merged

___ 21. Determining the “for whom to produce” question by the distribution of income means that:
a. resource owners have the incentive to develop their resources so that they will
produce maximum consumer satisfaction
b. resource owners may have very unequal shares of income
c. resource owners have the incentive to direct their resources to their most valuable
use
d. All of the above
Use the graph below to answer questions 22. and 23.:
. .
100 -
A
B
Production
90 -
Possibilities
. C
Frontier
80 -
70 -
. D
60 -
Fish 50 -
40 -
. E
30 -
20 -
10 -
0 .
F
0 10 20 30 40 50 60 70 80 90 100
Coconuts
___ 22. If the number of coconuts produced in this economy is increased from 40 to 70, this will
cause:
a. a shift in the Production Possibilities Frontier
b. a movement along the Production Possibilities Frontier
c. Both of the above
d. Neither of the above
___ 23. If an increase in the quantity of resources permits this economy to produce more of
both coconuts and fish, this will cause:
a. a shift in the Production Possibilities Frontier
b. a movement along the Production Possibilities Frontier
c. Both of the above
d. Neither of the above
___ 24. According to the book “Capitalism and Freedom”:
a. Capitalism is a necessary condition for individual freedom
b. In a capitalist system, economic activities are coordinated through the coercive power
of the capitalists
c. A capitalist system maximizes the government’s control of economic activities
d. All of the above
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Trade and Economic Systems 2 - 14