Question 1

Which of the following would not shift the production possibilities frontier?

Accepted Answer

A) an increase in worker training 
B) a war that destroyed many buildings 
C) a technological improvement that improved fuel efficiency in cars 
D) a decrease in the size of the labor force 
E) a change to a more inefficient production process 
A) an increase in worker training 
B) a war that destroyed many buildings 
C) a technological improvement that improved fuel efficiency in cars 
D) a decrease in the size of the labor force 
E) a change to a more inefficient production process

Question 2

Exhibit 2-2   According to Exhibit 2-2, in any given amount of time,

Accepted Answer

A) Maria has an absolute and a comparative advantage in typing 
B) Maria has an absolute and a comparative advantage in doing laundry 
C) Maria has a comparative advantage in both typing and doing laundry 
D) Hans has an absolute and a comparative advantage in typing 
E) Hans has an absolute advantage in doing laundry 
A) Maria has an absolute and a comparative advantage in typing 
B) Maria has an absolute and a comparative advantage in doing laundry 
C) Maria has a comparative advantage in both typing and doing laundry 
D) Hans has an absolute and a comparative advantage in typing 
E) Hans has an absolute advantage in doing laundry

Question 3

Exhibit 2-11     Refer to exhibit 2-11.In Costa Rica the opportunity cost of 1 ton of rice is:

Accepted Answer

A) 1/2 of a T-shirt 
B) 3/4 of a T-shirt 
C) 1 T-shirt 
D) 11/2 T-shirts 
E) 2 T-shirts 
A) 1/2 of a T-shirt 
B) 3/4 of a T-shirt 
C) 1 T-shirt 
D) 11/2 T-shirts 
E) 2 T-shirts

Question 4

Exhibit 2-4   Point e in Exhibit 2-4 represents

Accepted Answer

A) an attainable combination of good A and good B 
B) an unattainable combination of good A and good B 
C) the combination of good A and good B that the economy will produce 
D) one possible efficient combination of good A and good B 
E) the only unattainable combination of good A and good B 
A) an attainable combination of good A and good B 
B) an unattainable combination of good A and good B 
C) the combination of good A and good B that the economy will produce 
D) one possible efficient combination of good A and good B 
E) the only unattainable combination of good A and good B

Question 5

The law of increasing opportunity cost reflects the fact that

Accepted Answer

A) the production possibilities frontier is bowed inward 
B) resources are not perfectly substitutable 
C) resources cannot always be used efficiently 
D) an economy will operate at a point inside the production possibilities frontier 
E) an economy will operate at a point along the production possibilities frontier 
A) the production possibilities frontier is bowed inward 
B) resources are not perfectly substitutable 
C) resources cannot always be used efficiently 
D) an economy will operate at a point inside the production possibilities frontier 
E) an economy will operate at a point along the production possibilities frontier

Question 6

In economics, specialization means

Accepted Answer

A) producing something using only one type of resource, such as labor 
B) producing something using only one type of labor 
C) focusing efforts on a particular product or a single task 
D) producing only one unit of output 
E) producing something using only one unit of a variable resource 
A) producing something using only one type of resource, such as labor 
B) producing something using only one type of labor 
C) focusing efforts on a particular product or a single task 
D) producing only one unit of output 
E) producing something using only one unit of a variable resource

Question 7

Points inside the production possibilities frontier represent

Accepted Answer

A) full and efficient use of all resources 
B) inefficiency or unemployment (or both) 
C) currently unattainable combinations of outputs 
D) currently unattainable combinations of resources 
E) the most desirable combinations of outputs 
A) full and efficient use of all resources 
B) inefficiency or unemployment (or both) 
C) currently unattainable combinations of outputs 
D) currently unattainable combinations of resources 
E) the most desirable combinations of outputs

Question 8

Exhibit 2-10         Refer to Exhibit 2-10.Which of the graphs best illustrates the impact on the production possibilities frontier of a technological improvement that will make the resources used to produce consumer goods more efficient?

Accepted Answer

A) a 
B) b 
C) c 
D) d 
E) b and c 
A) a 
B) b 
C) c 
D) d 
E) b and c

Question 9

Which of the following would shift the production possibilities frontier outward?

