Question 1

Production possibilities curves can shift outward but they do not shift inward.

Accepted Answer

A) True 
 B)False

Question 2

Which scenario below most accurately describes the process by which a technological change can affect employment patterns across industries?

Accepted Answer

A)  A technological advance makes it possible to produce more of good X with less labor. As a result, labor is released from producing good X. Some of this labor ends up producing goods Y and Z. 
B)  A technological advance makes it possible to produce less of good X with less labor. As a result, labor is released from producing good X. Some of this labor ends up producing good Y. 
C)  A technological advance makes it possible to produce more of good X with more labor. As a result, more labor is needed to produce good X. There is less labor available to produce goods Y and Z. 
D)  A technological advance makes it possible to produce more of good X with less labor. As a result, labor becomes more important to the production of good X. More labor ends up producing good X. 
E)  none of the above 
A)  A technological advance makes it possible to produce more of good X with less labor. As a result, labor is released from producing good X. Some of this labor ends up producing goods Y and Z. 
B)  A technological advance makes it possible to produce less of good X with less labor. As a result, labor is released from producing good X. Some of this labor ends up producing good Y. 
C)  A technological advance makes it possible to produce more of good X with more labor. As a result, more labor is needed to produce good X. There is less labor available to produce goods Y and Z. 
D)  A technological advance makes it possible to produce more of good X with less labor. As a result, labor becomes more important to the production of good X. More labor ends up producing good X. 
E)  none of the above

Question 3

Exhibit 2-6
  
-Refer to Exhibit 2-6.Which graph depicts society's choice to produce more of good X and less of good Y?

Accepted Answer

A)  (1) 
B)  (2) 
C)  (3) 
D)  (4) 
E)  none of the above 
A)  (1) 
B)  (2) 
C)  (3) 
D)  (4) 
E)  none of the above

Question 4

What is the reason for the law of increasing opportunity costs?

Accepted Answer

A)  There is no reason: it is just one of the laws of economics. 
B)  Resources have varying abilities and those with lower opportunity costs of producing a good will be used to produce it before resources with higher opportunity costs produce it. 
C)  The price of a good rises as more of it is demanded. 
D)  As more of a good is produced, the taxes applied to the production of the good rise. 
E)  c and d 
A)  There is no reason: it is just one of the laws of economics. 
B)  Resources have varying abilities and those with lower opportunity costs of producing a good will be used to produce it before resources with higher opportunity costs produce it. 
C)  The price of a good rises as more of it is demanded. 
D)  As more of a good is produced, the taxes applied to the production of the good rise. 
E)  c and d

Question 5

If Sean can bake bread at a lower opportunity cost than Jason,and Jason can produce paintings at a lower opportunity cost than Sean,it follows that

Accepted Answer

A)  Sean has a comparative advantage in paintings and Jason has a comparative advantage in baking bread. 
B)  Both Sean and Jason have a comparative advantage in baking bread. 
C)  Both Sean and Jason have a comparative disadvantage in producing paintings. 
D)  Sean has a comparative advantage in baking bread and Jason has a comparative advantage in producing paintings. 
E)  There is not enough information to answer the question. 
A)  Sean has a comparative advantage in paintings and Jason has a comparative advantage in baking bread. 
B)  Both Sean and Jason have a comparative advantage in baking bread. 
C)  Both Sean and Jason have a comparative disadvantage in producing paintings. 
D)  Sean has a comparative advantage in baking bread and Jason has a comparative advantage in producing paintings. 
E)  There is not enough information to answer the question.

Question 6

If there is always a three-for-one tradeoff between goods X and Y,then the PPF between X and Y is

Accepted Answer

A)  a downward-sloping curve that is bowed outward. 
B)  a downward-sloping curve that is bowed inward. 
C)  a downward-sloping straight line. 
D)  an upward-sloping straight line. 
A)  a downward-sloping curve that is bowed outward. 
B)  a downward-sloping curve that is bowed inward. 
C)  a downward-sloping straight line. 
D)  an upward-sloping straight line.

Question 7

Exhibit 2-6
  
-Refer to Exhibit 2-6.Which graph depicts a technological breakthrough in the production of good Y only?

