Question 1

If the production possibilities frontier between two goods is a straight line, then the

Accepted Answer

A)   opportunity cost is not a ratio.
B)   resources are equally productive in both goods.
C)   line does not qualify as a production possibilities frontier because the unattainable production points are too close to the inefficient production points.
D)   Both answers A and C are correct.
E)   Both answers A and B are correct.F) B) and C)
G) C) and D)

Question 2

What is comparative advantage?
 Give an example.

Accepted Answer

Comparative advantage is the ability of ...

Question 3

Explain why specialization and trade increases a country's overall level of consumption.

Accepted Answer

A country specializes in the activities ...

Question 4

-In the above figure, Jill's opportunity cost of producing 1 gallon of bottled water is ________ of soda.

Accepted Answer

A)   2 gallons
B)   1/2 of a gallon
C)   4 gallons
D)   1 gallon
E)   1/4 of a gallonF) All of the above
G) A) and E)

Question 5

Possibility  Robots  Pizza A040B139C237D334E430F520G60\begin{array}{ccc}	ext { Possibility } & 	ext { Robots } & 	ext { Pizza } \\hline A & 0 & 40 \B & 1 & 39 \C & 2 & 37 \D & 3 & 34 \E & 4 & 30 \F & 5 & 20 \G & 6 & 0\end{array} Possibility ABCDEFG​ Robots 0123456​ Pizza 4039373430200​​ 
-The table above shows a nation's production possibilities frontier.If the nation chooses to increase the production of robots from 2 to 3 and it is on its PPF, it will have to forgo ________ pizzas.

Accepted Answer

A)   37
B)   34
C)   3
D)   35.5
E)   None of the above answers is correct. F) A) and D)
G) B) and C)

Question 6

The United States is one of the richest nations in the world,

Accepted Answer

A)   so does not need to trade with poor nations in order to achieve any gains from trade.
B)   so might not have a comparative advantage in producing any goods.
C)   but it can still benefit from specialization and trade.
D)   so it must have a comparative advantage in the production of all goods.
E)   so it must have an absolute advantage in the production of all goods.F) All of the above
G) B) and D)

Question 7

-The above figure shows the production possibility frontier for a country. Suppose the country is producing at point D. What would be the opportunity cost to move to point C?

Accepted Answer

A)   6 thousand bottles of wine
B)   15 thousand bottles of wine
C)   Nothing, it is a free lunch
D)   This movement is not possible without economic growth.
E)   12 tons of riceF) B) and D)
G) C) and E)

Question 8

How is economic growth shown in a production possibilities frontier graph?

Accepted Answer

Economic growth is i...

Question 9

When economists state that the opportunity cost of a product increases as more of it is produced, what do they mean?
 For instance, what is the opportunity cost?
 And, where in a PPF diagram does this statement apply and where does it not apply?

Accepted Answer

In general, the opportunity cost of incr...

Question 10

The production possibilities frontier is the

Accepted Answer

A)   maximum output that can be produced at an opportunity cost of zero.
B)   minimum output that can be produced when resources are used inefficiently.
C)   boundary between the combinations of goods and services that can be produced and the combinations that cannot be produced, given the available factors of production and the state of technology.
D)   boundary between the combinations of goods and services that can be produced and the combinations that cannot be produced when technology is changing.
E)   maximum opportunity cost combinations of goods and services.F) A) and E)
G) None of the above

Question 11

Why does the production possibilities frontier have a bowed out shape rather than being a straight line?

Accepted Answer

The fact that as the production of one g...

Question 12

-The figure above shows a production possibilities frontier.In the figure, when the economy moves from point C to point B, what is the opportunity cost of a DVD?

Accepted Answer

A)   0.5 cell phones.
B)   2 cell phones.
C)   0.5 million cell phones.
D)   2 million cell phones.
E)   zero.F) A) and B)
G) B) and E)

Question 13

The above figure shows the PPF for a country that produces computers and computer factories. The nation's production possibilities frontier is PPF₀ .At which of the following production points would the economy grow most rapidly?

Accepted Answer

A)   Point A.
B)   Point B.
C)   Point C.
D)   It makes no difference among the three points because they are all production efficient.
E)   More information is needed to answer the question.F) C) and D)
G) A) and E)

Question 14

-The figure above shows the production possibilities frontier for a country.How does the opportunity cost of compact cars forgone per SUV gained moving from point C to point B compare with the movement from point B to point A?

