Question 1

In general,if country A is accumulating capital at a faster rate than country B,then country A

Accepted Answer

A) will soon have a comparative advantage in the production of most goods. 
B) is using a larger proportion of resources to produce consumption goods. 
C) will have a production possibilities frontier that is shifting outward faster than country B's. 
D) will have a higher rate of inflation than country B. 
E) will have more unemployment than country B. 
A) will soon have a comparative advantage in the production of most goods. 
B) is using a larger proportion of resources to produce consumption goods. 
C) will have a production possibilities frontier that is shifting outward faster than country B's. 
D) will have a higher rate of inflation than country B. 
E) will have more unemployment than country B.

Question 2

Use the figure below to answer the following questions.   Figure 2.1.2
-Refer to the production possibilities frontier in Figure 2.1.2.At point C,what is the opportunity cost of increasing the production of Y from 20 to 50 units?

Accepted Answer

A) 6 units of X 
B) 2 units of X 
C) 8 units of X 
D) 20 units of Y 
E) 30 units of Y 
A) 6 units of X 
B) 2 units of X 
C) 8 units of X 
D) 20 units of Y 
E) 30 units of Y

Question 3

Tom and Don have different opportunity costs of producing two goods.If Tom and Don specialize in producing the goods in which each has a comparative advantage and they exchange goods,then

Accepted Answer

A) they each lose because they are no longer able to produce and consume both goods. 
B) one of them will gain and one of them will lose. 
C) each will gain because each can consume a combination of goods that is outside his production possibilities frontier. 
D) each will produce a combination of goods that is outside his production possibilities frontier. 
E) each will produce a combination of goods that is inside his production possibilities frontier. 
A) they each lose because they are no longer able to produce and consume both goods. 
B) one of them will gain and one of them will lose. 
C) each will gain because each can consume a combination of goods that is outside his production possibilities frontier. 
D) each will produce a combination of goods that is outside his production possibilities frontier. 
E) each will produce a combination of goods that is inside his production possibilities frontier.

Question 4

A property right is

Accepted Answer

A) any commodity or token that is generally acceptable as a means of payment. 
B) an economic unit that hires factors of production and organizes those factors to produce and sell goods and services. 
C) any arrangement that enables buyers and sellers to get information and to do business with each other. 
D) a social arrangement that governs the ownership,use,and disposable of anything that people value. 
E) a medium of exchange. 
A) any commodity or token that is generally acceptable as a means of payment. 
B) an economic unit that hires factors of production and organizes those factors to produce and sell goods and services. 
C) any arrangement that enables buyers and sellers to get information and to do business with each other. 
D) a social arrangement that governs the ownership,use,and disposable of anything that people value. 
E) a medium of exchange.

Question 5

The development of new goods and better ways of producing goods and services is

Accepted Answer

A) capital accumulation. 
B) technological change. 
C) the big tradeoff. 
D) allocative efficiency. 
E) production efficiency. 
A) capital accumulation. 
B) technological change. 
C) the big tradeoff. 
D) allocative efficiency. 
E) production efficiency.

Question 6

Microsoft's marginal cost of the 100th copy of Microsoft Windows 10 is

Accepted Answer

A) the maximum amount that someone is willing to pay for the 100th copy of Windows 10. 
B) equal to the marginal benefit from the 100th copy of Windows 10. 
C) the opportunity cost of producing the 100th copy of Windows 10. 
D) the maximum amount that someone is willing to pay Microsoft to obtain the code that supports Windows 10. 
E) greater than the marginal benefit from the 100th copy of Windows 10. 
A) the maximum amount that someone is willing to pay for the 100th copy of Windows 10. 
B) equal to the marginal benefit from the 100th copy of Windows 10. 
C) the opportunity cost of producing the 100th copy of Windows 10. 
D) the maximum amount that someone is willing to pay Microsoft to obtain the code that supports Windows 10. 
E) greater than the marginal benefit from the 100th copy of Windows 10.

Question 7

A movement along the production possibilities frontier results from

Accepted Answer

A) technological change. 
B) a change in capital stock. 
C) a change in the size of the labour force. 
D) a change in the quantity of human capital. 
E) an increase in production of the good measured on the x-axis and a decrease in production of the good measured on the y-axis. 
A) technological change. 
B) a change in capital stock. 
C) a change in the size of the labour force. 
D) a change in the quantity of human capital. 
E) an increase in production of the good measured on the x-axis and a decrease in production of the good measured on the y-axis.

