Which of the following would NOT be a characteristic of a market economy?

1.   ?    government ownership of the means of production
   
2.   ?    competition and unrestricted markets
3.   ?    reliance on the market system
4.   ?    free enterprise and choice

Societal attempts to "solve" the economic problem of scarcity have included which of the following?

1.   ?    Tradition based resource allocation solutions
2.   ?    Command based resource allocation solutions
3.   ?    Market based resource allocation solutions
4.   ?    Resource allocation solutions based on a mixture of the above
5.   ?    All of the above could be considered solutions to the scarcity problem in economics

The economic advantage most appropriately associated with the market solcution to the central economic problem of scarcity is

1.   ?    fairness
2.   ?    equity
3.   ?    efficiency
4.   ?    opportunity cost
5.   ?    externalities

"Market failure" occurs in economics when

1.   ?    positive externalities occur
2.   ?    negative externalities occur
3.   ?    perfect competitions occurs
4.   ?    positive externalities and/or negative externalities occur
5.   ?    A, B, and C above occur

The two measures of efficiency used in economics are

1.   ?    productive, which involves using resources in their least costly combinations; and allocative, which involves the most desirable mix of goods and services being produced
2.   ?    alloctive, which involves using resources in their least costly combinations; and productive, which involves the most desirable mix of goods and services being produced
3.   ?    market, which involves the use of cost/benefit analysis; and traditional, which uses marginal analysis
4.   ?    traditional, which involves the use of cost/benefit analysis; and market, which uses marginal analysis
5.   ?    marginal, which involves the use of averages; and total, which involves the use of sums

Based on the information above, which of the following statements is/are true?

I. The United States has an absolute advantage in producing soybeans.
II. Japan has an absolute advantage in producing rice.
III. Japan has a comparative advantage in producing soybeans.
IV. The United States should specialize in the production of soybeans, and Japan should specialize in the production of rice.

1.   ?    I only
2.   ?    III only
3.   ?    I and IV only
4.   ?    II and IV only
5.   ?    I, II, III, an IV

According to the data on the table above

1.   ?    The US will gain 2 hours if it produces just soybeans
2.   ?    Japan can make 2 bushels of rice in 14 hours
3.   ?    The US will lose 2 hours if it produces just rice
4.   ?    Japan will lose 5 hours if it produces just rice

(Figures in the table are output totals.)
Assume that countries X and Y have identical technologies and equal amounts of resources. The table above shows outputs produced per day if the countries were to make only one good or the other. Based on the information in the table above

1.   ?    country X has an absolute advantage in the production of soda only.
2.   ?    country Y has an absolute advantage in the production of soda only.
3.   ?    country X has an absolute advantage in the production of soda and chips.
4.   ?    country Y has an absolute advantage in the production of soda and chips.
5.   ?    both countries are at an equal absolute advantage.

Based on the information in the table above

1.   ?    country X has a comparative advantage in the production of soda.
2.   ?    country Y has a comparative advantage in the production of soda.
3.   ?    country X has a comparative advantage in the production of both soda and chips.
4.   ?    country Y has a comparative advantage in the production of both soda and chips.
5.   ?    country X has a comparative advantage in the production of chips.