Question 1

-In the figure above, suppose that Mac and Izzie trade and reach point c. Then

Accepted Answer

A)  Mac produces outside his production possibilities frontier. 
B)  Izzie produces outside her production possibilities frontier. 
C)  Mac and Izzie both produce outside their production possibilities frontiers. 
D)  neither Mac nor Izzie produce outside their production possibilities frontiers. 
A)  Mac produces outside his production possibilities frontier. 
B)  Izzie produces outside her production possibilities frontier. 
C)  Mac and Izzie both produce outside their production possibilities frontiers. 
D)  neither Mac nor Izzie produce outside their production possibilities frontiers.

Question 2

-In the above figure, at point b what is the opportunity cost of producing 2 more audio tapes?

Accepted Answer

A)  1/2 video tape per audio tape 
B)  1 video tape per audio tape 
C)  6 video tapes per audio tape 
D)  There is no opportunity cost. 
A)  1/2 video tape per audio tape 
B)  1 video tape per audio tape 
C)  6 video tapes per audio tape 
D)  There is no opportunity cost.

Question 3

-In the figure above, point D is

Accepted Answer

A)  less production efficient than point C. 
B)  production efficient and point A is not production efficient. 
C)  not production efficient and point B is production efficient. 
D)  production efficient and point B is not production efficient. 
A)  less production efficient than point C. 
B)  production efficient and point A is not production efficient. 
C)  not production efficient and point B is production efficient. 
D)  production efficient and point B is not production efficient.

Question 4

-The above table shows production points on Sweet-Tooth Land's production possibilities frontier. A movement from ________ represents the greatest opportunity cost of increasing cola production.

Accepted Answer

A)  point E to point D 
B)  point D to point C 
C)  point C to point B 
D)  point B to point A 
A)  point E to point D 
B)  point D to point C 
C)  point C to point B 
D)  point B to point A

Question 5

-The existence of the tradeoff along the PPF means that the PPF is

Accepted Answer

A)  bowed outward. 
B)  linear. 
C)  negatively sloped. 
D)  positively sloped 
A)  bowed outward. 
B)  linear. 
C)  negatively sloped. 
D)  positively sloped

Question 6

-In the above table, the production of 3 pizzas and 35 cases of soda is

Accepted Answer

A)  impossible unless more resources become available. 
B)  feasible but would involve unemployed or misallocated resources. 
C)  possible only if the economy produces with maximum efficiency. 
D)  possible only if there is inflation. 
A)  impossible unless more resources become available. 
B)  feasible but would involve unemployed or misallocated resources. 
C)  possible only if the economy produces with maximum efficiency. 
D)  possible only if there is inflation.

Question 7

A reduction in the amount of unemployment

Accepted Answer

A)  shifts the production possibilities frontier outward. 
B)  moves the economy's point of production closer to the production possibilities frontier. 
C)  moves the economy's point of production along the production possibilities frontier. 
D)  moves the economy's point of production further away from the production possibilities frontier. 
A)  shifts the production possibilities frontier outward. 
B)  moves the economy's point of production closer to the production possibilities frontier. 
C)  moves the economy's point of production along the production possibilities frontier. 
D)  moves the economy's point of production further away from the production possibilities frontier.

Question 8

When resources are assigned to inappropriate tasks, that is, tasks for which they are not the best match, the result will be producing at a point

Accepted Answer

A)  where the slope of the PPF is positive. 
B)  where the slope of the PPF is zero. 
C)  inside the PPF. 
D)  outside the PPF. 
A)  where the slope of the PPF is positive. 
B)  where the slope of the PPF is zero. 
C)  inside the PPF. 
D)  outside the PPF.

Question 9

In March a factory used new technology to produce its output. Then in August a fire destroys half the factory. The new technology shifted the factory's PPF ________ and the fire shifted it ________.

