IVY software FECN review UPDATED
ACTUAL Questions and CORRECT
Answers
If corn producer A is more productive relative to corn producer B, then economists say that corn
producer A
Select one:
a. Chicago
b. New York
c. neither Chicago nor New York
d. not enough information to answer the question - CORRECT ANSWER - New York
Assume a production possibilities frontier for pickup trucks and big Mac hamburgers. The
economy is producing 60 big Mac hamburgers and 50 pickup trucks (point 60, 50). What is the
opportunity cost of producing an additional 20 big Mac hamburgers (point 80, 30)?
a. Zero pickup trucks
b. Two pickup trucks
c. Five pickup trucks
d. 20 pickup trucks
e. None of the above. - CORRECT ANSWER - 20 pickup trucks
When an economy does not fully use its factors of production, then it ends up at a location
_____the production possibilities frontier.
Select one:
a. Inside
b. Outside
c. On
d. None of the above. - CORRECT ANSWER - inside
, A graph that shows the combinations of two goods that the economy can produce given the
available scarce resources and available technology is called a
Select one:
a. demand curve
b. supply curve
c. Edgeworth box
d. production possibilities frontier. - CORRECT ANSWER - production possibilities
frontier
Economists frequently say there's no such thing as a free lunch. What do they mean by this?
Select one:
a. Your friends are cheap and never offer you lunch for free
b. Even if someone literally offers you a free lunch, there is an opportunity cost to the resources
that are used to produce your free lunch
c. Productive resources are examples of natural monopolies
d. Resources are never free. - CORRECT ANSWER - Even if someone literally offers you
a free lunch, there is an opportunity cost to the resources that are used to produce your free lunch
In words, what does it mean when an economic consultant states: Café Ana's elasticity of supply
of fine meals is equal to +3?
Select one:
a. If Café Ana's quantity supplied of fine meals increases by 1 percent, then their price increases
by 3 percent.
b. If the market price increases by 3 percent, then Café Ana's quantity supplied of fine meals will
increase by 1 percent.
c. If Café Ana's quantity supplied of fine meals increases 3 percent, then their price will increase
by 1 percent.
d. If the market price increases by 1 percent, then Café Ana's quantity supplied of fine meals will
increase by 3 percent.
Feedback - CORRECT ANSWER - If the market price increases by 1 percent, then Café
Ana's quantity supplied of fine meals will increase by 3 percent.
ACTUAL Questions and CORRECT
Answers
If corn producer A is more productive relative to corn producer B, then economists say that corn
producer A
Select one:
a. Chicago
b. New York
c. neither Chicago nor New York
d. not enough information to answer the question - CORRECT ANSWER - New York
Assume a production possibilities frontier for pickup trucks and big Mac hamburgers. The
economy is producing 60 big Mac hamburgers and 50 pickup trucks (point 60, 50). What is the
opportunity cost of producing an additional 20 big Mac hamburgers (point 80, 30)?
a. Zero pickup trucks
b. Two pickup trucks
c. Five pickup trucks
d. 20 pickup trucks
e. None of the above. - CORRECT ANSWER - 20 pickup trucks
When an economy does not fully use its factors of production, then it ends up at a location
_____the production possibilities frontier.
Select one:
a. Inside
b. Outside
c. On
d. None of the above. - CORRECT ANSWER - inside
, A graph that shows the combinations of two goods that the economy can produce given the
available scarce resources and available technology is called a
Select one:
a. demand curve
b. supply curve
c. Edgeworth box
d. production possibilities frontier. - CORRECT ANSWER - production possibilities
frontier
Economists frequently say there's no such thing as a free lunch. What do they mean by this?
Select one:
a. Your friends are cheap and never offer you lunch for free
b. Even if someone literally offers you a free lunch, there is an opportunity cost to the resources
that are used to produce your free lunch
c. Productive resources are examples of natural monopolies
d. Resources are never free. - CORRECT ANSWER - Even if someone literally offers you
a free lunch, there is an opportunity cost to the resources that are used to produce your free lunch
In words, what does it mean when an economic consultant states: Café Ana's elasticity of supply
of fine meals is equal to +3?
Select one:
a. If Café Ana's quantity supplied of fine meals increases by 1 percent, then their price increases
by 3 percent.
b. If the market price increases by 3 percent, then Café Ana's quantity supplied of fine meals will
increase by 1 percent.
c. If Café Ana's quantity supplied of fine meals increases 3 percent, then their price will increase
by 1 percent.
d. If the market price increases by 1 percent, then Café Ana's quantity supplied of fine meals will
increase by 3 percent.
Feedback - CORRECT ANSWER - If the market price increases by 1 percent, then Café
Ana's quantity supplied of fine meals will increase by 3 percent.
