Universitat Autònoma de Barcelona
Principles of Economics, Course 2014-2015
Exercises - Multiple Choice Theme 1
Multiple choice Questions - Please mark clearly the option you consider is correct. Please kindly
note that : Correct answer =+1, No answer=0, Wrong answer = -0,25.
1. Which one of the following principles is NOT true.
a) Rational People Think at the Margin.
b) People face Trade-o¤s.
c) The cost of something is what you give up to get it.
d) Trade can not make everyone better o¤.
2. With regard to the Production Possibility Frontier (PPF):
a) The points located inside the PPF are unattainable with the resources and technology
available, at a given moment in time.
b) The points located outside the PPF are ine¢ cient points, which under-utilize the available
resources.
c) All the points on the PPF curve are feasible and e¢ cient.
d) All of the above are correct.
3. The e¢ cient use of resources means that:
a) The economy can simultaneously increase the production of all goods.
b) The opportunity cost is zero.
c) There is a positive amount of all goods.
d) To produce more of some good the production of another good has to be reduced.
4. In regard with the Production Possibilities Frontier (FPP):
a) the points located outside the PPF are unattainable with the resources and the technology
available in a moment in time.
b) the points in the interior of the PPF are ine¢ cient points, where the available resources
have been underutilized.
c) all points on the PPF are feasible and e¢ cient.
d) all the above are correct.
5. An improvement in the technology available in an economy:
a) Moves the productions possibilities frontier out.
b) Reduce the slope of the productions possibilities frontier.
c) Transform the productions possibilities frontier from what happens to be convex to be
concave.
d) None of the above.
6. In an economy producing two goods, xand y, the production possibilities frontier (PPF) is
given by y= 90 3x. The opportunity cost of producing one additional unit of xis:
1
