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General economics multiple choice questions

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2. An economy is operating on its production possibilities frontier for 1996. A year later it is operating at a point beyond (outside) 1996's production possibilities frontier, but inside (within) 1997's production possibilities frontier. From this information, it can be concluded that between 1996 and 1997
a. both economic growth and an increase in unemployment occurred.
b. both economic growth and a reduction in unemployment occurred.
c. only a reduction in unemployment occurred.
d. only economic growth occurred.
e. only an increase in unemployment occurred.

3. Which one of the following, if any, will not shift the economy's entire production possibilities frontier (PPF) outward?
a. An increase in the size of the nation's labor force.
b. An improvement in technology.
c. The printing of new money by the government which causes the price of all goods to increase.
d. An increase in the nation's capital stock of machinery and equipment.
e. An upgrading of the skills and quality of the labor force.
f. None of the above is correct. They will all shift the frontier outward.

4. Which one of the following, if any, would cause the economy to move from a point inside (within) its production possibilities frontier closer to a point on the given frontier?
a. An improvement in technology.
b. A reduction in unemployment.
c. An improvement in the quality of resources available.
d. An increase in the quantity of resources available.
e. None of the above answers is correct.

5. In 1996 the economy is operating on its production possibilities frontier (PPF) and producing 30 guns and 60 pounds of butter. (Guns and butter are the only 2 products produced.) In 1997 the economy produces 25 guns and 75 pounds of butter. It can be concluded that between 1996 and 1997
a. both economic growth and a reduction in unemployment occurred.
b. neither economic growth nor a reduction in unemployment occurred.
c. only economic growth occurred.
d. only a reduction in unemployment occurred.
e. None of the above can be concluded.

8. An economy is operating within (inside) its production possibilities frontier (PPF) for 1990. A year later it is operating at a point beyond (outside) 1990's production possibilities frontier and within (inside) 1991's production possibilities frontier. From this information, it can be concluded that between 1990 and 1991
a. neither economic growth nor a reduction in unemployment occurred.
b. both economic growth and a reduction in unemployment occurred.
c. only a reduction in unemployment occurred.
d. only economic growth occurred.
e. only an increase in unemployment occurred.
f. both economic growth and an increase in unemployment occurred.

9. An economy is operating on its production possibilities frontier for 1998. A year later it is operating at a point beyond (outside) 1998's production possibilities frontier, but on 1999's production possibilities frontier. From this information, it can be concluded that between 1998 and 1999
a. both economic growth and an increase in unemployment occurred.
b. only economic growth occurred.
c. only a reduction in unemployment occurred.
d. only an increase in unemployment occurred.
e. both economic growth and a reduction in unemployment occurred.

10. Which one of the following, if any, will not shift the economy's entire production possibilities frontier (PPF) outward?
a. An improvement in technology.
b. An increase in the size of the labor force.
c. A reduction in unemployment.
d. An increase in the nation's capital stock of machinery and equipment.
e. An upgrading of the skills and quality of the labor force.
f. None of the above is correct. They will all shift the frontier outward.

11. In 2001 the economy is operating on its production possibilities frontier (PPF), producing 10 million guns and 15 billion pounds of butter. (Guns and butter are the only 2 products produced.) In 2002 the economy produces 10 million guns and 20 billion pounds of butter. It can be concluded that between 2001 and 2002
a. both economic growth and a reduction in unemployment occurred.
b. only a reduction in unemployment occurred.
c. only economic growth occurred.
d. neither economic growth nor a reduction in unemployment occurred.

12. An economy is operating on its production possibilities frontier for 1998. A year later it is operating at a point beyond (outside) 1998's production possibilities frontier, but inside (within) 1999's production possibilities frontier. From this information, it can be concluded that between 1998 and 1999
a. both economic growth and a reduction in unemployment occurred.
b. both economic growth and an increase in unemployment occurred.
c. only a reduction in unemployment occurred. There was no economic growth.
d. only economic growth occurred. There was no change in unemployment.
e. only an increase in unemployment occurred. There was no economic growth.

13. In 2001 the economy is operating inside (within) its production possibilities frontier (PPF) and producing 20 million guns and 75 billion pounds of butter. (Guns and butter are the only 2 products produced.) In 2002 the economy produces 30 million guns and 70 billion pounds of butter. It can be concluded that between 2001 and 2002
a. both economic growth and an increase in unemployment occurred.
b. both economic growth and a reduction in unemployment occurred.
c. only an increase in unemployment occurred.
d. only a reduction in unemployment occurred.
e. only economic growth occurred.
f. None of the above can be concluded.

14. In 1998 the economy is operating on its production possibilities frontier and producing 10 million guns and 50 billion pounds of butter. (Guns and butter are the only 2 products produced.) In 1999 the economy produces 9 million guns and 60 billion pounds of butter. It can be concluded that between 1998 and 1999
a. both economic growth and an increase in unemployment occurred
b. both economic growth and a reduction in unemployment occurred.
c. a reduction in unemployment occurred, but there was no economic growth.
d. an increase in unemployment occurred, but there was no economic growth.
e. economic growth occurred, but there was no change in unemployment.
f. None of the above can be concluded.

18. An economy is operating on its production possibilities frontier (PPF) for 2001. A year later it is operating at a point beyond (outside) 2001's production possibilities frontier and inside (within) 2002's production possibilities frontier. From this information, it can be concluded that between 2001 and 2002
a. both economic growth and a reduction in unemployment occurred.
b. both economic growth and an increase in unemployment occurred.
c. only a reduction in unemployment occurred.
d. only economic growth occurred.
e. only an increase in unemployment occurred.

