CLEMSON MACROECONOMICS 2120 FINAL EXAM (2026)
QUESTIONS AND DETAILED ANSWERS
Scarcity exists because - ANSWER-human wants exceed the resources available to satisfy them.
Because human wants are insatiable and unlimited while available resources are limited, people
are said to face the problem of - ANSWER-scarcity.
The study of economics is best described as a study of - ANSWER-coping with scarcity, and
choices made as a result of scarcity in a society.
Which of the following BEST describes macroeconomics? - ANSWER-it analyzes the aggregate
effects on the national economy of the choices made by individuals, firms, and governments.
Self-interest - ANSWER-reflects choices that are best for the individual who makes them.
To economists, scarcity means that - ANSWER-unlimited wants cannot be satisfied by the
limited resources.
When a landscaping company decides to use drafting software and computers instead of hiring
designers to draw design plans by hand, it is answering the ________ question. - ANSWER-how
What is NOT true about rational choice? - ANSWER-It is the same for all individuals.
In economics, cost is measured as ________, and benefit is measured as ________. - ANSWER-
what you must give up to get something; what you are willing to give up to get it
If Jessie studies economics for two hours instead of going to the movies with her friends, then -
ANSWER-the opportunity cost of studying is the missed movie.
The cost of a one-unit increase in an activity is called the - ANSWER-marginal cost.
A professor changes the penalty for cheating on exams from getting a 0 on the exam to getting an
F in the course. The professor has - ANSWER-increased the marginal cost of cheating.
Decision making on the margin involves - ANSWER-comparing the marginal cost and marginal
benefits when making a decision.
An incentive is - ANSWER-an inducement to take a particular action.
If the marginal benefit of getting a college degree rises, rational people will - ANSWER-attend
college in greater numbers.
If the marginal benefit of the next slice of pizza exceeds the marginal cost, you will - ANSWER-
eat the slice of pizza.
In the production possibilities model, the vertical axis measures ________ and the horizontal
axis measures ________. - ANSWER-the quantity of a good or service; the quantity of another
good or service
, The production possibilities frontier illustrates the - ANSWER-maximum combinations of goods
and services that can be produced.
The production possibilities frontier is the boundary between the - ANSWER-attainable and
unattainable combinations of goods and services.
Consider a production possibility frontier with jeans on the vertical axis and shoes on the
horizontal axis. As the country moves along the frontier closer to the horizontal axis, -
ANSWER-more shoes are produced.
Moving from one point to another on a production possibilities frontier implies - ANSWER-
increasing the production of one good and decreasing the production of another.
Production efficiency is represented by ________ a production possibilities frontier. -
ANSWER-all points on
If there is unemployment in an economy, then the - ANSWER-economy is producing at a point
inside the production possibilities frontier.
The figure above shows the production possibilities frontier for a country. If the country is
producing at point D, then the - ANSWER-resources are not being used efficiently and/or are
unemployed.
The above figure shows the production possibility frontier for an economy. The point or points
that are attainable are - ANSWER-points A, B, C, and D.
The negative slope of the production possibilities frontier represents the idea - ANSWER-of
tradeoffs, that in order to produce more of one good, the nation must produce less of another.
A free lunch (the absence of a tradeoff) when the production of a good is increased is possible
for the entire economy only if - ANSWER-resources are used inefficiently.
In a production possibilities frontier graph, the cost of producing more units of a good is
measured by the - ANSWER-amount of the other good or service that must be forgone.
On a production possibilities frontier, 500 pounds of apples and 1,200 pounds of bananas can be
produced while at another point on the same frontier, 300 pounds of apples and 1,300 pounds of
bananas can be produced. Between these points, what is the opportunity cost of producing a
pound of bananas? - ANSWER-2 pounds of apples
Production possibilities frontiers usually curve out and away from the origin. The implication of
this curvature is that - ANSWER-some resources are better at producing one good while other
resources are better at producing alternative goods.
The opportunity cost of producing more of one good on a production possibilities frontier is -
ANSWER-a ratio of quantities.
