Economics, 11e, Global Edition (Parkin)
Part 1 Review
1 Introduction
1) All economic questions arise because
A) of scarcity.
B) production possibilities are unlimited.
C) our wants are limited.
D) people are irrational.
Answer: A
Topic: Scarcity
Skill: Recognition
Status: Previous edition, Part Review 1
AACSB: Reflective Thinking
2) Which of the following is NOT a factor of production?
A) mineral resources
B) money
C) a computer programmer
D) a commercial aircraft
Answer: B
Topic: Factors of Production
Skill: Recognition
Status: Previous edition, Part Review 1
AACSB: Reflective Thinking
3) The opportunity cost of a good is
A) the income you forgo to get it.
B) the lowest valued alternative you give up to get it.
C) the highest valued alternative you give up to get it.
D) all alternatives you give up to get it.
Answer: C
Topic: Opportunity Cost
Skill: Recognition
Status: Previous edition, Part Review 1
AACSB: Reflective Thinking
4) Jen won $900 in a lottery. She has a choice between using the money to buy a sofa, a television, or going on a vacation. If she chooses to buy a television, the opportunity cost of this decision is
A) zero because she won the money.
B) the sofa and the vacation trip.
C) the sofa, the vacation trip, and $900.
D) the sofa if that was her second choice.
Answer: D
Topic: Opportunity Cost
Skill: Analytical
Status: Previous edition, Part Review 1
AACSB: Reflective Thinking
5) The table above lists six points on the production possibilities frontier for cheese and DVDs. Given this information, which of the following combinations is unattainable?
A) 2 tons of cheese and 56 thousand DVDs
B) 8 tons of cheese and 21 thousand DVDs
C) 6 tons of cheese and 34 thousand DVDs
D) 7 tons of cheese and 20 thousand DVDs
Answer: B
Topic: Production Possibilities Frontier
Skill: Analytical
Status: Previous edition, Part Review 1
AACSB: Analytical Skills
6) The table above lists six points on the production possibilities frontier for cheese and DVDs. From this information you can conclude that production is inefficient if this economy produces
A) 2 tons of cheese and 56 thousand DVDs.
B) 8 tons of cheese and 21 thousand DVDs.
C) 5 tons of cheese and 48 thousand DVDs.
D) 7 tons of cheese and 20 thousand DVDs.
Answer: D
Topic: Production Possibilities Frontier
Skill: Analytical
Status: Previous edition, Part Review 1
AACSB: Analytical Skills
7) The table above lists six points on the production possibilities frontier for cheese and DVDs. What is the opportunity cost of producing the 7th ton of cheese?
A) 16 DVDs
B) 8 DVDs
C) 20 DVDs
D) 28 DVDs
Answer: B
Topic: Opportunity Cost
Skill: Analytical
Status: Previous edition, Part Review 1
AACSB: Analytical Skills
