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  • Exercise 2 Basic Concepts and Problems of Economics

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    Hui Qing
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    This document contains an exercise with 8 multiple choice questions about basic economic concepts like production possibility curves, opportunity cost, and different economic systems. Students are asked to circle their answer choice and provide a brief explanation for each question. The questions refer to graphs showing production possibility curves and ask students to determine things like efficiency changes when moving between points on the curve, and to calculate opportunity costs of moving resources between goods. The last two questions ask students to identify characteristics of socialism and welfare capitalism as economic systems.

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    This document contains an exercise with 8 multiple choice questions about basic economic concepts like production possibility curves, opportunity cost, and different economic systems. Students are asked to circle their answer choice and provide a brief explanation for each question. The questions refer to graphs showing production possibility curves and ask students to determine things like efficiency changes when moving between points on the curve, and to calculate opportunity costs of moving resources between goods. The last two questions ask students to identify characteristics of socialism and welfare capitalism as economic systems.

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    23 views3 pages

    Exercise 2 Basic Concepts and Problems of Economics

    Uploaded by

    Hui Qing
    This document contains an exercise with 8 multiple choice questions about basic economic concepts like production possibility curves, opportunity cost, and different economic systems. Students are asked to circle their answer choice and provide a brief explanation for each question. The questions refer to graphs showing production possibility curves and ask students to determine things like efficiency changes when moving between points on the curve, and to calculate opportunity costs of moving resources between goods. The last two questions ask students to identify characteristics of socialism and welfare capitalism as economic systems.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
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    of 3

    BEEB1013 Group:

    Group:

    EXERCISE 2: Basic Concepts and Problems of Economics

    Instruction: Please CIRCLE (O) your answer and give brief


    explanation on the empty space surrounding the question how you get
    the answer. (SUBMIT ON THE 2 October 2019)

    1. The principle of increasing marginal opportunity cost holds in which of the following cases? 

    A. All inputs are equally adaptable to the production of all goods.


    B. The production possibility curve is a downward sloping straight line.
    C. Some inputs are better off producing particular goods.
    D. Each input can be used to produce only one good.

    2. If you move from a point inside the production possibility curve to a point on the production
    possibility curve, it follows that efficiency is: 

    A. increased because the economy is now on the production possibility curve.


    B. increased only if production of both goods increases.
    C. increased as long as the combined output of both goods increases.
    D. reduced if less of one good is produced.

    3. If a production possibility curve representing a tradeoff between a grade in English and a grade
    in math has a negative slope we know that: 

    A. there is a direct relationship between grades in English and grades in math.


    B. there is no relationship between grades in English and grades in math.
    C. there is an inverse relationship between grades in English and grades in math.

    1
    D. one can get better grades in English only if one gets better grades in math.

    4. Refer to the graph below.

       
    As you move from point A to point B: 

    A. production efficiency is increased because we have more of good X.


    B. production efficiency is decreased because we have less of good Y.
    C. production efficiency is decreased because we are no longer on the production possibility
    curve.
    D. the change in efficiency is unclear.

    5. Refer to the graph above. When you're moving from point C to B the opportunity cost of butter
    in terms of guns is 

    A. 1/3.
    B. 1.
    C. 2/3.
    D. 3/2.

    6. Refer to the graph above. In the range of points between A and B there is 

    A. a high opportunity cost of guns in terms of butter.


    B. a low opportunity cost of guns in terms of butter.
    C. no opportunity cost of guns in terms of butter.
    D. a high monetary cost of guns in terms of butter.

    2
    BEEB1013 Group:

    Group:

    7. Socialism in theory is an economic system in which: 

    A. government sees to it that people work for the common good until they could be relied upon to
    do that on their own.
    B. the invisible hand insures that individual decisions are made for the common good.
    C. government owns the means of production, but individual self-interest determines how
    production is organized.
    D. individuals are able to act in the best interest of everyone without direction from government
    or the invisible hand.

    8. "Welfare capitalism" is an economic system in which: 

    A. markets operate without government regulation.


    B. government owns all of the means of production.
    C. markets operate, but government regulates markets significantly.
    D. laissez-faire operates unimpeded.

    --END OF QUESTIONS--

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