Accepted Answer

A)  inward; outward 
B)  outward; inward 
C)  outward; outward 
D)  inward; inward 
A)  inward; outward 
B)  outward; inward 
C)  outward; outward 
D)  inward; inward

Question 10

The social arrangement that gives John Grisham, the writer of best-selling novels, the ownership of his novels is

Accepted Answer

A)  a market. 
B)  property rights. 
C)  absolute advantage. 
D)  dynamic comparative advantage. 
A)  a market. 
B)  property rights. 
C)  absolute advantage. 
D)  dynamic comparative advantage.

Question 11

Individual economic decisions are coordinated by

Accepted Answer

A)  markets through adjustments in sales levels. 
B)  markets through adjustments in prices. 
C)  government through adjustments in sales taxes. 
D)  government through adjustments in income taxes. 
A)  markets through adjustments in sales levels. 
B)  markets through adjustments in prices. 
C)  government through adjustments in sales taxes. 
D)  government through adjustments in income taxes.

Question 12

Marginal benefit is the

Accepted Answer

A)  benefit that a person receives from consuming one more unit of a good or service. 
B)  amount of one good or service that a person gains when another good or service is consumed. 
C)  minimum amount a person is willing to pay for one more unit of a good or service. 
D)  dollars sacrificed to purchase a good or service. 
A)  benefit that a person receives from consuming one more unit of a good or service. 
B)  amount of one good or service that a person gains when another good or service is consumed. 
C)  minimum amount a person is willing to pay for one more unit of a good or service. 
D)  dollars sacrificed to purchase a good or service.

Question 13

Tom takes 20 minutes to cook an egg and 5 minutes to make a sandwich. Jerry takes 15 minutes to cook an egg and 3 minutes to make a sandwich. Both individuals will be better off if

Accepted Answer

A)  Tom trades sandwiches in exchange for eggs. 
B)  Jerry trades sandwiches in exchange for eggs. 
C)  they trade, no matter who trades sandwiches and who eggs. 
D)  they don't trade. 
A)  Tom trades sandwiches in exchange for eggs. 
B)  Jerry trades sandwiches in exchange for eggs. 
C)  they trade, no matter who trades sandwiches and who eggs. 
D)  they don't trade.

Question 14

-The table above shows the marginal benefit from pizza and the marginal cost of pizza in cans of soda forgone. The allocatively efficient quantity of pizza is ________ pizzas per day.

Accepted Answer

A)  70 
B)  10 
C)  more than 70 
D)  40 
A)  70 
B)  10 
C)  more than 70 
D)  40

Question 15

After Hurricane Katrina devastated parts of Mississippi and New Orleans in 2005, we can be sure that the production possibilities frontier for that area temporarily

Accepted Answer

A)  shifted inward, toward the origin. 
B)  shifted outward, away from the origin. 
C)  became flatter. 
D)  became steeper. 
A)  shifted inward, toward the origin. 
B)  shifted outward, away from the origin. 
C)  became flatter. 
D)  became steeper.

Question 16

-According to the diagram in the figure above, what is the marginal cost of producing the 3 millionth gallon of gasoline per month?

Accepted Answer

A)  5 pounds of shrimp per gallon of gasoline 
B)  4 pounds of shrimp per gallon of gasoline 
C)  3 pounds of shrimp per gallon of gasoline 
D)  1 pound of shrimp per gallon of gasoline 
A)  5 pounds of shrimp per gallon of gasoline 
B)  4 pounds of shrimp per gallon of gasoline 
C)  3 pounds of shrimp per gallon of gasoline 
D)  1 pound of shrimp per gallon of gasoline

Question 17

-Refer to the table above, which gives five points on a nation's PPF. The opportunity cost of increasing the production of Y from 16 to 36 units is a total of

Accepted Answer

A)  1/5 unit of X per unit of Y. 
B)  2/5 unit of X per unit of Y. 
C)  1/2 unit of X per unit of Y. 
D)  3/5 unit of X per unit of Y. 
A)  1/5 unit of X per unit of Y. 
B)  2/5 unit of X per unit of Y. 
C)  1/2 unit of X per unit of Y. 
D)  3/5 unit of X per unit of Y.

