34) When production shifts from making one product to another product, more and more resources are needed to increase production of the second product

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34) When production shifts from making one product to another product, more and more resources are needed to increase production of the second product. This tendency is called the

a. marginal benefit.

b. economic transition.

c. voluntary exchange.

d. law of increasing costs.

 

35. Refer to Figure 2.4 on page 29 in your textbook. Which statement best describes the circular flow of a market economy?

a. Physical flow and monetary flow always go in the same direction.

b. Monetary flow always goes from firms to households.

c. Households pay for goods and services; firms pay for land, labor, and capital.

d. Physical flow always goes from households to firms.

 

36. Which of the following best describes the economy of the United States?

a. completely laissez faire

b. centrally planned economy

c. socialist economy

d. mixed economy

 

38. A traditional economy relies on __________ to answer the three basic economic questions.

a. the government

b. specialization

c. family customs

d. incentives

 

40. When an economy grows, its production possibilities frontier

a. shifts to the right.

b. shifts to the left.

c. shifts upward.

d. shifts downward.

 

42. Which statement about the American government's power to tax is TRUE?

a. The president can create new taxes with executive orders.

b. The Sixteenth Amendment says only state and local governments can tax income.

c. Congress can levy direct taxes based on income.

d. All federal taxes are indirect taxes.

 

45. A farm grows corn and alfalfa. What would happen if the farm owner could not get enough workers to plant all the fields?

a. Taxes will go up.

b. The farm will be most efficient.

c. Less corn and alfalfa can be grown.

d. The demand for corn will grow.

 

46. Refer to Figure 2.12 on page 42 in your textbook. According to the continuum of mixed economies, which country is closest to a completely laissez faire, unregulated economy?

a. North Korea

b. Mexico

c. Singapore

d. United State

 

48. Refer to Figure 2.17 on page 53 in your textbook. How is standard of living figured?

a. The tax rate is multiplied by total population.

b. Education and health measures are multiplied by total population.

c. Gross domestic product is divided by total population.

d. Education and health measures are multiplied by total population.

 

49. What would a company do to increase its human capital?

a. build a company cafeteria

b. hire more part-time workers

c. pay for employees' education

d. lease cars for employees

 

50. Refer to Figure 2.10 on page 40 in your textbook. Which statement about circular flow in a mixed economy is FALSE?

a. Firms may tax households directly.

b. Government purchases land, labor, and capital from households.

c. Government purchases goods and services from firms.

d. The government taxes firms and households.