Exam 2: The Economic Problem

The kitchen manager at an Italian restaurant is deciding what assignments he should give to his two cooks, John and David. John can make 25 pizzas or 40 servings of pasta per hour and David can make 20 pizzas or 30 servings of pasta. Which of the following should be the manager's choice?

Generally, opportunity costs increase and the production possibilities frontier bows outward. Why?

-In the production possibilities frontier depicted in the figure above, which of the following combinations of hats and bananas is unattainable?

A country that must decrease production of one good in order to increase the production of another

-In the figure above, moving from point B to point D

What factors generate economic growth?

China's State Council has encouraged more spending to "improve transportation links and other infrastructure...." It will also "step up its spending on vocational training and other educational programs for adults." www.nytimes.com, Keith Bradsher, October 19, 2008 Suppose that capital goods are on the vertical axis while consumption goods are on the horizontal axis of China's PPF. As a result of enacting the policies, China's PPF will

-In the above figure, which point represents an unattainable production combination of the two goods?

A person has a comparative advantage in an activity whenever he or she

Blue Violet's Sweet Pansy's production possibilities production possibilities -Two countries, Blue Violet and Sweet Pansy, produce only two goods: teapots and coffeepots. The table above gives their production possibilities.

-In the figure above, what can be said about point B?

Any point on a production possibilities frontier (PPF) itself is

-In the table above, the marginal benefit of the 4 millionth television set is

-Refer to the production possibilities frontier in the figure above. Which of the following movements requires the largest opportunity cost, in terms of good Y forgone, per extra unit of good X?

-Refer to the table above, which gives five points on a nation's PPF. The production of 7 units of X and 28 units of Y is

Which of the following statements can used to describe efficiency? I. Efficiently using resources means that producers make the highest profits possible. II) Using resources efficiently means that we cannot produce more of one good without producing less of another good that has a higher value. III) Resource use is efficient when we produce goods and services that people value most highly.

-Point C on the production possibilities frontier in the above diagram illustrates

-The above table shows production combinations on a country's production possibilities frontier. What is the opportunity cost of increasing the production of X from 0 to 3 units?

-The table above shows the marginal benefit from pizza and the marginal cost of pizza in cans of soda forgone. If ________ pizzas are produced, the quantity of soda that people are willing to give up to get an additional pizza is more than the quantity of soda that they must give up to get that additional pizza.

Economic growth comes from ________.