Question 1

The result of government intervention in the market is that

Accepted Answer

A)   Society is always better off.
B)   The production possibilities curve always shifts outward.
C)  Society could be made better or worse off.
D)   Society is always worse off.E) A) and C)
F) C) and D)

Question 2

If population growth is less than output growth for a country,

Accepted Answer

A)   Real GDP has decreased.
B)   Average living standards will decrease.
C)   GDP must have fallen at a fairly rapid rate.
D)   The per capita living standard will increase.E) A) and C)
F) All of the above

Question 3

Education and training are examples of investment in human capital.

Accepted Answer

A) True 
 B)False

Question 4

Externalities measure

Accepted Answer

A)   Only costs of a market activity borne by a third party.
B)   Only benefits of a market activity borne by a third party.
C)   Either costs or benefits of a market activity borne by a third party.
D)   None of the choices are correct.E) A) and C)
F) A) and D)

Question 5

The investment in human capital through education and training can result in

Accepted Answer

A)   Greater productivity.
B)   Low factor mobility.
C)   Less capital-intensive production.
D)   Reduced output per labor hour.E) A) and C)
F) A) and D)

Question 6

The GDP is a measure of the market value of all final goods and services produced in the economy in a given time period.

Accepted Answer

A) True 
 B)False

Question 7

When the production of a good creates external costs,

Accepted Answer

A)   Profits for the producer of the good will be lower.
B)   Production of the good will be lower.
C)   Society's collective well-being will be lower.
D)   The level of environmental pollution will be lower.E) A) and C)
F) B) and C)

Question 8

Which of the following definitely means productivity has increased?

Accepted Answer

A)   More output from fewer workers.
B)   Less output from fewer workers.
C)   More output from more workers.
D)   Less output from more workers.E) A) and C)
F) A) and D)

Question 9

Outsourcing leads to

Accepted Answer

A)   Increases in productivity and increases in total output.
B)   Increases in productivity and decreases in total output.
C)   Decreases in productivity and increases in total output.
D)   Decreases in productivity and decreases in total output.E) A) and D)
F) A) and B)

Question 10

Factor mobility aids in economic development when

Accepted Answer

A)   A region suffers a natural disaster such as an earthquake or tornado.
B)   A technological advance causes some firms to go out of business.
C)   There is an increase in both outsourcing and insourcing.
D)   All of the choices are correct.E) B) and D)
F) A) and B)

Question 11

Regarding increasing productivity, factor mobility is

Accepted Answer

A)   Important in that it helps to fix a stable labor-intensive production process.
B)   Important in that it helps to fix a stable capital-intensive production process.
C)   Important in that it helps to reallocate resources in a dynamic economy.
D)   Not important in either a stable or dynamic economy.E) None of the above
F) All of the above

Question 12

Those who are interested in assessing the relative standard of living of different countries over a given time period are most likely to look at

Accepted Answer

A)   GDP.
B)   Percentage change in GDP.
C)   Population.
D)   Per capita GDP.E) A) and B)
F) None of the above

Question 13

When workers move from one industry to another in response to demand changes, this is an example of

Accepted Answer

A)   Factor quality.
B)   Factor mobility.
C)   Capital stock.
D)   The decreasing investment in human capital.E) None of the above
F) B) and D)

Question 14

As a nation's average education level increases, the nation's level of productivity

Accepted Answer

A)   Increases, and the production possibilities curve shifts to the right.
B)   Decreases, and the nation's production possibilities curve shifts to the left.
C)   Increases, and the nation moves to a new point on the same production possibilities curve.
D)   Decreases, and the nation moves to a new point on the same production possibilities curve. Human and physical capital increase the productivity of a nation's workers.E) B) and C)
F) None of the above

Question 15

A laissez faire economy

Accepted Answer

A)   Relies predominantly on government policy rather than free market action.
B)   Relies predominantly on free market action rather than government policy.
C)   Relies equally on government policy and free market action.
D)   None of the choices are correct.E) A) and B)
F) A) and C)

Question 16

According to economists, which of the following is NOT a factor of production?

Accepted Answer

A)   Land.
B)   Labor.
C)   Money.
D)   Entrepreneurship.E) None of the above
F) All of the above

Question 17

Goods that have spillover costs affect our collective well-being and therefore can be overproduced because

Accepted Answer

A)   The government has failed to establish rules for contracts.
B)   Most businesses are more concerned about profits than how the environment is affected.
C)   The government has failed to enforce contract provisions.
D)   The government is concerned about broad economic welfare.E) A) and B)
F) A) and C)

Question 18

The 'WHAT goods and services does the US produce'question can best be answered using data about which of the following?

Accepted Answer

A)  The distribution of output in markets, specifically among manufacturing, services, and agricultural sectors.
B)   Per capita GDP.
C)   Productivity.
D)   The distribution of GDP among different income quintiles.E) All of the above
F) A) and D)

Question 19

Which of the following countries experienced a decline in total output from 2000 to 2009?

Accepted Answer

A)   Canada.
B)   Zimbabwe.
C)   China.
D)   Burundi.E) A) and B)
F) B) and D)

Question 20

Which of the following contains the two sectors whose percentage contribution to the real GDP has declined since 1900?

Accepted Answer

A)   Farming and manufacturing.
B)   Manufacturing and exports.
C)   Farming and services.
D)   Services and exports.E) A) and C)
F) B) and C)

Exam 2: The Useconomy: a Global View

The GDP is a measure of the market value of all final goods and services produced in the economy in a given time period.

Correct AnswerverifiedShow Answer

Outsourcing leads to

Correct AnswerverifiedShow Answer

As a nation's average education level increases, the nation's level of productivity

Correct AnswerverifiedShow Answer

Goods that have spillover costs affect our collective well-being and therefore can be overproduced because

Correct AnswerverifiedShow Answer

Those who are interested in assessing the relative standard of living of different countries over a given time period are most likely to look at

Correct AnswerverifiedShow Answer

Regarding increasing productivity, factor mobility is

Correct AnswerverifiedShow Answer

A laissez faire economy

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Which of the following definitely means productivity has increased?

Correct AnswerverifiedShow Answer

The result of government intervention in the market is that

Correct AnswerverifiedShow Answer

Which of the following contains the two sectors whose percentage contribution to the real GDP has declined since 1900?

Correct AnswerverifiedShow Answer

When workers move from one industry to another in response to demand changes, this is an example of

Correct AnswerverifiedShow Answer

Factor mobility aids in economic development when

Correct AnswerverifiedShow Answer

Which of the following countries experienced a decline in total output from 2000 to 2009?

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If population growth is less than output growth for a country,

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Externalities measure

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The 'WHAT goods and services does the US produce'question can best be answered using data about which of the following?

Correct AnswerverifiedShow Answer

When the production of a good creates external costs,

Correct AnswerverifiedShow Answer

According to economists, which of the following is NOT a factor of production?

Correct AnswerverifiedShow Answer

Education and training are examples of investment in human capital.

Correct AnswerverifiedShow Answer

The investment in human capital through education and training can result in

Correct AnswerverifiedShow Answer

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