Question 8

Consider a PPF that measures the production of quilts on the y-axis and the production of pillows on the x-axis.As the firm moves along this PPF,the production of

Accepted Answer

A) all goods other than pillows and quilts is decreasing. 
B) all goods other than pillows and quilts remains constant. 
C) all goods other than pillows and quilts is increasing. 
D) pillows and quilts are both increasing. 
E) pillows and quilts are both decreasing. 
A) all goods other than pillows and quilts is decreasing. 
B) all goods other than pillows and quilts remains constant. 
C) all goods other than pillows and quilts is increasing. 
D) pillows and quilts are both increasing. 
E) pillows and quilts are both decreasing.

Question 9

Use the figure below to answer the following questions.
Table 2.3.1
The planets of Vulcan and Romulus each produce goods X and Y.
The following table gives points on their production possibilities frontiers.  
-Refer to Table 2.3.1.For Romulus,the opportunity cost of producing an additional unit of Y is

Accepted Answer

A) 2/3 units of X. 
B) 1/2 unit of X. 
C) 2 units of X. 
D) 3 units of X. 
E) 3/2 units of Y. 
A) 2/3 units of X. 
B) 1/2 unit of X. 
C) 2 units of X. 
D) 3 units of X. 
E) 3/2 units of Y.

Question 10

Use the table below to answer the following question.
Table 2.1.4
Consider the following production possibilities for a student for the typical week:  
-Refer to Table 2.1.4.Complete the following sentence.The production possibilities frontier in the table shows

Accepted Answer

A) increasing opportunity cost. 
B) learning-by-doing. 
C) constant opportunity cost. 
D) under-utilization of resources. 
E) decreasing opportunity cost. 
A) increasing opportunity cost. 
B) learning-by-doing. 
C) constant opportunity cost. 
D) under-utilization of resources. 
E) decreasing opportunity cost.

Question 11

Use the figure below to answer the following questions.   Figure 2.1.1
-Refer to the production possibilities frontier in Figure 2.1.1.Which one of the following statements is true about point A?

Accepted Answer

A) It is unattainable. 
B) Although no more of good Y can be produced,more of good X can be produced. 
C) It is preferred to point B. 
D) Resources are either unused or misallocated or both. 
E) Although no more of good X can be produced,more of good Y can be produced. 
A) It is unattainable. 
B) Although no more of good Y can be produced,more of good X can be produced. 
C) It is preferred to point B. 
D) Resources are either unused or misallocated or both. 
E) Although no more of good X can be produced,more of good Y can be produced.

Question 12

Economic growth ________ overcome scarcity because ________.

Accepted Answer

A) does;with economic growth the PPF rotates outward and eventually becomes a horizontal line 
B) does;we will eventually reach the point where we have too much 
C) does not;we can produce more goods and services but it is still impossible to satisfy all our wants 
D) does not;economic growth requires capital accumulation and technological change 
E) does;with economic growth the PPF rotates outward and eventually becomes a vertical line 
A) does;with economic growth the PPF rotates outward and eventually becomes a horizontal line 
B) does;we will eventually reach the point where we have too much 
C) does not;we can produce more goods and services but it is still impossible to satisfy all our wants 
D) does not;economic growth requires capital accumulation and technological change 
E) does;with economic growth the PPF rotates outward and eventually becomes a vertical line

Question 13

Choose the correct statements. 1.Opportunity cost of a good is the increase in the quantity produced of one good divided by the decrease in the quantity produced of another good as we move along the PPF.
2.The opportunity cost of an action is the highest-valued alternative forgone.
3.Opportunity cost is a ratio.
4.There is no relationship between the opportunity cost of producing an additional good measured on the x-axis and the opportunity cost of producing an additional good measured on the y-axis.

Accepted Answer

A) Statements 1 and 3 are correct. 
B) Statements 1 and 2 are correct. 
C) Statements 2 and 3 are correct. 
D) Statements 2 and 4 are correct. 
E) Statements 3 and 4 are correct. 
A) Statements 1 and 3 are correct. 
B) Statements 1 and 2 are correct. 
C) Statements 2 and 3 are correct. 
D) Statements 2 and 4 are correct. 
E) Statements 3 and 4 are correct.

Question 14

Use the information below to answer the following questions.
Fact 2.3.1
In an eight-hour day,Andy can produce either 24 loaves of bread or 8 kilograms of butter.In an eight-hour day,Rolfe can produce either 8 loaves of bread or 8 kilograms of butter.
-From Fact 2.3.1,we know that

Accepted Answer

A) Andy has the lower opportunity cost of producing bread,while Andy and Rolfe have equal opportunity costs of producing butter. 
B) Andy has the lower opportunity cost of producing both bread and butter. 
C) Andy has the lower opportunity cost of producing bread,while Rolfe has the lower opportunity cost of producing butter. 
D) Andy has the lower opportunity cost of producing butter,while Rolfe has the lower opportunity cost of producing bread. 
E) Andy has the higher opportunity cost of producing both bread and butter. 
A) Andy has the lower opportunity cost of producing bread,while Andy and Rolfe have equal opportunity costs of producing butter. 
B) Andy has the lower opportunity cost of producing both bread and butter. 
C) Andy has the lower opportunity cost of producing bread,while Rolfe has the lower opportunity cost of producing butter. 
D) Andy has the lower opportunity cost of producing butter,while Rolfe has the lower opportunity cost of producing bread. 
E) Andy has the higher opportunity cost of producing both bread and butter.