Accepted Answer

A)   The opportunity cost of moving from point C to point B is greater than the movement from point B to point A.
B)   The opportunity cost of moving from point C to point B is the same as the movement from point B to point A.
C)   The opportunity cost of moving from point C to point B is less than the movement from point B to point A.
D)   The opportunity costs cannot be compared because the units of moving from point C to point B differ from the units of moving from point B to point A.
E)   More information is needed to determine how the two opportunity costs compare.F) A) and E)
G) B) and D)

Question 15

-The figure above shows how the PPF for cell phones and new cell-phone factories can expand.In the figure, if the economy chose the point on this year's PPF that is below point K, the next year's PPF would

Accepted Answer

A)   shift outward along the horizontal axis farther than the new PPF shown in the figure.
B)   shift outward along the horizontal axis, but not as far as the new PPF shown in the figure.
C)   shift outward along the vertical axis, not along the horizontal axis.
D)   shift inward along the horizontal axis.
E)   shift inward along the vertical axis.F) D) and E)
G) All of the above

Question 16

In the production possibilities model, the vertical axis measures ________ and the horizontal axis measures ________.

Accepted Answer

A)   the quantity of a good or service; the quantity of another good or service
B)   the price of a good or service; the quantity of the good or service
C)   the price of a good or service; the price of another good or service
D)   the quantity of a good or service; time
E)   people's wants; the quantity of a good or serviceF) C) and E)
G) B) and C)

Question 17

Mac can bake more cookies than Monica per hour.It must be true that

Accepted Answer

A)   Monica has an absolute advantage in cookie baking.
B)   Mac has an absolute advantage in baking cookies.
C)   Mac has a comparative advantage in baking cookies.
D)   Monica has a comparative advantage in baking cookies.
E)   Mac cannot benefit by trade between the two of them.F) C) and D)
G) B) and C)

Question 18

In order for Ireland to grow more potatoes, wool production must decrease.This situation is an example of

Accepted Answer

A)   producing at a point that lies beyond the PPF.
B)   zero opportunity cost.
C)   opportunity benefit.
D)   a free lunch.
E)   a tradeoff.F) C) and E)
G) A) and C)

Question 19

When a tradeoff does NOT exist between two goods, the situation is known as

Accepted Answer

A)   opportunity cost.
B)   scarcity.
C)   a free lunch.
D)   zero cost production.
E)   efficient production.F) C) and D)
G) A) and C)

Question 20

-The above figure shows the production possibility frontier for an economy. The point or points that are not attainable are

Accepted Answer

A)   points B and C.
B)   points A, B, and C.
C)   point E.
D)   points A, B, C, and D.
E)   points A and D.F) B) and C)
G) A) and C)

Exam 3: The Economic Problem

-The above figure shows the production possibility frontier for a country. Suppose the country is producing at point D. What would be the opportunity cost to move to point C?

Correct Answer
verified

-The above figure shows the production possibility frontier for an economy. The point or points that are not attainable are

Correct Answer
verified

When a tradeoff does NOT exist between two goods, the situation is known as

Correct Answer
verified

What is comparative advantage? Give an example.

Correct Answer
verified
Comparative advantage is the ability of ...
View Answer

-The figure above shows the production possibilities frontier for a country.How does the opportunity cost of compact cars forgone per SUV gained moving from point C to point B compare with the movement from point B to point A?

Correct Answer
verified

How is economic growth shown in a production possibilities frontier graph?

Correct Answer
verified
Economic growth is i...
View Answer

-The figure above shows a production possibilities frontier.In the figure, when the economy moves from point C to point B, what is the opportunity cost of a DVD?

Correct Answer
verified

-The figure above shows how the PPF for cell phones and new cell-phone factories can expand.In the figure, if the economy chose the point on this year's PPF that is below point K, the next year's PPF would

Correct Answer
verified

Correct Answer
verified

If the production possibilities frontier between two goods is a straight line, then the

Correct Answer
verified

When economists state that the opportunity cost of a product increases as more of it is produced, what do they mean? For instance, what is the opportunity cost? And, where in a PPF diagram does this statement apply and where does it not apply?

