BSNS exam prep Multiple Choice Questions And Correct Answers. Over 100 Q&A

BSNS exam prep Multiple Choice Questions And Correct Answers. Over 100 Q&A At her current level of consumption, a consumer is willing to pay up to $1.50 for a bottle of eater and up to $1,500 for a diamond ring because the a. total utility of diamond rings is greater than the total utility of water b. total utility of water is less than the marginal utility of a diamond ring c. marginal utility of a bottle of water is less than the marginal utility of a diamond ring d. marginal utility of a bottle of water is greater than the marginal utility of a diamond ring e. consumer is irrational and does not understand that water is more important than a diamond. C Any point inside a production possibilities curve is a. better than points on the production possibilities curve b. allocatively efficient but technologically inefficient c. associated with inefficient use of unemployment of some resources d. associated with movements along the production possibilities curve e. associated with constand opportunity costs C Which of the following concepts can be illiustrated using the prodcution possibilities curve i. choice ii scarcity iii. price level iv. opportunity cost a. ii only b. i and iii only c. iii and iv only d. i, ii, and iv only e. ii, iii, iv only D After graduating from high school, Maria chose to go to college, while Omar chose to work full-time. which of the following best describes the opportunity costs for these decisions. a. Maria's opportunity cost includes the salary she could have earned if she had gone to work b. maria's opportunity cost is her living expenses while attending college. c. Omar' opportunity cost is the salary he will earn from working d. omar's opportunity cost is the tuition and expenses he would have paid for college e. omar's opportunity cost is definitely greater than Maria's. A the basic economic problem of all economies is essentially one of deciding how to make the best use of a. unlimited resources to satisfy unlimited wants b. limited resources to satisfy unlimited wants c. unlimited resources to satisfy limited wants d. limited resources to satisfy limited wants e. limited resources to provide public goods B Which of the following describes opportunity cost a. it is the cost of producing those goods most desired by a given economy b. it is the cost of the input mix that will lead to the greatest rate of growth for a given company c. it is the amount of one product that must be given up in order to produce an additional unit of another product d. it is the use of the least-cost method of production e. it is the cost of labor used in the production process. C Which of the following explains why a production possibilities curve is often represented as concave (bowed out) from the origin. a. law of demand b. the law of supply c. constant returns to scale d. decreasing opportunity cost e. increasing opportunity cost E According to the law of diminishing marginal utility, which of the following is true? a. total satisfaction decreases as more units of a good are consumed b. the additional satisfaction received from consuming extra units of a good decreases as consumption of the good increases. c. the additional satisfaction received from consuming extra units of a good decreases as consumption of the good decreases d. the additional satisfaction received from consuming extra unit of a good increases as consumption of the good increases. e. when marginal utility is decreasing, total utility is decreasing. B After graduating from high school, Peggy Smith decided to enroll in a two-year program at the local community college rather than to accept a job that offered a salary of $12,000 per year. if the annual tuition and fees are $4,600, the annual opportunity cost of attending the community college is a. $4,600 b. $7,400 c. $12,000 d. $16,600 e. $24,000 D In which of the following situations is a good NOT scarce? a. consumers give up nothing to obtain more of the good b. consumers can purchase as much of the good as they want at its current market price c. large quantities of the good are available in the marketplace d. there is a surplus of the good at some positive price e. there is a shortage of the good at some positive value A the concept of opportunity cost would no longer be relevant if a. poverty in an economy no longer existed b. the supply of all resources were unlimited c. resources were allocated efficiently d. real wages were flexible e. All current incomes were invested in technological research B A short-run Phililps curve shows an inverse relationship between a. interest rates and borrowing b. inflation and unemployment c. income and consumption d. prices and quality demanded e. inputs and outputs B Assume that an economy produces televisions and shoes. which of the followng would cause the production possibilities curve for this economy to shift outward a. an increase in labor force b. an increase in prices of both goods c. an increase in the prices of resources used to produce both goods d. a decrease in the demand for shoes e. a change in consumers' tastes in favor of televisions A suppose that in one week Sam can knit 5 sweaters or make 4 blankets and Rob can knit 10 sweaters or make 6 blankets. which of the following is true? a. sam has an absolute advantage in making blankets b. sam has an absolute advantage in knitting sweaters c. sam has a comparative advantage in making blankets d. sam has a comparative advantage in knitting sweaters e. sam has neither a comparative nor an absolute advantage in knitting sweaters or making blankets C If a good is available free of charge, an individual will