Economics 6th Edition by R. Glenn
Hubbard – Complete Test Bank with
Full Pack Solutions (Updated
2025/2026, Instant Download)
1
Copyright © 2017 Pearson Education, Inc.
Economics 2017 (Hubbard/O'Brien)
Chapter 2 Trade-offs, Comparative Advantage, and the Market System
2.1 Production Possibilities Frontiers and Opportunity Costs
1) Scarcity
A) stems from the incompatibility between limited resources and unlimited wants.
B) can be overcome by discovering new resources.
C) can be eliminated by rationing products.
D) is a bigger problem in market economies than in socialist economies.
Answer: A
Diff: 2 Page Ref: 42
Topic: Scarcity
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to
think like an economist
AACSB: Analytical thinking
2) Tesla Motors manufacturers its cars at a plant in Fremont, California. At this plant, Tesla
is
able to take advantage of the high level of technical training possessed by its American
workers,
but it also sacrifices the ability to pay lower wages had it chosen to open its plant in a low-
wage
country such as Mexico, India, or China. In deciding to open the Fremont plant, Tesla
A) faced no trade-offs because employing more technically-skilled workers increased
efficiency.
B) faced a trade-off between higher cost and lower precision.
C) adopted a negative technological change because it chose high-skilled workers over low-
paid
,workers.
D) eroded some of its competitiveness in the luxury electric car market because of its
increased
cost of production.
Answer: B
Diff: 2 Page Ref: 41
Topic: Opportunity Cost
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that
can be
made from trade
AACSB: Analytical thinking
Special Feature: Chapter Opener: Managers at Tesla Motors Face Trade-Offs
DOWNLOAD THE Test Bank for Economics 6th Edition Hubbard
mynursytest.store
2
Copyright © 2017 Pearson Education, Inc.
3) The principle of opportunity cost is that
A) in a market economy, taking advantage of profitable opportunities involves some money
cost.
B) the economic cost of using a factor of production is the alternative use of that factor that
is
given up.
C) taking advantage of investment opportunities involves costs.
D) the cost of production varies depending on the opportunity for technological application.
Answer: B
Diff: 2 Page Ref: 43
Topic: Opportunity Cost
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to
think like an economist
AACSB: Analytical thinking
4) The production possibilities frontier shows the ________ combinations of two products
that
can be produced in a particular time period with available resources.
A) minimum attainable
B) maximum attainable
C) only
D) equitable
Answer: B
Diff: 2 Page Ref: 42
Topic: Production Possibilities Frontiers
*: Recurring
,Learning Outcome: Micro-3: Discuss different types of market systems and the gains that
can be
made from trade
AACSB: Analytical thinking
5) The production possibilities frontier model shows that
A) if consumers decide to buy more of a product, its price will increase.
B) a market economy is more efficient in producing goods and services than is a centrally
planned economy.
C) economic growth can only be achieved by free market economies.
D) if all resources are fully and efficiently utilized, more of one good can be produced only
by
producing less of another good.
Answer: D
Diff: 2 Page Ref: 42
Topic: Production Possibilities Frontiers
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that
can be
made from trade
AACSB: Analytical thinking
DOWNLOAD THE Test Bank for Economics 6th Edition Hubbard
mynursytest.store
3
Copyright © 2017 Pearson Education, Inc.
6) The production possibilities frontier model assumes which of the following?
A) Labor, capital, land, and natural resources are unlimited in quantity.
B) The economy produces only two products.
C) Production of any level of the two products that the economy produces is currently
possible.
D) The level of technology is variable.
Answer: B
Diff: 2 Page Ref: 42
Topic: Production Possibilities Frontiers
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that
can be
made from trade
AACSB: Analytical thinking
7) The attainable production points on a production possibilities curve are
A) the horizontal and vertical intercepts.
B) the points along the production possibilities frontier.
, C) the points outside the area enclosed by the production possibilities frontier.
D) the points along and inside the production possibility frontier.
Answer: D
Diff: 2 Page Ref: 42
Topic: Production Possibilities Frontiers
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that
can be
made from trade
AACSB: Analytical thinking
8) The points outside the production possibilities frontier are
A) efficient.
B) attainable.
C) inefficient.
D) unattainable.
Answer: D
Diff: 2 Page Ref: 43
Topic: Production Possibilities Frontiers
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that
can be
made from trade
AACSB: Analytical thinking
DOWNLOAD THE Test Bank for Economics 6th Edition Hubbard
mynursytest.store
4
Copyright © 2017 Pearson Education, Inc.
Figure 2-1
9) Refer to Figure 2-1. Point A is
A) technically efficient.
B) unattainable with current resources.
C) inefficient in that not all resources are being used.
D) the equilibrium output combination.
Answer: C
Diff: 1 Page Ref: 43
Topic: Production Possibilities Frontiers
*: Recurring
Learning Outcome: Micro-2: Interpret and analyze information presented in different types
of
Hubbard – Complete Test Bank with
Full Pack Solutions (Updated
2025/2026, Instant Download)
1
Copyright © 2017 Pearson Education, Inc.