Which of the following is the best definition of economic growth? - ANSWER-the sustained
expansion of production possibilities
QUESTIONS AND DETAILED ANSWERS
Scarcity exists because - ANSWER-human wants exceed the resources available to satisfy them.
Because human wants are insatiable and unlimited while available resources are limited, people
are said to face the problem of - ANSWER-scarcity.
The study of economics is best described as a study of - ANSWER-coping with scarcity, and
choices made as a result of scarcity in a society.
Which of the following BEST describes macroeconomics? - ANSWER-it analyzes the aggregate
effects on the national economy of the choices made by individuals, firms, and governments.
Self-interest - ANSWER-reflects choices that are best for the individual who makes them.
To economists, scarcity means that - ANSWER-unlimited wants cannot be satisfied by the
limited resources.
When a landscaping company decides to use drafting software and computers instead of hiring
designers to draw design plans by hand, it is answering the ________ question. - ANSWER-how
What is NOT true about rational choice? - ANSWER-It is the same for all individuals.
In economics, cost is measured as ________, and benefit is measured as ________. - ANSWER-
what you must give up to get something; what you are willing to give up to get it
If Jessie studies economics for two hours instead of going to the movies with her friends, then -
ANSWER-the opportunity cost of studying is the missed movie.
The cost of a one-unit increase in an activity is called the - ANSWER-marginal cost.
A professor changes the penalty for cheating on exams from getting a 0 on the exam to getting an
F in the course. The professor has - ANSWER-increased the marginal cost of cheating.
Decision making on the margin involves - ANSWER-comparing the marginal cost and marginal
benefits when making a decision.
An incentive is - ANSWER-an inducement to take a particular action.
If the marginal benefit of getting a college degree rises, rational people will - ANSWER-attend
college in greater numbers.
If the marginal benefit of the next slice of pizza exceeds the marginal cost, you will - ANSWER-
eat the slice of pizza.
In the production possibilities model, the vertical axis measures ________ and the horizontal
axis measures ________. - ANSWER-the quantity of a good or service; the quantity of another
good or service
, The production possibilities frontier illustrates the - ANSWER-maximum combinations of goods
and services that can be produced.
The production possibilities frontier is the boundary between the - ANSWER-attainable and
unattainable combinations of goods and services.
Consider a production possibility frontier with jeans on the vertical axis and shoes on the
horizontal axis. As the country moves along the frontier closer to the horizontal axis, -
ANSWER-more shoes are produced.
Moving from one point to another on a production possibilities frontier implies - ANSWER-
increasing the production of one good and decreasing the production of another.
Production efficiency is represented by ________ a production possibilities frontier. -
ANSWER-all points on
If there is unemployment in an economy, then the - ANSWER-economy is producing at a point
inside the production possibilities frontier.
The figure above shows the production possibilities frontier for a country. If the country is
producing at point D, then the - ANSWER-resources are not being used efficiently and/or are
unemployed.
The above figure shows the production possibility frontier for an economy. The point or points
that are attainable are - ANSWER-points A, B, C, and D.
The negative slope of the production possibilities frontier represents the idea - ANSWER-of
tradeoffs, that in order to produce more of one good, the nation must produce less of another.
A free lunch (the absence of a tradeoff) when the production of a good is increased is possible
for the entire economy only if - ANSWER-resources are used inefficiently.
In a production possibilities frontier graph, the cost of producing more units of a good is
measured by the - ANSWER-amount of the other good or service that must be forgone.
On a production possibilities frontier, 500 pounds of apples and 1,200 pounds of bananas can be
produced while at another point on the same frontier, 300 pounds of apples and 1,300 pounds of
bananas can be produced. Between these points, what is the opportunity cost of producing a
pound of bananas? - ANSWER-2 pounds of apples
Production possibilities frontiers usually curve out and away from the origin. The implication of
this curvature is that - ANSWER-some resources are better at producing one good while other
resources are better at producing alternative goods.
The opportunity cost of producing more of one good on a production possibilities frontier is -
ANSWER-a ratio of quantities.
Which of the following is the best definition of economic growth? - ANSWER-the sustained
expansion of production possibilities
