Exam 2: The Economic Problem

-Jean can either type her term paper or create Web pages during the limited time she has available. The table above shows her PPF. a) Can Jean type 90 pages and create 2 Web pages? b) Use the above numbers to calculate the opportunity cost of a typed page as she increases her time typing and decreases time creating a Web page.

We have achieved production efficiency if we can produce more of one good without producing less of some other good.

-A PPF, such as the one above, that bows outward illustrates

-The above table shows production points on Sweet-Tooth Land's production possibilities frontier. What is the opportunity cost of one can of cola if Sweet-tooth Land moves from point C to point B?

-In the figure above, the allocatively efficient output of computers is

Opportunity cost is best defined as

Suppose Joe can prepare 20 sandwiches or 10 pizzas in an hour and Beth can produce 36 sandwiches or 27 pizzas. The concept of comparative advantage concludes that

Households are buyers in factor markets and sellers in goods markets.

-In the above figure, if 2 million computers are produced per year then the ________ should be produced to achieve the allocatively efficient use of resources

One of the largest categories of exports from the United States is now pop culture: movies, music, TV programming, and videos. A direct conclusion from this information is that, compared to other countries, the United States has

-Before the first Gulf War in 1991, Kuwait had the capacity to produce a certain amount of oil from its oil wells. After the war, it found that capacity greatly diminished because the oil wells had been set on fire. Draw Kuwait's PPF before and after the war, assuming that the only two goods produced are oil and food. Further assume that setting the oil wells on fire did not affect Kuwait's ability to produce food. Explain why the PPF before the war is different from the PPF after the war.

Susan likes to drink sodas. The ________ soda Susan drinks, the ________ of the last soda.

-The above table shows production combinations on a country's production possibilities frontier. The opportunity cost of increasing the production of Y from 16 to 28 units is ________ units of good X per unit of good Y.

"If Mexico is currently operating at a point beyond its production possibilities frontier, then there are unemployed resources in Mexico." Is this statement true or false? Briefly explain your answer.

Country A Country B -Both Mergatroid and the Geebocks produce only gizmos and widgets. It is possible for Mergatroid to have

-Production efficiency means that

-The above table shows production combinations on a country's production possibilities frontier. Which of the following is an example of a point that is unattainable?

The more we have of a good or service, the smaller is its marginal benefit and the less we are willing to pay for an additional unit of it.

Betty and Ann live on a desert island. With a day's labor, Ann can produce 6 fish or 4 coconuts; Betty can produce 3 fish or 1 coconut. Betty's opportunity cost of producing 1 fish is ________, and she should specialize in the production of ________.

A point outside a production possibilities frontier indicates