Question 15

The principle of decreasing marginal benefit implies that the

Accepted Answer

A) additional benefit from obtaining one more unit of a good or service decreases as more of that good or service is consumed. 
B) additional benefit from obtaining one more unit of a good or service increases as more of that good or service is consumed. 
C) total benefit from obtaining more of a good or service decreases as more is consumed. 
D) total benefit from obtaining more of a good or service remains the same as more is consumed. 
E) additional benefit from producing one more unit of a good or service decreases as more of that good or service is produced. 
A) additional benefit from obtaining one more unit of a good or service decreases as more of that good or service is consumed. 
B) additional benefit from obtaining one more unit of a good or service increases as more of that good or service is consumed. 
C) total benefit from obtaining more of a good or service decreases as more is consumed. 
D) total benefit from obtaining more of a good or service remains the same as more is consumed. 
E) additional benefit from producing one more unit of a good or service decreases as more of that good or service is produced.

Question 16

Use the figure below to answer the following questions.   Figure 2.1.6
-Figure 2.1.6 shows the production possibilities frontier for a firm that produces pet food.This PPF ________ illustrate scarcity because ________.

Accepted Answer

A) does;the firm cannot produce points outside the frontier,and as the firm moves along the PPF,it cannot produce more dog biscuits without producing less cat food 
B) does not;the firm can produce any quantity it wants if it is willing to charge a high enough price 
C) does not;the PPF is downward sloping 
D) does;as more is produced,consumers must pay a higher price 
E) does not;scarcity does not occur in the market for pet food 
A) does;the firm cannot produce points outside the frontier,and as the firm moves along the PPF,it cannot produce more dog biscuits without producing less cat food 
B) does not;the firm can produce any quantity it wants if it is willing to charge a high enough price 
C) does not;the PPF is downward sloping 
D) does;as more is produced,consumers must pay a higher price 
E) does not;scarcity does not occur in the market for pet food

Question 17

Use the table below to answer the following questions.
Table 2.1.2
Production Possibilities  
-Refer to Table 2.1.2.According to this production possibilities frontier,

Accepted Answer

A) a combination of 6 kilograms of butter and 1 snowshoe is inefficient. 
B) a combination of 0 kilograms of butter and 4 snowshoes is attainable. 
C) resources are equally useful in all activities. 
D) the opportunity cost of producing snowshoes increases as more snowshoes are produced. 
E) the opportunity cost of producing snowshoes decreases as more snowshoes are produced. 
A) a combination of 6 kilograms of butter and 1 snowshoe is inefficient. 
B) a combination of 0 kilograms of butter and 4 snowshoes is attainable. 
C) resources are equally useful in all activities. 
D) the opportunity cost of producing snowshoes increases as more snowshoes are produced. 
E) the opportunity cost of producing snowshoes decreases as more snowshoes are produced.

Question 18

A medical clinic employs 10 workers.Each worker can produce a maximum of either 2 units of medical services or 5 units of administrative services a day.One day,the clinic decides to produce 16 units of medical services and 5 units of administrative services.This output level is

Accepted Answer

A) efficient. 
B) unattainable. 
C) inefficient. 
D) on the clinic's PPF. 
E) attainable and efficient. 
A) efficient. 
B) unattainable. 
C) inefficient. 
D) on the clinic's PPF. 
E) attainable and efficient.

Question 19

The marginal benefit curve from a good

Accepted Answer

A) shows the benefit a firm receives from producing one more unit of that good. 
B) shows the most a consumer is willing to pay for one more unit of that good. 
C) is upward-sloping. 
D) is bowed outward. 
E) is vertical. 
A) shows the benefit a firm receives from producing one more unit of that good. 
B) shows the most a consumer is willing to pay for one more unit of that good. 
C) is upward-sloping. 
D) is bowed outward. 
E) is vertical.

Question 20

Which one of the following concepts is not illustrated by a production possibilities frontier?