Question 18

-Jane produces only corn, measured in tons, and cloth, measured in bolts. For her, the opportunity cost of one more ton of corn is

Accepted Answer

A)  the same as the opportunity cost of one more bolt of cloth. 
B)  the inverse of the opportunity cost of one more bolt of cloth. 
C)  the ratio of all the bolts of cloth she produces to all the tons of corn she produces. 
D)  the ratio of all the tons of corn she produces to all the bolts of cloth she produces. 
A)  the same as the opportunity cost of one more bolt of cloth. 
B)  the inverse of the opportunity cost of one more bolt of cloth. 
C)  the ratio of all the bolts of cloth she produces to all the tons of corn she produces. 
D)  the ratio of all the tons of corn she produces to all the bolts of cloth she produces.

Question 19

The production possibilities frontier bows outward because

Accepted Answer

A)  opportunity costs are decreasing as the production of a good increases. 
B)  opportunity costs are increasing as the production of a good increases. 
C)  opportunity costs are fixed as the production of a good increases. 
D)  resources are of uniform quality. 
A)  opportunity costs are decreasing as the production of a good increases. 
B)  opportunity costs are increasing as the production of a good increases. 
C)  opportunity costs are fixed as the production of a good increases. 
D)  resources are of uniform quality.

Question 20

-In the figure above, at the allocatively efficient level of computer production the marginal cost of producing a computer is

Accepted Answer

A)  0 televisions per computer. 
B)  between 0 and 3 televisions per computer. 
C)  3 televisions per computer. 
D)  more than 3 televisions per computer. 
A)  0 televisions per computer. 
B)  between 0 and 3 televisions per computer. 
C)  3 televisions per computer. 
D)  more than 3 televisions per computer.

Exam 2: The Economic Problem

-In the figure above, suppose that Mac and Izzie trade and reach point c. Then

-In the above figure, at point b what is the opportunity cost of producing 2 more audio tapes?

-In the figure above, point D is

-The above table shows production points on Sweet-Tooth Land's production possibilities frontier. A movement from ________ represents the greatest opportunity cost of increasing cola production.

-The existence of the tradeoff along the PPF means that the PPF is

-In the above table, the production of 3 pizzas and 35 cases of soda is

A reduction in the amount of unemployment

When resources are assigned to inappropriate tasks, that is, tasks for which they are not the best match, the result will be producing at a point

In March a factory used new technology to produce its output. Then in August a fire destroys half the factory. The new technology shifted the factory's PPF ________ and the fire shifted it ________.

The social arrangement that gives John Grisham, the writer of best-selling novels, the ownership of his novels is

Individual economic decisions are coordinated by

Marginal benefit is the

Tom takes 20 minutes to cook an egg and 5 minutes to make a sandwich. Jerry takes 15 minutes to cook an egg and 3 minutes to make a sandwich. Both individuals will be better off if

-The table above shows the marginal benefit from pizza and the marginal cost of pizza in cans of soda forgone. The allocatively efficient quantity of pizza is ________ pizzas per day.

After Hurricane Katrina devastated parts of Mississippi and New Orleans in 2005, we can be sure that the production possibilities frontier for that area temporarily

-According to the diagram in the figure above, what is the marginal cost of producing the 3 millionth gallon of gasoline per month?

-Refer to the table above, which gives five points on a nation's PPF. The opportunity cost of increasing the production of Y from 16 to 36 units is a total of

-Jane produces only corn, measured in tons, and cloth, measured in bolts. For her, the opportunity cost of one more ton of corn is

The production possibilities frontier bows outward because

-In the figure above, at the allocatively efficient level of computer production the marginal cost of producing a computer is

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 March a factory used new technology to produce its output. Then in August a fire destroys half the factory. The new technology shifted the factory's PPF and the fire shifted it .