consume it until a. marginal utility is zero b. average utility is zero c. total utility is zero d. marginal utility equals average utility e. marginal utility equals total utility A if a certain combination of goods or services lies outside the production possibilities curve of an economy a. effective trade barries have reduced foreign imports into the economy b. new technology is being used in production c. resources are not available to achieve that combination of goods and services d. resources are not being used efficiently to achieve that combination of goods or services e. resources are being used at a more rapid rate than they were in the past C improvements in technology for producing all goods must result in a. an inward shift in the production possibilities curve b. an outward shift in the production possibility curve c. a flatter production possibilities curve d. a steeper production possibilities curve e. greater unemployment of labor B Suppose two countries are each capable of individually producing two given commodities. Instead, each specalizes by producing the commodity for which it has a comparative advantage and trades with the other country. Which of the following is most likely to result a. the two countries will become more independent of each other b. unemployment will increase in one county and decrease in the other c. there will be more efficient production in one country byt less efficient production in the other d. both countries will become better off e. both countries will be producing their commodity inefficiently D An increase in which of the following is most likely to cause an improvement in the standard of living over time a. size of population b. size of labor force c. number of loans d. level of taxation e. productivity of labor E the following headline appears in the business section of the newspaper: "Software firm Aims Marketing Campaign at Teenagers", Which of the followingbasic economic questions does this article address? a. what to produce b. when to produce c. for whom to produce d. where to produce e. why to produce C Capital is a. the least important focus of economics b. the interest charged on a loan from a banking institution c. exchanged on the product market d. exchanged on the factor market e. unlimited because it can be built by people D Which of the following is true in a capitalist economy a. the factors of production are collectively owned b. the factors pf production are distributed according to needs c. the prices of goods and services are usually determined b the gov't d. the prices of goods and services are set so that an equitable distribution of private property is achieved e. prices serve as incentives for factors of production to move to the markets where they are most valued. E As a factor of production, capital refers to the a. money available to start a business b. stocks and bonds issued by businesses to raise funds c. financial investments of businesses d. currency in circulation and deposits in financial institutions e. tools and machinery used to produce goods and services E The circular flow of economic activity between consumer and producers includes which of the following i. households buy factor services from firms ii households sell factor services to firms iii households buy outputs from firms iv households sells outputs to firms a. iii only b. iv only c. i and iii only d. ii and iii only e. iii and iv only D Laissez-faire is a concept that specifically favors a. monopolies a the most efficient type of market b. limits on profits t stimulate economic growth c. a very limited role of government in business d. specialization as a way to increase productivity e. private-public partnerships. C Using the same amount of time and resources, Jack can assemble either 10 bikes or 5 computers, whereas Same can assemble either 5 bikes or 5 computers. Based on the data, which of the following statements is correct a. sam ha an absolute advantage in assembling bikes b. sam has an absolute advantage in assembling computers c. sam has an comparative advantage in assembling bikes d. Jack has a comparative advantage in assembling bikes e. jack has a comparative advantage in assembling both bikes and computers D If nations specialize according to their comparative advantage and engage in international trade with each other, each nation can a. produce outside its production possibilites curve b. consume outside its production possibilities curve c. shift its production possibilities curve to the right d. become more self-sufficient e. produce more of all goods B The fundamental difference between a market economy and a command economy lies in which of the following? a. property rights and protection of private property b. absolute and comparative advantages c. specialization and trade d. taxes and subsidies e. positive and negative externalities A Which of the following describes human capital a. the number of workers in the labor force b. the physical capital used by workers c. the financial assets owned by workers d. the training and education of the workers e. the spending by businesses for worker recruitment D Unit 2 Test As price decreases (a) demand increases. (b) the demand curve shifts left. (c) the supply curve shifts right. (d) quantity demanded increases. d A general increase in consumer incomes (a) leads to a movement along the demand curve. (b) shifts the demand curve to the right. (c) shifts the demand curve to the left. (d) shifts the demand curve, but it may shift left or right. d The slope of the supply curve for a good (a) decreases as consumer incomes increase. (b) usually decreases as the period of time under consideration increases.