Question 1

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The United States can use all its resources to produce 250 DVDs or 500 shoes. China can use all of its resources to produce 30 DVDs or 300 shoes. The opportunity cost of producing a DVD in the United States is


Question 2


The relationship between real GDP and potential GDP over the business cycle can be best summarized by which of the following statements?


Question 3


A south sea island produces only coconuts. In 2012, the price of a coconut is $1 and the quantity produced is 200. In 2013, the price of a coconut is $1.50 and the quantity produced is 250. 2012 is the base year. Real GDP in 2013 is ________.


Question 4


Computer chips are a normal good. Suppose the economy slips into a recession so that income falls. As a result, the demand for computer chips ________ so that the price of a computer chip ________.




The expenditure approach to measuring GDP is done by using data on only


Question 6


Scarcity requires that we


Question 7


Why is a production possibilities frontier bowed out (concave)?


Question 8


The law of supply states that, other things remaining the same,


Question 9


When a person has a comparative advantage in producing a good or service, the person has


Question 10


The difference between nominal GDP and real GDP is


Question 11


Assume a competitive market is in equilibrium. There is an increase in demand, but no change in supply. As a result the equilibrium price ________, and the equilibrium quantity ________.


Question 12


GDP is best defined as the ________ in a given time period.


Question 13


The circular flow model is used to show the


Question 14


Real GDP can increase if the


Question 15         


A point on the production possibilities frontier reflects an


Question 16


Consumers regard Dell computers and Apple computers as substitutes. If the price of a Dell computer decreases, the


Question 17


Hank requires 1 hour to cut the grass and 3 hours to clean the house. His sister Holly requires 1 hour to cut the grass and 4 hours to clean the house. Which of the following statements is true?


Question 18


The demand for oranges increases while the supply decreases. The equilibrium price of oranges ________, and the equilibrium quantity ________.


Question 19


In order to measure gross domestic product, we can follow


Question 20


The opportunity cost of one more slice of pizza in terms of sodas is the




Question 21


One reason the total sum of the income categories does not equal GDP is that


Question 22


The law of demand implies that, other things remaining the same,


Question 23


Moving along the production possibilities frontier itself illustrates


Question 24


What is gained when people engage in specialization and trade?


Question 25


Because of the circular flows of expenditure and income in the economy, total ________ equals total ________ equals total ________.






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