Accepted Answer

A) scarcity 
B) marginal benefit 
C) opportunity cost 
D) attainable and unattainable points 
E) the tradeoff between producing one good versus another 
A) scarcity 
B) marginal benefit 
C) opportunity cost 
D) attainable and unattainable points 
E) the tradeoff between producing one good versus another

In general,if country A is accumulating capital at a faster rate than country B,then country A

Use the figure below to answer the following questions. Figure 2.1.2 -Refer to the production possibilities frontier in Figure 2.1.2.At point C,what is the opportunity cost of increasing the production of Y from 20 to 50 units?

Tom and Don have different opportunity costs of producing two goods.If Tom and Don specialize in producing the goods in which each has a comparative advantage and they exchange goods,then

A property right is

The development of new goods and better ways of producing goods and services is

Microsoft's marginal cost of the 100th copy of Microsoft Windows 10 is

A movement along the production possibilities frontier results from

Consider a PPF that measures the production of quilts on the y-axis and the production of pillows on the x-axis.As the firm moves along this PPF,the production of

Use the table below to answer the following question. Table 2.1.4 Consider the following production possibilities for a student for the typical week: -Refer to Table 2.1.4.Complete the following sentence.The production possibilities frontier in the table shows

Use the figure below to answer the following questions. Figure 2.1.1 -Refer to the production possibilities frontier in Figure 2.1.1.Which one of the following statements is true about point A?

Economic growth overcome scarcity because .

Use the information below to answer the following questions. Fact 2.3.1 In an eight-hour day,Andy can produce either 24 loaves of bread or 8 kilograms of butter.In an eight-hour day,Rolfe can produce either 8 loaves of bread or 8 kilograms of butter. -From Fact 2.3.1,we know that

The principle of decreasing marginal benefit implies that the

Use the figure below to answer the following questions. Figure 2.1.6 -Figure 2.1.6 shows the production possibilities frontier for a firm that produces pet food.This PPF illustrate scarcity because .

Use the table below to answer the following questions. Table 2.1.2 Production Possibilities -Refer to Table 2.1.2.According to this production possibilities frontier,

A medical clinic employs 10 workers.Each worker can produce a maximum of either 2 units of medical services or 5 units of administrative services a day.One day,the clinic decides to produce 16 units of medical services and 5 units of administrative services.This output level is

The marginal benefit curve from a good

Which one of the following concepts is not illustrated by a production possibilities frontier?

What Is Economics

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Filters

Exam 2: The Economic Problem

In general,if country A is accumulating capital at a faster rate than country B,then country A

Use the figure below to answer the following questions. Figure 2.1.2 -Refer to the production possibilities frontier in Figure 2.1.2.At point C,what is the opportunity cost of increasing the production of Y from 20 to 50 units?

Tom and Don have different opportunity costs of producing two goods.If Tom and Don specialize in producing the goods in which each has a comparative advantage and they exchange goods,then

A property right is

The development of new goods and better ways of producing goods and services is

Microsoft's marginal cost of the 100th copy of Microsoft Windows 10 is

A movement along the production possibilities frontier results from

Consider a PPF that measures the production of quilts on the y-axis and the production of pillows on the x-axis.As the firm moves along this PPF,the production of

Use the table below to answer the following question. Table 2.1.4 Consider the following production possibilities for a student for the typical week: -Refer to Table 2.1.4.Complete the following sentence.The production possibilities frontier in the table shows

Use the figure below to answer the following questions. Figure 2.1.1 -Refer to the production possibilities frontier in Figure 2.1.1.Which one of the following statements is true about point A?

Economic growth ________ overcome scarcity because ________.

Use the information below to answer the following questions. Fact 2.3.1 In an eight-hour day,Andy can produce either 24 loaves of bread or 8 kilograms of butter.In an eight-hour day,Rolfe can produce either 8 loaves of bread or 8 kilograms of butter. -From Fact 2.3.1,we know that

The principle of decreasing marginal benefit implies that the

Use the figure below to answer the following questions. Figure 2.1.6 -Figure 2.1.6 shows the production possibilities frontier for a firm that produces pet food.This PPF ________ illustrate scarcity because ________.

Use the table below to answer the following questions. Table 2.1.2 Production Possibilities -Refer to Table 2.1.2.According to this production possibilities frontier,

A medical clinic employs 10 workers.Each worker can produce a maximum of either 2 units of medical services or 5 units of administrative services a day.One day,the clinic decides to produce 16 units of medical services and 5 units of administrative services.This output level is

The marginal benefit curve from a good

Which one of the following concepts is not illustrated by a production possibilities frontier?

What Is Economics

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Filters

Economic growth overcome scarcity because .

Use the figure below to answer the following questions. Figure 2.1.6 -Figure 2.1.6 shows the production possibilities frontier for a firm that produces pet food.This PPF illustrate scarcity because .