19. An economy is operating inside (within) its production possibilities frontier (PPF) for 2002. A year later it is operating at a point beyond (outside) 2002's production possibilities frontier and on 2003's production possibilities frontier. From this information, it can be concluded that between 2002 and 2003
a. both economic growth and a reduction in unemployment occurred.
b. both economic growth and an increase in unemployment occurred.
c. only a reduction in unemployment occurred.
d. only economic growth occurred.
e. only an increase in unemployment occurred.

20. In 1997 the economy is operating on its production possibilities frontier (PPF) and producing 100 million guns and 50 billion pounds of butter. (Guns and butter are the only 2 products produced.) In 1998 the economy produces 150 million guns and 40 billion pounds of butter. It can be concluded that between 1997 and 1998
a. both economic growth and an increase in unemployment occurred.
b. both economic growth and a reduction in unemployment occurred
c. only a reduction in unemployment occurred.
d. only economic growth occurred.
e. only an increase in unemployment occurred
f. None of the above can be concluded.

21. An economy is operating inside (within) its production possibilities frontier (PPF) for 2000. A year later it is operating at a point beyond (outside) 2000's production possibilities frontier and on 2001's production possibilities frontier. From this information, it can be concluded that between 2000 and 2001
a. both economic growth and a reduction in unemployment occurred.
b. both economic growth and an increase in unemployment occurred.
c. only a reduction in unemployment occurred.
d. only economic growth occurred.
e. only an increase in unemployment occurred.

23. An economy is operating at a point inside (within) its production possibilities frontier (PPF). If a decrease in unemployment were then to occur, this would be shown as
a. a shift outward in the entire production possibilities frontier.
b. a movement to a point further inside (within) the given production possibilities frontier (closer to the origin).
c. a movement along the given production possibilities frontier.
d. a movement to a point outside (beyond) the given production possibilities frontier.
e. a shift inward in the entire production possibilities frontier.
f. a movement to a point closer to the given production possibilities frontier.

25. An economy is operating at a point on its production possibilities frontier (PPF). If an increase in unemployment were then to occur, this would be shown as
a. a shift outward in the entire production possibilities frontier.
b. a movement along the given production possibilities frontier.
c. a movement to a point inside (within) the given production possibilities frontier (closer to the origin).
d. a movement to a point outside (beyond) the given production possibilities frontier.
e. a shift inward in the entire production possibilities frontier.

26. The production possibilities frontier illustrates the basic principle that
a. the best combination of goods is achieved by allocating resources equally among them.
b. if all the resources of an economy are in use, the opportunity cost of producing more of one good is the amount of another good forgone.
c. prices of goods depends upon the supply and demand for them.
d. profit-motivated business firms will produce goods which maximize consumer welfare.
e. economic growth is best encouraged by careful government planning.

28. An economy is operating within (inside) its production possibilities frontier for 1999. A year later it is operating at a point beyond (outside) 1999's production possibilities frontier and within (inside) the 2000 production possibilities frontier. From this information, it can be concluded that between 1999 and 2000
a. unemployment increased.
b. a reduction in unemployment occurred.
c. economic growth occurred.
d. both economic growth and a reduction in unemployment occurred.
e. both economic growth and an increase in unemployment occurred.

29. When economists state that capital is a resource, they are referring to capital as
a. machinery and equipment used by businesses
b. money invested in businesses
c. money lent to businesses
d. money which potential investors are considering investing in businesses.
e. raw materials used by businesses in their production.

30. In 1998 the economy is operating on its production possibilities frontier (PPF), producing 100 million guns and 200 billion pounds of butter. (Guns and butter are the only 2 products produced.) In 1999 the economy produces 120 million guns and 200 billion pounds of butter. It can be concluded that between 1998 and 1999
a. both economic growth and a reduction in unemployment occurred.
b. neither economic growth nor a reduction in unemployment occurred.
c. only economic growth occurred.
d. only a reduction in unemployment occurred.

34. An economy is operating on its production possibilities frontier (PPF) for 1999. A year later it is operating at a point beyond (outside) 1999's production possibilities frontier and inside (within) 2000's production possibilities frontier. From this information, it can be concluded that between 1999 and 2000
a. both economic growth and a reduction in unemployment occurred.
b. both economic growth and an increase in unemployment occurred.
c. only a reduction in unemployment occurred.
d. only economic growth occurred.
e. only an increase in unemployment occurred.

35. In 2000 the economy is operating on its production possibilities frontier (PPF) and producing 100 million guns and 50 billion pounds of butter. (Guns and butter are the only 2 products produced.) In 2001 the economy produces 90 million guns and 70 billion pounds of butter. It can be concluded that between 2000 and 2001
a. both economic growth and an increase in unemployment occurred.
b. both economic growth and a reduction in unemployment occurred.
c. only an increase in unemployment occurred.
d. only a reduction in unemployment occurred.
e. only economic growth occurred.
f. None of the above can be concluded.

36. The production possibilities frontier illustrates which basic economic principle?
a. Market failure
b. Externalities
c. Adam Smith’s “invisible hand”
d. Opportunity cost
e. Government economic planning

37. An economy is operating at a point on its production possibilities frontier (PPF). If an increase in unemployment were then to occur, this would be shown as
a. a shift outward in the entire production possibilities frontier.
b. a movement to a point inside (within) the given production possibilities frontier.
c. a movement along the given production possibilities frontier.
d. a movement to a point outside (beyond) the given production possibilities frontier.
e. a shift inward in the entire production possibilities frontier.

  • SubjectEconomics
  • TopicGeneral Economics
  • Difficulty LevelCollege/University
  • Answer has attachmentsNo
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