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31) The trade-off between the present and future consumption is measured by

A) the money cost of both the present and future consumption.

B) the foregone present consumption.

C) the difference between the money price of future goods and the money cost of producing them.

D) the difference between the money price of present goods and the money cost of producing them.

 

32) Using productive resources to make capital goods requires that we

A) get everyone to agree on the best use of those resources.

B) get government approval of our plan to make capital goods.

C) forgo some level of current consumption.

D) prove that the existence of the capital goods will not cause any environmental damage.

 

33) Trading off capital goods for increasing amounts of consumer goods today will most likely result in

A) increased long-term growth.

B) decreased long-term growth.

C) decreased prices in consumer goods.

D) increases in the quantity of consumer goods.

34) A production possibilities curve will shift outward or to the right for all of the following reasons EXCEPT

A) an increase in the unemployment rate.

B) an increase in the quality of the labor force.

C) an improvement in production technology.

D) a discovery of a new source of renewable energy.

 

35) Economic growth is shown by

A) a point near the top of the production possibilities curve.

B) a point outside the production possibilities curve.

C) an inward shift of the production possibilities curve.

D) an outward shift of the production possibilities curve.

 

36) If the production of capital goods is shown along the horizontal axis of a production possibilities curve, and the production of consumer goods is shown along the vertical axis of a production possibilities curve, and the economy desires to have a rapid rate of economic growth, then the economy should produce at a point

A) near the middle of the curve dividing resources equally between the production of consumer and capital goods.

B) at a point near the vertical axis concentrating on the production of consumer goods.

C) at a point near the horizontal axis concentrating on the production of capital goods.

D) at a point inside the curve allowing the economy to adjust rapidly to changes in economic activity.

 

37) If a country wants to promote future growth, it should

A) produce more capital goods today.

B) produce more consumer goods today.

C) produce only economic goods.

D) produce only needed goods.

38) "Because resources are scarce, the production of more capital goods means that fewer resources are available to produce consumption goods, so there is less current consumption." Do you agree or disagree? Explain.

 

 

 

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