MCQs on scarcity and production possibilities frontier.

1) The slope of a typical production possibilities frontier reflects the fact which

1. Some systems of market organization are more efficient than others.

2. The invisible hand always functions smoothly in a market system without government intervention.

3. When resources are allocated efficiently, it's impossible to capable to produce more of anything without producing less of something else

4. Production is only possible when resources are allocated efficiently.

2) The production possibilities frontier illustrates

1. The constant rate of technological progress.

2. The fundamental concept of scarcity.

3. The rapid growth of the U.S. economy.

4. Which guns always business for butter.

3) Which type of economic system will capable to produce the highest degree of locative efficiency?

1. A purely competitive market system

2. A purely command economic system

3. A market system with limited price controls and price ceilings

4. A command system with limited market activity for non-essentials

4) The nation listed below whose economy comes closest to a centrally planned economy is

1. People's Republic of China

2. Japan.

3. United Kingdom.

4. United States.

5) The nation listed below whose economy currently comes closest to a free market is

1. North Korea)

2. Germany.

3. People's Republic of China

4. Cuba

6) As we move down the production possibilities schedule in figure each successive point is

1. Less efficient.

2. More efficient.

3. Equally efficient.

4. More or less efficient; we cannot tell which

7) Which of the points are efficient allocations of resources?

1. A, B, and C

2. B and C only

3. C and B and D

4. B only

8) Using prices to promote efficiency in the utilization of bridges,

1. Higher prices should be charged for the use of the most crowded bridges.

2. Lower prices should be charged for the use of the uncrowned bridges.

3. Traffic would be equalized among the bridges where space is a scarce resource

4. All of the above are correct.

9) If parking spaces on a college campus are scarce, with quantity demanded during the "peak" hours, from 8 a)m. to 11 a.m., far greater than the number of spaces, an economist would propose as an efficient solution,

1. Lowering the parking fees during those hours to compensate students for the longer search time.

2. Charging the same parking fees during all hours of the school day.

3. Raising parking fees during the peak hours to encourage some students to schedule classes during other hours when parking fees

are lower.

4. Hiring more security guards to patrol for illegal parkers.

10) Which of the subsequent is an imperfection of market economies?

1. They capable to produce inexpensive services but expensive manufactured goods.

2. They place undue importance on the needs of future generations.

3. They cannot provide certain goods such as national defence.

4. They distribute income too unequally.