1) To correct for inflation, GDP numbers must be converted using the price level in a given year known as the
Base year
Real year
Current year
Constant year
Inflation year
2) A production possibilities curve represents all of an economy's combinations for production that are
Unattainable
Possible and Efficient
Attainable
Inefficient
Desirable
Question 3
Which of the following is a technique used to determine the optimal level of an economic activity?
Cost/benefit analysis
Production possibilities curve analysis
GDP analysis
Opportunity cost analysis
Question 4
The bow shape of the production possibilities curve reflects
The opportunity cost concept
The concept of increasing opportunity costs
The concept of diminishing marginal returns
The marginal social cost/marginal social benefit principle
Question 5
Real per capita GDP is defined as
Population/real GDP
GDP/population
Real GDP/price index
Real GDP/population
Price index/GDP
Question 6
Marginal social cost refers to the
Cost incurred due to an action undertaken by society
Total expenditures by society on a good like a public park
Cost borne by society when 1 more unit of a good is produced
Cost to society of sub-standard production
Cost to society when an additional unit of a social good is produced
Question 7
If population in a country falls while GDP stays the same, the country's
Real GDP falls
Real GDP rises
Per capita GDP rises
Per capita GDP falls
Welfare falls
Question 8
With private property rights, the decision about how to use resources are made by
The government
Private firms
Individual resource owners
Resource committees
Question 9
The know-how and the means and methods of production available in an economy are known as
Technology
Capital
Human capital
Labor
Management
Question 10
The purpose of a base year when constructing a price index is:
Showing how the output values rise from year to year
Encourage inflation
Providing a means to compare the economy's output across different time periods
To show why expenditures on government goods and services need to increase
Indicate the progress in keeping prices low
Question 11
Economic reasoning would not be necessary if
Our wants were limited
Resources were expansive
Scarcity were decreased
We could have everything we wanted
Politicians were better at running the economy
Question 12
The fundamental economic problem involves
Overpopulation
Inflation and unemployment
Scarce resources and unlimited wants
Cheap foreign labor
Supply and demand
Question 13
Labor resources include
The equipment workers use to complete their work
Only non-management personnel
Any efforts of a person to produce goods
Only the physical efforts of an economy's people
Question 14
A country can shift out its production possibilities curve by
Improving its technology
Shifting its production from one good to another
Experiencing a population drop
Using its farmland more productively
Question 15
The means for satisfying wants are
Insatiable
Unlimited
Infinite
Scarce
Unavailable
