?
Buy more of both goods
Buy fewer pretzels and more ice cream cones
Buy more pretzels and fewer ice cream cones
Buy less of both goods
Individuals and societies make choices regarding which goods and services will be produced and consumed because of which basic economic concept?
(a)
The amount of Product Z that must be foregone (given up) in order to obtain some amount of Product Y is called what?
Marginal product
Income effect
Substitution effect
Opportunity cost
Using Marginal Analysis, when will an individual consume one additional unit of a good?
Whenever they can
If additional benefit is greater than additional cost
If total benefit is greater than total cost
If additional benefit is less than additional cost
Which is a defining characteristic of a capitalist (market) economy?
Private ownership and protection of property rights
Fair distribution of income and low income taxes
Equality of opportunity
Efficient allocation of resources
Which of the following describes a factor of production that is not fully scarce and that can be used simultaneously in the production of more than one good?
Hey so do you guys remember this question from the quiz?
This one it appears most people got correct the first time?
Yeah so it turns out I read the question wrong when we graded it... so the actual answer was...
Basic knowledge tat enhances the organization of all manufacturing assembly lines
Which of the following statements describes an economy confronting scarcity?
An economy can produce a limitless amount of all goods
Scarcity is eliminated by government provision of goods
If more of one good is produced, less of another good must be produced
All individuals are able to satisfy their consumption desires
Assume an economy uses one input, labor, to produce two goods, X and Y, with constant opportunity cost. Which of the following would cuase a parallel shift to the right of the PPC?
An increase in the productivity of labor with respect to producing good X
A reduction in the unemployment of labor
An increase in the amount of labor available for production
An increase in the demand for good X and good Y
At her current level of consumption, Leslie Knope is willing to pay up to $1.50 for a bottle of water and up to $1,500 for a diamond ring. Why?
Her Total Utility of diamond rings is greater than the Total Utility of water
Her Marginal Utility of a bottle of water is greater than the Marginal Utility of a diamond ring
Her Marginal Utility for a bottle of water is less than the Marginal Utility of a diamond ring
She is irrational and does not understand that water is more important than a diamond
If Marginal Utility (MU) is falling but positive, what does that mean for Total Utility (TU)?
TU decreases at an increasing rate
TU remains constant
TU increases at a decreasing rate
TU increases at an increasing rate
