ECON 1015 - EXAM 1 QUESTIONS AND ANSWERS GRADED A+
When constructing a production possibilities frontier, which of the following assumptions is not
made?
a. The economy produces only two goods or two types of goods.
b. Firms produce goods using factors of production.
c. The technology available to firms is given.
d. The quantities of the factors of production that are available are increasing over the relevant
time period. - Answers d. The quantities of the factors of production that are available are
increasing over the relevant time period.
When an economy is operating at a point on its production possibilities frontier, then
a. consumers are content with the mix of goods and services that is being produced.
b. there is no way to produce more of one good without producing less of the other.
c. equal amounts of the two goods are being produced.
d. All of the above are correct. - Answers b. there is no way to produce more of one good
without producing less of the other.
In a certain economy, jam and bread are produced, and the economy currently operates on its
production possibilities frontier. Which of the following events would allow the economy to
produce more jam and more bread, relative to the quantities of those goods that are being
produced now?
, a. Unemployed labor is put to work producing jam and bread.
b. The economy puts its idle capital to work producing jam and bread.
c. The economy experiences economic growth.
d. All of the above are correct. - Answers c. The economy experiences economic growth.
A normative economic statement such as "The minimum wage should be abolished"
a. would likely be made by an economist acting as a scientist.
b. would require values and data to be evaluated.
c. would require data but not values to be evaluated.
d. could not be evaluated by economists acting as policy advisers. - Answers b. would require
values and data to be evaluated.
Alexis is a lawyer. She bills her clients $100 an hour for her services. She can also mow her lawn
in 30 minutes. She can hire someone to mow her lawn who takes an hour. Of the following
prices, which is the highest Alexis would pay someone to mow her lawn?
a. $99
b. $49
c. $29
When constructing a production possibilities frontier, which of the following assumptions is not
made?
a. The economy produces only two goods or two types of goods.
b. Firms produce goods using factors of production.
c. The technology available to firms is given.
d. The quantities of the factors of production that are available are increasing over the relevant
time period. - Answers d. The quantities of the factors of production that are available are
increasing over the relevant time period.
When an economy is operating at a point on its production possibilities frontier, then
a. consumers are content with the mix of goods and services that is being produced.
b. there is no way to produce more of one good without producing less of the other.
c. equal amounts of the two goods are being produced.
d. All of the above are correct. - Answers b. there is no way to produce more of one good
without producing less of the other.
In a certain economy, jam and bread are produced, and the economy currently operates on its
production possibilities frontier. Which of the following events would allow the economy to
produce more jam and more bread, relative to the quantities of those goods that are being
produced now?
, a. Unemployed labor is put to work producing jam and bread.
b. The economy puts its idle capital to work producing jam and bread.
c. The economy experiences economic growth.
d. All of the above are correct. - Answers c. The economy experiences economic growth.
A normative economic statement such as "The minimum wage should be abolished"
a. would likely be made by an economist acting as a scientist.
b. would require values and data to be evaluated.
c. would require data but not values to be evaluated.
d. could not be evaluated by economists acting as policy advisers. - Answers b. would require
values and data to be evaluated.
Alexis is a lawyer. She bills her clients $100 an hour for her services. She can also mow her lawn
in 30 minutes. She can hire someone to mow her lawn who takes an hour. Of the following
prices, which is the highest Alexis would pay someone to mow her lawn?
a. $99
b. $49
c. $29
