Question 1. A test was scheduled for Monday morning, but you went to a party on Saturday night. If you hadn't attended the party, you could have studied for the test or gone to a movie. Which of the following sentences is true?
a. The opportunity cost of going to the movie is studying for the test.
b. The opportunity cost of going to the party is the movie.
c. The opportunity cost of going to the party is both the movie and the study time.
d. Because you could go to the party only that night but could go to a movie any time, the opportunity cost of the party is the study time.
e. From the above information, it's not possible to determine the opportunity cost of attending the party.
Question 2. In one week, Mohammed can knit 5 sweaters or bake 240 cookies. The opportunity cost per cookie for Mohammed is
a. $5
b. 5 sweaters
c. 48 sweaters
d. 1/48 of a sweater
e. 48 cookies
Question 3. Because of specialization and comparative advantage, most people
a. consume only what they produce themselves
b. consume the products produced by their family and friends
c. consume the products of many other specialists
d. do not use money as a medium of exchange
e. share whatever they produce
Question 4. True or false -A point inside the production possibilities curve illustrates that resources are not being fully employed
Question 5: Because resources are not perfectly adaptable to the production of both good A and good B,
a. the opportunity cost of A increases as production of A increases
b. the opportunity cost of A decreases as production of A increases
c. it is impossible for the economy to produce both A and B
d. the opportunity cost of A is constant
e. the opportunity cost of B is constant