Question 1

A marginal benefit curve shows

Accepted Answer

A)  the efficient use of resources. 
B)  the quantity of one good that must be forgone to get more of another good. 
C)  the quantity of one good that people are willing to forgo to get another unit of another good. 
D)  there are increasing opportunity costs. 
A)  the efficient use of resources. 
B)  the quantity of one good that must be forgone to get more of another good. 
C)  the quantity of one good that people are willing to forgo to get another unit of another good. 
D)  there are increasing opportunity costs.

Question 2

Using a production possibilities frontier, economic growth is illustrated by a

Accepted Answer

A)  point inside the curve. 
B)  point on the curve. 
C)  movement from one point on the curve to another point on the curve. 
D)  rightward shift of the curve. 
A)  point inside the curve. 
B)  point on the curve. 
C)  movement from one point on the curve to another point on the curve. 
D)  rightward shift of the curve.

Question 3

Country A Country B  
-In the table above, country B is producing 4 units of X and 6 units of Y. For country B, the opportunity cost of producing an additional unit of X is

Accepted Answer

A)  4 units of Y per unit of X. 
B)  2 units of Y per unit of X. 
C)  3/2 units of Y per unit of X. 
D)  1 unit of Y per unit of X. 
A)  4 units of Y per unit of X. 
B)  2 units of Y per unit of X. 
C)  3/2 units of Y per unit of X. 
D)  1 unit of Y per unit of X.

Question 4

A country that has a comparative advantage in producing capital goods will ________ a country that has a comparative advantage in consumption goods.

Accepted Answer

A)  reap all of the gains from trade when it trades with 
B)  grow slower than 
C)  reap fewer of the gains from trade when it trades with 
D)  specialize in producing capital goods and trade with 
A)  reap all of the gains from trade when it trades with 
B)  grow slower than 
C)  reap fewer of the gains from trade when it trades with 
D)  specialize in producing capital goods and trade with

Question 5

-The above figure illustrates Mary's production possibilities frontier. Which of the following movements show opportunity costs increasing?

Accepted Answer

A)  point a to point b to point c 
B)  point a to point f 
C)  point f to point a 
D)  point c to point f to point d 
A)  point a to point b to point c 
B)  point a to point f 
C)  point f to point a 
D)  point c to point f to point d

Question 6

If the marginal benefit from another computer exceeds the marginal cost of the computer, then to use resources allocatively efficiently,

Accepted Answer

A)  more resources should be used to produce computers. 
B)  fewer resources should be used to produce computers. 
C)  if the marginal benefit exceeds the marginal cost by as much as possible, the efficient amount of resources are being used to produce computers. 
D)  None of the above is correct because marginal benefit and marginal cost have nothing to do with using resources allocatively efficiently. 
A)  more resources should be used to produce computers. 
B)  fewer resources should be used to produce computers. 
C)  if the marginal benefit exceeds the marginal cost by as much as possible, the efficient amount of resources are being used to produce computers. 
D)  None of the above is correct because marginal benefit and marginal cost have nothing to do with using resources allocatively efficiently.

Question 7

-Which graph shows the impact of scientists developing a more powerful fertilizer?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D

Question 8

In a world lacking property rights, it would be ________ to realize the gains from trade and there would be ________ specialization.

Accepted Answer

A)  easier; less 
B)  easier; more 
C)  harder; less 
D)  harder; more 
A)  easier; less 
B)  easier; more 
C)  harder; less 
D)  harder; more

Question 9

According to the principle of comparative advantage, if a rich country trades with a poor country, then

Accepted Answer

A)  the rich country will benefit and the poor country will lose. 
B)  the rich country will lose and the poor country will benefit. 
C)  both countries will benefit. 
D)  neither of the countries will benefit. 
A)  the rich country will benefit and the poor country will lose. 
B)  the rich country will lose and the poor country will benefit. 
C)  both countries will benefit. 
D)  neither of the countries will benefit.

Question 10

Resource use is allocatively efficient when marginal benefit is

Accepted Answer

A)  greater than marginal cost. 
B)  equal to marginal cost. 
C)  less than marginal cost. 
D)  at its maximum value. 
A)  greater than marginal cost. 
B)  equal to marginal cost. 
C)  less than marginal cost. 
D)  at its maximum value.

Question 11

Because of the existence of comparative advantage, the total output of goods is higher when each producer

Accepted Answer

A)  produces many different goods. 
B)  produces at the midpoint of its PPF. 
C)  specializes in the production of one good or a few goods. 
D)  makes both intermediate and final goods. 
A)  produces many different goods. 
B)  produces at the midpoint of its PPF. 
C)  specializes in the production of one good or a few goods. 
D)  makes both intermediate and final goods.

Question 12

Suppose that a typical German factory can produce 20 cameras or 1 computer in an hour, and that a typical American factory can produce 10 cameras or one computer in an hour. The opportunity cost of 20 cameras in terms of computers in the United States is

Accepted Answer

A)  10 computers per camera. 
B)  2 computers per camera. 
C)  1 computer per camera. 
D)  1/20 of a computer per camera. 
A)  10 computers per camera. 
B)  2 computers per camera. 
C)  1 computer per camera. 
D)  1/20 of a computer per camera.

Question 13

The opportunity cost of more capital goods today is

Accepted Answer

A)  fewer capital goods in the future. 
B)  fewer consumer goods in the future. 
C)  fewer consumer goods today. 
D)  more unemployed resources in the future. 
A)  fewer capital goods in the future. 
B)  fewer consumer goods in the future. 
C)  fewer consumer goods today. 
D)  more unemployed resources in the future.

