ECON 212 Chapter 1 Test || WITH 100% PASSED ANSWERS!!
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Module
ECON 212
Institution
ECON 212
Any point inside the production possibilities curve correct answers Inefficient yet attainable
Any point outside the production possibilities curve correct answers Unattainable
Any point on the production possibilities curve correct answers Efficient
If two variables are directly related, ...
any point inside the production possibilities curv
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ECON 212 Chapter 1 Test || WITH 100% PASSED
ANSWERS!!
Any point inside the production possibilities curve correct answers Inefficient yet attainable
Any point outside the production possibilities curve correct answers Unattainable
Any point on the production possibilities curve correct answers Efficient
If two variables are directly related, the relationship will have a graph that: correct answers
Upward sloping line
Does unemployment shift the production possibilities curve to the left? correct answers False
If economic resources are perfectly interchangeable between the two products shown on a
production possibilities graph: correct answers Straight line
Consider an economy that is producing inside its production possibilities curve. This
economy could move closer towards its production possibilities curve by: correct answers
Employing more of its available resources
Does the slope of a graph measure the rate of change in one variable as the other variable
changes? correct answers True
The maximum combinations of products that can be produced correct answers Production
possibilities curve
In a graph of the production possibilities curve, the two axes of the graph indicate the: correct
answers Quantities of the two products that a nation can produce
An economic model is a purposeful simplification of reality, whose function includes: correct
answers Analyzing the behavior of a typical or average consumer or firm
A movement from one point to another along the production possibilities curve would imply
that: correct answers Society is producing a different combination of outputs
The role of the entrepreneur in society is to: correct answers Bring the factors of production
together and take the risks of producing
What gives the production of possibilities curve its bowed out shape? correct answers Law of
increasing opportunity cost
What is the law of increasing opportunity cost? correct answers As the production of a
particular good increases, the opportunity cost of producing an additional unit rises
Other-things-equal assumption correct answers It is the assumption that factors other than
those being considered do not change
, The assumption that what is true for one individual or part of a whole is necessarily true for a
group of individuals or the whole correct answers Fallacy of composition
Imagine an ideal scenario where world peace prevails and all nations are led by peace-minded
leaders. In such a world, the: correct answers MB for defense goods would shift left
A schedule or curve that shows various combinations of two products a consumer can
purchase with a specific money income correct answers Budget line
The economic perspective includes three elements: correct answers Scarcity and choice,
purposeful behavior, and marginal analysis
The independent variable is: correct answers The cause or the source
Economic systems differ in ____ and ____ correct answers Who owns the factors of
production, the method used to motivate, coordinate, and direct economic activity
____ ensures that entrepreneurs and private businesses are free to obtain and use economic
resources to produce their choice of goods and services correct answers Freedom of
enterprise
____ rests on the private ownership of property and on freedom of enterprise and freedom of
choice. correct answers The market system
____ means using the resources of an individual, firm, region, or nation to produce one or a
few goods or services rather than the entire range of goods and services. correct answers
Specialization
The market system answers five fundamental questions: correct answers What goods and
services will be produced?
How will the goods and services be produced?
Who will get the goods and services?
How will the system accommodate change?
How will the system promote progress?
Two reasons why command systems failed correct answers The coordination problem and the
incentive problem
The place where households sell and business buy correct answers Resource market
The place where households buy and businesses sell correct answers Product market
In the circular flow diagram, resources flow ____ correct answers Counter-clockwise
All the income in the economy flows to correct answers Households
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