Bus 475 Samples

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15) A country's consumption possibilities frontier can be outside its production possibilities frontier if __________.

A. the country engages in trade
B. the citizens of the country have a greater desire to consume goods and services than do the citizens of other countries C. the country imports more than it exports
D. the country’s technology is superior to the technologies of other countries

16) In computing GDP, market prices are used to value final goods and services because __________.

A. if market prices are out of line with how people value goods, the government sets price ceilings and price floors B. market prices do not change much over time, so it is easy to make comparisons between years C. Market prices are not used in computing GDP

D. market prices reflect the values of goods and services

17) A logical starting point from which the study of international trade begins is __________.

A. the principle of absolute advantage
B. the recognition that government intervention in markets sometimes enhances the economic welfare of the society C. the principle of comparative advantage
D. the recognition that not all markets are competitive

18) Which of the following statements about GDP is correct?

A. GDP is to a nation’s economy as household income is to a household. B. Money continuously flows from households to government and then back to households, and GDP measures this flow of money. C. GDP increases if the total population increases.

D. GDP measures two things at once: the total income of everyone in the economy and the unemployment rate.

19) In economics, the cost of something is __________.

A. what you give up to get it
B. always measured in units of time given up to get it
C. often impossible to quantify, even in principle
D. the dollar amount of obtaining it

20) For a college student who wishes to calculate the true costs of going to college, the costs of room and board __________.

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