Chapter 2 Scarcity and the World of Trade-Offs

33)
Efficiency can correctly be defined as
A)
producing outside the production possibilities boundary.
B)
minimizing opportunity cost.
C)
producing the maximum output with given technology and resources.
D)
providing for the immediate needs of the greatest proportion of the population.

34)
When an economy is operating efficiently, which is true?
A)
All resources are fully employed.
B)
It would be possible to increase the output of 1 good without decreasing the
output of the other.
C)
Resources are not fully employed or current technology is not being fully
utilized.
D)
This economy is operating to the right of its production possibilities curve
(PPC).

35)
Typically, the greater the specialization of resources,
A)
the less production that takes place.
B)
the greater the bow of the production possibilities curve.
C)
the poorer the country becomes.
D)
the greater the unemployment in the country.
36)
The production possibilities curve bows outward because
A)
opportunity costs are decreasing as the production of a good increases.
B)
opportunity costs are increasing as the production of a good increases.
C)
opportunity costs are fixed as the production of a good increases.
D)
resources are of uniform quality.

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37)
When the economy moves from point D to E in the above table, the opportunity
cost of a computer in terms of televisions is
A)
3.
B)
4.
C)
2.
D)
5.

38)
According to the above table, the opportunity cost of each additional computer
in terms of televisions
A)
remains constant.
B)
falls as more computers are produced.
C)
increases as more computers are produced.
D)
is meaningless because the cost of computers cannot be expressed in terms of
televisions.
39)
Given the production possibilities schedule in the above table, a combination
of 9 televisions and 4 personal computers
A)
is attainable but involves an inefficient use of society’s resources.
B)
would be attainable only if a new technology of producing televisions or
computers were introduced.
C)
is not attainable because it is not listed in the schedule.
D)
is not attainable because society does not have enough resources to produce
this combination.

40)
Given the production possibilities schedule in the above table, a combination
of 23 televisions and 6 personal computers
A)
is attainable but involves the unemployment of some of society’s resources.
B)
clearly illustrates the trade-off between televisions and computers.
C)
cannot be produced by society, given its current level of resources and
production technology.
D)
can be produced only if society is willing to have some of its resources used
inefficiently.