Economics 2017 (Hubbard/O'Brien)
Chapter 2 Trade-offs, Comparative Advantage, and the Market System
2.1 Production Possibilities Frontiers and Opportunity Costs
1) Scarcity
A) stems from the incompatibility between limited resources and unlimited wants.
B) can be overcome by discovering new resources.
C) can be eliminated by rationing products.
D) is a bigger problem in market economies than in socialist economies.
Answer: A
Diff: 2 Page Ref: 42
Topic: Scarcity
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to
think like an economist
AACSB: Analytical thinking
2) Tesla Motors manufacturers its cars at a plant in Fremont, California. At this plant, Tesla
is
able to take advantage of the high level of technical training possessed by its American
workers,
but it also sacrifices the ability to pay lower wages had it chosen to open its plant in a low-
wage
country such as Mexico, India, or China. In deciding to open the Fremont plant, Tesla
A) faced no trade-offs because employing more technically-skilled workers increased
efficiency.
B) faced a trade-off between higher cost and lower precision.
C) adopted a negative technological change because it chose high-skilled workers over low-
paid
,workers.
D) eroded some of its competitiveness in the luxury electric car market because of its
increased
cost of production.
Answer: B
Diff: 2 Page Ref: 41
Topic: Opportunity Cost
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that
can be
made from trade
AACSB: Analytical thinking
Special Feature: Chapter Opener: Managers at Tesla Motors Face Trade-Offs
DOWNLOAD THE Test Bank for Economics 6th Edition Hubbard
mynursytest.store
2
Copyright © 2017 Pearson Education, Inc.
3) The principle of opportunity cost is that
A) in a market economy, taking advantage of profitable opportunities involves some money
cost.
B) the economic cost of using a factor of production is the alternative use of that factor that
is
given up.
C) taking advantage of investment opportunities involves costs.
D) the cost of production varies depending on the opportunity for technological application.
Answer: B
Diff: 2 Page Ref: 43
Topic: Opportunity Cost
*: Recurring
Learning Outcome: Micro-1: Identify the basic principles of economics and explain how to
think like an economist
AACSB: Analytical thinking
4) The production possibilities frontier shows the ________ combinations of two products
that
can be produced in a particular time period with available resources.
A) minimum attainable
B) maximum attainable
C) only
D) equitable
Answer: B
Diff: 2 Page Ref: 42
Topic: Production Possibilities Frontiers
*: Recurring
,Learning Outcome: Micro-3: Discuss different types of market systems and the gains that
can be
made from trade
AACSB: Analytical thinking
5) The production possibilities frontier model shows that
A) if consumers decide to buy more of a product, its price will increase.
B) a market economy is more efficient in producing goods and services than is a centrally
planned economy.
C) economic growth can only be achieved by free market economies.
D) if all resources are fully and efficiently utilized, more of one good can be produced only
by
producing less of another good.
Answer: D
Diff: 2 Page Ref: 42
Topic: Production Possibilities Frontiers
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that
can be
made from trade
AACSB: Analytical thinking
DOWNLOAD THE Test Bank for Economics 6th Edition Hubbard
mynursytest.store
3
Copyright © 2017 Pearson Education, Inc.
6) The production possibilities frontier model assumes which of the following?
A) Labor, capital, land, and natural resources are unlimited in quantity.
B) The economy produces only two products.
C) Production of any level of the two products that the economy produces is currently
possible.
D) The level of technology is variable.
Answer: B
Diff: 2 Page Ref: 42
Topic: Production Possibilities Frontiers
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that
can be
made from trade
AACSB: Analytical thinking
7) The attainable production points on a production possibilities curve are
A) the horizontal and vertical intercepts.
B) the points along the production possibilities frontier.
, C) the points outside the area enclosed by the production possibilities frontier.
D) the points along and inside the production possibility frontier.
Answer: D
Diff: 2 Page Ref: 42
Topic: Production Possibilities Frontiers
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that
can be
made from trade
AACSB: Analytical thinking
8) The points outside the production possibilities frontier are
A) efficient.
B) attainable.
C) inefficient.
D) unattainable.
Answer: D
Diff: 2 Page Ref: 43
Topic: Production Possibilities Frontiers
*: Recurring
Learning Outcome: Micro-3: Discuss different types of market systems and the gains that
can be
made from trade
AACSB: Analytical thinking
DOWNLOAD THE Test Bank for Economics 6th Edition Hubbard
mynursytest.store
4
Copyright © 2017 Pearson Education, Inc.
Figure 2-1
9) Refer to Figure 2-1. Point A is
A) technically efficient.
B) unattainable with current resources.
C) inefficient in that not all resources are being used.
D) the equilibrium output combination.
Answer: C
Diff: 1 Page Ref: 43
Topic: Production Possibilities Frontiers
*: Recurring
Learning Outcome: Micro-2: Interpret and analyze information presented in different types
of