Question 14

-The figure above shows Roger's production possibilities frontier. Point a is an ________ point and at that point production is ________.

Accepted Answer

A)  attainable; efficient 
B)  attainable; inefficient 
C)  unattainable; inefficient 
D)  unattainable; efficient 
A)  attainable; efficient 
B)  attainable; inefficient 
C)  unattainable; inefficient 
D)  unattainable; efficient

Question 15

-The table above shows the amounts of cloth and cheese that China and Pakistan can produce in an hour. Which country has the comparative advantage in cloth and which country has the comparative advantage in cheese?

Accepted Answer

In China, to produce 8 cloths has an opp

Question 16

A country produces only pencils and erasers. Pencil production is allocatively efficient if the marginal ________ of a pencil equals the marginal ________ of ________.

Accepted Answer

A)  cost; benefit; an eraser 
B)  cost; cost; an eraser 
C)  benefit; benefit; an eraser 
D)  benefit; cost; a pencil 
A)  cost; benefit; an eraser 
B)  cost; cost; an eraser 
C)  benefit; benefit; an eraser 
D)  benefit; cost; a pencil

Question 17

-In 2006, Country X and Country Y had the same production possibilities, illustrated in the figure above. Country X chose to produce at point A, while country Y chose to produce at point B. In 2012, most likely, Country X will be at point such as ________ while Country Y will be at point such as ________.

Accepted Answer

A)  A; B 
B)  B; A 
C)  N; Q 
D)  Q; N 
A)  A; B 
B)  B; A 
C)  N; Q 
D)  Q; N

Question 18

-Resource use is allocatively efficient when

Accepted Answer

A)  we produce the goods with the highest opportunity cost. 
B)  we produce the goods with the lowest opportunity cost. 
C)  we cannot produce more goods and services. 
D)  we produce the amount of the different goods we value most highly. 
A)  we produce the goods with the highest opportunity cost. 
B)  we produce the goods with the lowest opportunity cost. 
C)  we cannot produce more goods and services. 
D)  we produce the amount of the different goods we value most highly.

Question 19

In one day, Sue can change the oil on 20 cars or change the tires on 20 cars. In one day, Fred can change the oil on 20 cars or change the tires on 10 cars. Sue's opportunity cost of changing oil is ________ than Fred's and her opportunity cost for changing tires is ________ than Fred's.

Accepted Answer

A)  greater; less 
B)  less; greater 
C)  less; less 
D)  greater; greater 
A)  greater; less 
B)  less; greater 
C)  less; less 
D)  greater; greater

Question 20

When an economy produces at its allocatively efficient production point,

Accepted Answer

A)  scarcity is not a problem. 
B)  resources are not limited. 
C)  a society can increase the production of all goods. 
D)  a society can increase the production of one good only by decreasing the production of some other good that is valued more highly. 
A)  scarcity is not a problem. 
B)  resources are not limited. 
C)  a society can increase the production of all goods. 
D)  a society can increase the production of one good only by decreasing the production of some other good that is valued more highly.

Exam 2: The Economic Problem

A marginal benefit curve shows

Using a production possibilities frontier, economic growth is illustrated by a

Country A Country B -In the table above, country B is producing 4 units of X and 6 units of Y. For country B, the opportunity cost of producing an additional unit of X is

A country that has a comparative advantage in producing capital goods will ________ a country that has a comparative advantage in consumption goods.

-The above figure illustrates Mary's production possibilities frontier. Which of the following movements show opportunity costs increasing?

If the marginal benefit from another computer exceeds the marginal cost of the computer, then to use resources allocatively efficiently,

-Which graph shows the impact of scientists developing a more powerful fertilizer?

In a world lacking property rights, it would be ________ to realize the gains from trade and there would be ________ specialization.

According to the principle of comparative advantage, if a rich country trades with a poor country, then

Resource use is allocatively efficient when marginal benefit is

Because of the existence of comparative advantage, the total output of goods is higher when each producer

Suppose that a typical German factory can produce 20 cameras or 1 computer in an hour, and that a typical American factory can produce 10 cameras or one computer in an hour. The opportunity cost of 20 cameras in terms of computers in the United States is

The opportunity cost of more capital goods today is

-The figure above shows Roger's production possibilities frontier. Point a is an ________ point and at that point production is ________.

-The table above shows the amounts of cloth and cheese that China and Pakistan can produce in an hour. Which country has the comparative advantage in cloth and which country has the comparative advantage in cheese?

A country produces only pencils and erasers. Pencil production is allocatively efficient if the marginal ________ of a pencil equals the marginal ________ of ________.

-Resource use is allocatively efficient when

In one day, Sue can change the oil on 20 cars or change the tires on 20 cars. In one day, Fred can change the oil on 20 cars or change the tires on 10 cars. Sue's opportunity cost of changing oil is ________ than Fred's and her opportunity cost for changing tires is ________ than Fred's.

When an economy produces at its allocatively efficient production point,

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

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices and Public Goods

Externalities and the Environment

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Extension A: Review

Extension B: Review

Extension C: Review

Extension D: Review

Extension E: Review

Extension F: Review

Filters

In a world lacking property rights, it would be to realize the gains from trade and there would be specialization.

-The figure above shows Roger's production possibilities frontier. Point a is an point and at that point production is .

A country produces only pencils and erasers. Pencil production is allocatively efficient if the marginal of a pencil equals the marginal of .

In one day, Sue can change the oil on 20 cars or change the tires on 20 cars. In one day, Fred can change the oil on 20 cars or change the tires on 10 cars. Sue's opportunity cost of changing oil is than Fred's and her opportunity cost for changing tires is than Fred's.