UNIT 2 and 3 - Answer the Following MCQs 1.Gross Domestic Product (GDP) per capita is a. GDP in current dollars b. GDP adjusted for inflation c. GDP per person d. GDP per dollar spent e. GDP per day 2. Which of the following is a common way of measuring the average standard of living? a. The unemployment rate plus the inflation rate b. Real GDP divided by the price level c. The unemployment rate multiplied by the population d. Real GDP divided by the population e. Inflation rate divided by the population 3. Economic growth is defined as a long-run increase in an economy's a. resources b. employment rate c. total output of goods and services d. level of profits e. money supply 4. Rich countries (measured by GDP per capita) tend to have __________ infant mortality rates, __________ life expectancies at birth, and __________ adult literacy rates than poor countries. a. higher; higher; higher b. lower; higher; higher c. lower; lower; higher d. lower; lower; lower e. lower; higher; lower 5. The three most important sources of economic growth are a. increases in employment, protection of resources, and changes in technology b. decreases in employment, decreases in the money supply, and improvements in technology c. increases in employment, increases in the capital stock, and reductions in environmental pollution d. increases in employment, increases in the capital stock, and improvements in technology e. increases in employment, decreases in the money supply, and increases in capital stock 6. The employment-population ratio is a. percentage of the population unemployed b. percentage of the population employed c. the same as the unemployment rate d. always greater than 1 e. percentage of the population employed by the private sector. 8. Which of the following could cause economic growth? a. Growth in productivity b. Growth in the employment-population ratio c. Growth in the average number of hours worked d. Growth in the population e. All of these 9. An increasing percentage of women are in the work force. Which variable does this directly affect? a. The employment-population ratio b. Productivity c. Average hours d. Population e. Technology 10. In the 1970s and 1980s policies that required retirement of people over age 65 were repealed. Which variable would this directly affect? a. The employment-population ratio b. Productivity c. Average hours d. Population e. Technology 1.By better utilizing existing resources, an economy can produce at a point outside of its current production possibilities frontier. a. True b. False 2. The production possibilities frontier is useful for demonstrating both scarcity and productive inefficiency. a. True b. False Figure 2-1 3. Figure 2-1 illustrates the trade-off for a particular student between time spent studying per week and income per week from working part-time. What is the opportunity cost for this person of moving from point a to point b? a. $5 of income per week b. $10 of income per week c. two hours of studying per week d. $10 per hour of studying per week e. $20 of income per week 4. Figure 2-1 illustrates the trade-off for a particular student between time spent studying per week and income per week from working part-time. What is the opportunity cost for this person of moving from point b to point a? a. $5 of income per week b. $10 of income per week c. two hours of studying per week d. $10 per hour of studying per week e. $20 of income per week 5. Figure 2-1 illustrates the trade-off for a particular student between time spent studying per week and income per week from working part-time. If this student does not study at all, how much income can they earn? a. $0 b. $40 c. $80 d. $100 e. $120 6. The production possibilities frontier illustrates a. the combinations of goods that could be produced with resources and technology constant b. how technology influences opportunity costs c. the law of diminishing returns d. how price changes affect decision making of individuals e. the law of demand 7. When there is an improvement in technology, holding all else constant, a. the production possibilities frontier will shift inward b. society faces larger opportunity costs from shifting productive resources from one use to another c. goods and services will increase in price d. the economy must have some idle resources e. the production possibilities frontier will shift outward 8. Which of the following could lead to an inward shift of the production possibilities frontier? a. an increase in the cost of one good b. an increase in the utilization of resources c. a rise in the level of technology d. a law is passed whereby a mandatory retirement age of 60 is imposed e. a decrease in the utilization of resources 9. One of the concepts that is illustrated by a downward sloping production possibilities frontier is that a. technology must change in order to produce more of a particular good b. to produce more of one good, some of the alternative goods must be given up c. opportunity cost generally declines as more of a good is produced d. specialization leads to gains in overall utility for society e. opportunity cost generally does not vary as more of a good is produced Point A B C D E Figure 2-5 #Rockets 20 18 14 8 0 #Cruise Ships 0 6 10 12 13 10. Figure 2-5 shows five different combinations of rockets and cruise ships that a country could manufacture. Suppose it decided to produce 18 rockets and 12 cruise ships. Which of the following would be true? a. This combination could not be produced. b. The country will be at point B. c. The country will be at point C. d. The country will not be fully utilizing its resources. e. The country will be at the midpoint of points B and D.