Accepted Answer

A)  (1) 
B)  (2) 
C)  (3) 
D)  (4) 
E)  none of the above 
A)  (1) 
B)  (2) 
C)  (3) 
D)  (4) 
E)  none of the above

Question 8

Suppose Andrea is taking just two courses and is at a point on her PPF of grades for those two courses. Now this PPF shifts inward and Andrea moves to a point on the new PPF. Then it is impossible for

Accepted Answer

A)  both of her grades to fall. 
B)  both of her grades to rise. 
C)  one of her grades to rise and the other grade to fall. 
D)  one of her grades to fall while the other grade stays constant. 
A)  both of her grades to fall. 
B)  both of her grades to rise. 
C)  one of her grades to rise and the other grade to fall. 
D)  one of her grades to fall while the other grade stays constant.

Question 9

Exhibit 2-8
  
-Refer to Exhibit 2-8.For Maria,the opportunity cost of producing one unit of good X is ___________ unit(s)of good Y.

Accepted Answer

A)  2.00 
B)  1.00 
C)  10.00 
D)  0.50 
A)  2.00 
B)  1.00 
C)  10.00 
D)  0.50

Question 10

Exhibit 2-3
  
-Refer to Exhibit 2-3.If PPF? is the relevant production possibilities frontier,society may move to PPF? as a result of

Accepted Answer

A)  an increase in resources. 
B)  a decrease in resources. 
C)  an increase in technology. 
D)  both a and c 
E)  both b and c 
A)  an increase in resources. 
B)  a decrease in resources. 
C)  an increase in technology. 
D)  both a and c 
E)  both b and c

Question 11

A decrease in the quantity of resources available causes a movement down along a given PPF.

Accepted Answer

A) True 
 B)False

Question 12

If the economy is on the production possibilities frontier (PPF),the economy is

Accepted Answer

A)  productive inefficient. 
B)  operating with no unemployed resources. 
C)  productive efficient. 
D)  b and c 
E)  none of the above 
A)  productive inefficient. 
B)  operating with no unemployed resources. 
C)  productive efficient. 
D)  b and c 
E)  none of the above

Question 13

Country X has a high unemployment rate.It follows that country X is operating

Accepted Answer

A)  beyond its production possibilities frontier (PPF). 
B)  on its PPF. 
C)  inside (below) its PPF. 
D)  at a productive efficient point. 
E)  b and d 
A)  beyond its production possibilities frontier (PPF). 
B)  on its PPF. 
C)  inside (below) its PPF. 
D)  at a productive efficient point. 
E)  b and d

Question 14

Explain what productive efficiency means. Describe how productive efficiency is represented by a PPF.

Accepted Answer

An economy is producing efficiently if i

Question 15

Exhibit 2-4
  
-Refer to Exhibit 2-4.The opportunity cost of moving from point A to point B is

Accepted Answer

A)  60,000 copiers. 
B)  40,000 copiers. 
C)  20,000 copiers. 
D)  20,000 fax machines. 
E)  40,000 fax machines. 
A)  60,000 copiers. 
B)  40,000 copiers. 
C)  20,000 copiers. 
D)  20,000 fax machines. 
E)  40,000 fax machines.

Question 16

A person has a comparative advantage in the production of a good when they can produce the product at a(n)________ opportunity cost compared to another person.

Accepted Answer

A)  higher 
B)  increasing 
C)  lower 
D)  equal 
A)  higher 
B)  increasing 
C)  lower 
D)  equal

Question 17

Between 1910 and today,the number of farmers in the United States _____________ dramatically as a result of ___________________ in farming in the twentieth century.

