Straighterline Microeconomics Exam Complete Questions and Answers 100% verified | 2024
the statement "there's no such thing as a free lunch" arises from the economic concept of: - Correct Answer-opportunity cost
economics deals with the ideas of NOT: - Correct Answer-
buying and selling
True or False. Choosing to spend resources on one item rather than on the next-best option is an example of the concept of the invisible hand. - Correct Answer-False
The production possibility curve relies on which of the following assumptions? - Correct Answer-all resources are fully utilized
True or false. In the production possibilities frontier model, the bowing of the curve out from the origin is caused by limited resources. - Correct Answer-False pg. 1 professoraxe l True or false. An overall increase in available resources (for instance, growth in the labor market) will cause the production possibilities frontier curve to shift outward. - Correct Answer-True
Investment in a business is an example of the factor of production known as: - Correct Answer-capital
True or false. The form of income paid for entrepreneurship factor of production is known as profit. - Correct Answer-True
Scarcity requires all economic systems to answer three basic questions. One of these questions is: - Correct Answer-For whom are the outputs of production produced?
A ____________ economy relies on incentives and the self-
interested behavior of individuals to direct production and consumption through "voting their dollars". - Correct Answer-
market
True or false. A traditional economy relies on a centralized government authority to guide and direct production and consumption decisions. - Correct Answer-False pg. 2 professoraxe l Assume Mexico and the United States have labor forces of equal size (for simplicity), and operate in an environment of constant costs. Each nation can produce beans and rice, but at
different efficiency levels. Assume pre-specialization levels as follows: US: (pre specialization) 12 rice, 12 beans; (post-specialization) 24 beans, 0 rice
Mexico: (pre-specialization) 8 rice, 4 beans; (post-
specialization) 16 rice, 0 beans.
In this case, what is Mexico's opportunity-cost ratio (R=rice, B=beans)? - Correct Answer-2R = 1B
If the cost of an item to Producer A from Producer B is ___________ Producer A's cost and greater than Producer B's cost, both parties will gain from trade. - Correct Answer-less than
True or false. The presence of increasing opportunity costs suggests that the production possibilities curve will be bowed outward from the origin. - Correct Answer-True pg. 3 professoraxe l the statement "economics is driven by limited resources" is related to which economic concept? - Correct Answer-scarcity
choosing to spend resources on one item rather than on the next-best option is an example of the concept of: - Correct Answer-opportunity cost
True or false. The production possibility curve relies on the assumption that technology is improving every day. - Correct Answer-False
in the production possibilities frontier model, the bowing of the curve out from the origin is caused by: - Correct Answer-
the law of increasing opportunity cost
An economic system in which custom and history direct what is produced, and how it is produced, is known as a: - Correct Answer-traditional economy
A ___________ economy relies in a strong centralized authority to determine how goods are produced and distributed. - Correct Answer-command pg. 4 professoraxe l
the statement "there's no such thing as a free lunch" arises from the economic concept of: - Correct Answer-opportunity cost
economics deals with the ideas of NOT: - Correct Answer-
buying and selling
True or False. Choosing to spend resources on one item rather than on the next-best option is an example of the concept of the invisible hand. - Correct Answer-False
The production possibility curve relies on which of the following assumptions? - Correct Answer-all resources are fully utilized
True or false. In the production possibilities frontier model, the bowing of the curve out from the origin is caused by limited resources. - Correct Answer-False pg. 1 professoraxe l True or false. An overall increase in available resources (for instance, growth in the labor market) will cause the production possibilities frontier curve to shift outward. - Correct Answer-True
Investment in a business is an example of the factor of production known as: - Correct Answer-capital
True or false. The form of income paid for entrepreneurship factor of production is known as profit. - Correct Answer-True
Scarcity requires all economic systems to answer three basic questions. One of these questions is: - Correct Answer-For whom are the outputs of production produced?
A ____________ economy relies on incentives and the self-
interested behavior of individuals to direct production and consumption through "voting their dollars". - Correct Answer-
market
True or false. A traditional economy relies on a centralized government authority to guide and direct production and consumption decisions. - Correct Answer-False pg. 2 professoraxe l Assume Mexico and the United States have labor forces of equal size (for simplicity), and operate in an environment of constant costs. Each nation can produce beans and rice, but at
different efficiency levels. Assume pre-specialization levels as follows: US: (pre specialization) 12 rice, 12 beans; (post-specialization) 24 beans, 0 rice
Mexico: (pre-specialization) 8 rice, 4 beans; (post-
specialization) 16 rice, 0 beans.
In this case, what is Mexico's opportunity-cost ratio (R=rice, B=beans)? - Correct Answer-2R = 1B
If the cost of an item to Producer A from Producer B is ___________ Producer A's cost and greater than Producer B's cost, both parties will gain from trade. - Correct Answer-less than
True or false. The presence of increasing opportunity costs suggests that the production possibilities curve will be bowed outward from the origin. - Correct Answer-True pg. 3 professoraxe l the statement "economics is driven by limited resources" is related to which economic concept? - Correct Answer-scarcity
choosing to spend resources on one item rather than on the next-best option is an example of the concept of: - Correct Answer-opportunity cost
True or false. The production possibility curve relies on the assumption that technology is improving every day. - Correct Answer-False
in the production possibilities frontier model, the bowing of the curve out from the origin is caused by: - Correct Answer-
the law of increasing opportunity cost
An economic system in which custom and history direct what is produced, and how it is produced, is known as a: - Correct Answer-traditional economy
A ___________ economy relies in a strong centralized authority to determine how goods are produced and distributed. - Correct Answer-command pg. 4 professoraxe l