Accepted Answer

A) a reduction in inefficiency 
B) a reduction in the size of the labor force 
C) an improvement in technology 
D) a change in the combination of goods produced 
E) increasing opportunity costs 
A) a reduction in inefficiency 
B) a reduction in the size of the labor force 
C) an improvement in technology 
D) a change in the combination of goods produced 
E) increasing opportunity costs

Question 10

The law of comparative advantage does not apply to

Accepted Answer

A) entire nations 
B) natural resources like air and sunshine 
C) individuals 
D) firms 
E) regions of a country 
A) entire nations 
B) natural resources like air and sunshine 
C) individuals 
D) firms 
E) regions of a country

Question 11

The production possibilities frontier can be used to show all of the following except one.Which is the exception?

Accepted Answer

A) scarcity 
B) opportunity cost 
C) the law of increasing opportunity cost 
D) efficiency 
E) the best combination of goods and services for an economy 
A) scarcity 
B) opportunity cost 
C) the law of increasing opportunity cost 
D) efficiency 
E) the best combination of goods and services for an economy

Which of the following would not shift the production possibilities frontier?

Exhibit 2-2 According to Exhibit 2-2, in any given amount of time,

Exhibit 2-11 Refer to exhibit 2-11.In Costa Rica the opportunity cost of 1 ton of rice is:

Exhibit 2-4 Point e in Exhibit 2-4 represents

The law of increasing opportunity cost reflects the fact that

In economics, specialization means

Points inside the production possibilities frontier represent

Exhibit 2-10 Refer to Exhibit 2-10.Which of the graphs best illustrates the impact on the production possibilities frontier of a technological improvement that will make the resources used to produce consumer goods more efficient?

Which of the following would shift the production possibilities frontier outward?

The law of comparative advantage does not apply to

The production possibilities frontier can be used to show all of the following except one.Which is the exception?

The Art and Science of Economic Analysis

Appendix--Understanding Graphs

Economic Decision Makers

Demand, Supply, and Markets

Elasticity of Demand and Supply

Appendix--Price Elasticity and Tax Incidence

Consumer Choice and Demand

Appendix--Indifference Curves and Utility Maximization

Production and Cost in the Firm

A--Perfect Competition

B--Perfect Competition

A--Monopoly

B--Monopoly

Monopolistic Competition and Oligopoly

Resource Markets

Labor Markets and Labor Unions

Capital, Interest, and Corporate Finance

Transaction Costs, Imperfect Information, and Behavioral Economics

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Externalities and the Environment

Income Distribution and Poverty

International Trade

International Finance

Economic Development

Filters

Exam 2: Economic Tools and Economics Systems

Which of the following would not shift the production possibilities frontier?

Exhibit 2-2 According to Exhibit 2-2, in any given amount of time,

Exhibit 2-11 Refer to exhibit 2-11.In Costa Rica the opportunity cost of 1 ton of rice is:

Exhibit 2-4 Point e in Exhibit 2-4 represents

The law of increasing opportunity cost reflects the fact that

In economics, specialization means

Points inside the production possibilities frontier represent

Exhibit 2-10 Refer to Exhibit 2-10.Which of the graphs best illustrates the impact on the production possibilities frontier of a technological improvement that will make the resources used to produce consumer goods more efficient?

Which of the following would shift the production possibilities frontier outward?

The law of comparative advantage does not apply to

The production possibilities frontier can be used to show all of the following except one.Which is the exception?

The Art and Science of Economic Analysis

Appendix--Understanding Graphs

Economic Decision Makers

Demand, Supply, and Markets

Elasticity of Demand and Supply

Appendix--Price Elasticity and Tax Incidence

Consumer Choice and Demand

Appendix--Indifference Curves and Utility Maximization

Production and Cost in the Firm

A--Perfect Competition

B--Perfect Competition

A--Monopoly

B--Monopoly

Monopolistic Competition and Oligopoly

Resource Markets

Labor Markets and Labor Unions

Capital, Interest, and Corporate Finance

Transaction Costs, Imperfect Information, and Behavioral Economics

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Externalities and the Environment

Income Distribution and Poverty

International Trade

International Finance

Economic Development

Filters