Correct Answer
verified
In general, the opportunity cost of incr...
View Answer

The production possibilities frontier is the

Correct Answer
verified

-In the above figure, Jill's opportunity cost of producing 1 gallon of bottled water is ________ of soda.

Correct Answer
verified

Mac can bake more cookies than Monica per hour.It must be true that

Correct Answer
verified

Explain why specialization and trade increases a country's overall level of consumption.

Correct Answer
verified
A country specializes in the activities ...
View Answer

The United States is one of the richest nations in the world,

Correct Answer
verified

In the production possibilities model, the vertical axis measures and the horizontal axis measures .

Correct Answer
verified

The above figure shows the PPF for a country that produces computers and computer factories. The nation's production possibilities frontier is PPF₀ .At which of the following production points would the economy grow most rapidly?

Correct Answer
verified

Why does the production possibilities frontier have a bowed out shape rather than being a straight line?

Correct Answer
verified
The fact that as the production of one g...
View Answer

In order for Ireland to grow more potatoes, wool production must decrease.This situation is an example of

Correct Answer
verified

Exam 3: The Economic Problem

-The above figure shows the production possibility frontier for a country. Suppose the country is producing at point D. What would be the opportunity cost to move to point C?

Correct AnswerverifiedShow Answer

-The above figure shows the production possibility frontier for an economy. The point or points that are not attainable are

Correct AnswerverifiedShow Answer

When a tradeoff does NOT exist between two goods, the situation is known as

Correct AnswerverifiedShow Answer

What is comparative advantage? Give an example.

Correct AnswerverifiedComparative advantage is the ability of ...View AnswerShow Answer

-The figure above shows the production possibilities frontier for a country.How does the opportunity cost of compact cars forgone per SUV gained moving from point C to point B compare with the movement from point B to point A?

Correct AnswerverifiedShow Answer

How is economic growth shown in a production possibilities frontier graph?

Correct AnswerverifiedEconomic growth is i...View AnswerShow Answer

-The figure above shows a production possibilities frontier.In the figure, when the economy moves from point C to point B, what is the opportunity cost of a DVD?

Correct AnswerverifiedShow Answer

-The figure above shows how the PPF for cell phones and new cell-phone factories can expand.In the figure, if the economy chose the point on this year's PPF that is below point K, the next year's PPF would

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If the production possibilities frontier between two goods is a straight line, then the

Correct AnswerverifiedShow Answer

When economists state that the opportunity cost of a product increases as more of it is produced, what do they mean? For instance, what is the opportunity cost? And, where in a PPF diagram does this statement apply and where does it not apply?

Correct AnswerverifiedIn general, the opportunity cost of incr...View AnswerShow Answer

The production possibilities frontier is the

Correct AnswerverifiedShow Answer

-In the above figure, Jill's opportunity cost of producing 1 gallon of bottled water is ________ of soda.

Correct AnswerverifiedShow Answer

Mac can bake more cookies than Monica per hour.It must be true that

Correct AnswerverifiedShow Answer

Explain why specialization and trade increases a country's overall level of consumption.

Correct AnswerverifiedA country specializes in the activities ...View AnswerShow Answer

The United States is one of the richest nations in the world,

Correct AnswerverifiedShow Answer

In the production possibilities model, the vertical axis measures ________ and the horizontal axis measures ________.

Correct AnswerverifiedShow Answer

The above figure shows the PPF for a country that produces computers and computer factories. The nation's production possibilities frontier is PPF₀ .At which of the following production points would the economy grow most rapidly?

Correct AnswerverifiedShow Answer

Why does the production possibilities frontier have a bowed out shape rather than being a straight line?

Correct AnswerverifiedThe fact that as the production of one g...View AnswerShow Answer

In order for Ireland to grow more potatoes, wool production must decrease.This situation is an example of

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Comparative advantage is the ability of ...
View Answer

Correct Answer
verified

Correct Answer
verified
Economic growth is i...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
In general, the opportunity cost of incr...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A country specializes in the activities ...
View Answer

Correct Answer
verified

In the production possibilities model, the vertical axis measures and the horizontal axis measures .

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The fact that as the production of one g...
View Answer

Correct Answer
verified