Government intervention may achieve a more optimal outcome than the market mechanism when addressing

The role of the entrepreneur in an economy is to

Multiple Choice
Bring the factors of production together and assume the risk of production.
Work with government planners to determine what goods are produced.
Arrange bank financing for the owners of new businesses.
Ensure full employment of labor.

Answer
Bring the factors of production together and assume the risk of production.

The "guns versus butter" dilemma that all nations confront is that

Multiple Choice
Guns and butter can be produced using the same resources at the same time.
An increase in national defense implies more sacrifices of civilian goods and services.
An increase in national defense is possible only if we produce more butter.
All of the choices are correct.
Answer
An increase in national defense implies more sacrifices of civilian goods and services.

According to the law of increasing opportunity costs,

Multiple Choice

The more one is willing to pay for resources; the smaller will be the possible level of production.
Increasing the production of a particular good will cause the price of the good to remain constant.
In order to produce additional units of a particular good, it is necessary for society to sacrifice increasingly larger amounts of alternative goods.
None of the choices are correct.
Answer
In order to produce additional units of a particular good, it is necessary for society to sacrifice increasingly larger amounts of alternative goods.

Economic growth would best be represented by a

Multiple Choice
Shift outward of the production possibilities curve.
Shift inward of the production possibilities curve.
Movement from inside the production possibilities curve to a point on the production possibilities curve.
Movement from the production possibilities curve to a point inside the production possibilities curve.
Answer
Shift outward of the production possibilities curve.

The market mechanism may best be defined as

Multiple Choice
The use of market prices and sales to signal desired output.
The use of market signals and government directives to select economic outcomes.
The process by which the production possibilities curve shifts inward.
Price regulation by government.
Answer
The use of market prices and sales to signal desired output.

Government intervention may achieve a more optimal outcome than the market mechanism when addressing

Multiple Choice
Inefficient bureaucracy.
Consumption of cigarettes.
The supply of new hot dog stands.
None of the choices are correct.
Answer
Consumption of cigarettes.

The Latin phrase ceteris paribus means

Multiple Choice
The production possibilities curve never shifts.
Laissez faire.
Other things remain equal.
The invisible hand.
Answer
Other things remain equal.

Which of the following is true about the combination of televisions and smartphones represented by point F in Figure 1.4?

Multiple Choice
Point F is inefficient now.
Point F is unattainable even with advances in technology.
Point F will be more easily attainable if the government takes control of all privately run factories.
Point F can possibly be reached if more economic resources become available or technology improves.
Answer
Point F can possibly be reached if more economic resources become available or technology improves.

A movement from point C to point A in Figure 1.4 results in

Multiple Choice
More efficient production.
Permanent unemployment of workers producing plasma televisions.
A reallocation of resources from smartphone production to television production.
A reallocation of resources from television production to smartphone production.
Answer
A reallocation of resources from television production to smartphone production.

Table 1.2 shows the hypothetical trade-off between different combinations of Stealth bombers and B-1 bombers that might be produced in a year with the limited U.S. capacity, ceteris paribus.

Table 1.2

Production Possibilities for Bombers

Refer to Table 1.2. In the production range of 20 to 35 B-1 bombers, the opportunity cost of producing 1 more B-1 bomber is

Multiple Choice
195/20 of Stealth bombers.
35/20 of Stealth bombers.
15 Stealth bombers.
1 Stealth bomber.
Answer
1 Stealth bomber.