Accepted Answer

A)  dropped; technological improvements 
B)  rose; technological improvements 
C)  dropped; technological declines 
D)  rose; technological declines 
A)  dropped; technological improvements 
B)  rose; technological improvements 
C)  dropped; technological declines 
D)  rose; technological declines

Question 18

Currently an economy is producing (at a point on its production possibilities frontier)100 units of good X and the opportunity cost of producing 1X is 3Y.If good X is produced at increasing opportunity costs,then when the economy produces 120 units of good X (on the same PPF)the opportunity cost of producing 1Y (not 1X)could be

Accepted Answer

A)  1/4X. 
B)  1/3X. 
C)  1/2X. 
D)  1X. 
E)  none of the above 
A)  1/4X. 
B)  1/3X. 
C)  1/2X. 
D)  1X. 
E)  none of the above

Question 19

Exhibit 2-6
  
-Refer to Exhibit 2-6. Which graph depicts the result of an increase in the number of illegal immigrants entering the country?

Accepted Answer

A)  (1) 
B)  (2) 
C)  (3) 
D)  (4) 
E)  none of the above 
A)  (1) 
B)  (2) 
C)  (3) 
D)  (4) 
E)  none of the above

Question 20

Keisha can produce the following combinations of X and Y: 100X and 20Y,50X and 30Y,or 0X and 40Y.The opportunity cost of one unit of Y for Keisha is

Accepted Answer

A)  5 units of X. 
B)  0.2 units of X. 
C)  3 units of X. 
D)  1/2 unit of X. 
E)  none of the above 
A)  5 units of X. 
B)  0.2 units of X. 
C)  3 units of X. 
D)  1/2 unit of X. 
E)  none of the above

Exam 2: Production Possibilities Frontier Framework

Production possibilities curves can shift outward but they do not shift inward.

Which scenario below most accurately describes the process by which a technological change can affect employment patterns across industries?

Exhibit 2-6 -Refer to Exhibit 2-6.Which graph depicts society's choice to produce more of good X and less of good Y?

What is the reason for the law of increasing opportunity costs?

If Sean can bake bread at a lower opportunity cost than Jason,and Jason can produce paintings at a lower opportunity cost than Sean,it follows that

If there is always a three-for-one tradeoff between goods X and Y,then the PPF between X and Y is

Exhibit 2-6 -Refer to Exhibit 2-6.Which graph depicts a technological breakthrough in the production of good Y only?

Suppose Andrea is taking just two courses and is at a point on her PPF of grades for those two courses. Now this PPF shifts inward and Andrea moves to a point on the new PPF. Then it is impossible for

Exhibit 2-8 -Refer to Exhibit 2-8.For Maria,the opportunity cost of producing one unit of good X is ___________ unit(s)of good Y.

Exhibit 2-3 -Refer to Exhibit 2-3.If PPF? is the relevant production possibilities frontier,society may move to PPF? as a result of

A decrease in the quantity of resources available causes a movement down along a given PPF.

If the economy is on the production possibilities frontier (PPF),the economy is

Country X has a high unemployment rate.It follows that country X is operating

Explain what productive efficiency means. Describe how productive efficiency is represented by a PPF.

Exhibit 2-4 -Refer to Exhibit 2-4.The opportunity cost of moving from point A to point B is

A person has a comparative advantage in the production of a good when they can produce the product at a(n)________ opportunity cost compared to another person.

Between 1910 and today,the number of farmers in the United States _____________ dramatically as a result of ___________________ in farming in the twentieth century.

Exhibit 2-6 -Refer to Exhibit 2-6. Which graph depicts the result of an increase in the number of illegal immigrants entering the country?

Keisha can produce the following combinations of X and Y: 100X and 20Y,50X and 30Y,or 0X and 40Y.The opportunity cost of one unit of Y for Keisha is

What Economics Is About

Supply and Demand: Theory

Prices: Free, Controlled, and Relative

Supply, Demand, and Price: Applications

Macroeconomic Measurements: Prices and Unemployment

Macroeconomic Measurements: GDP and Real GDP

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self Regulating Economy

Keynesian Macroeconomics and Economic Instability: A Critique of the Self-Regulating Economy

Fiscal Policy and the Federal Budget

Money, Banking,and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth: Resources, Technology, Ideas, and Institutions

The Financial Crisis of 2007-2009

Debates in Macroeconomics Over the Role and Effects of Government

Elasticity

Consumer Choice: Maximizing Utility and Behavioral Economics

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition, Oligopoly, and Game Theory

Government and Product Markets: Antitrust and Regulation

Factor Markets: With Emphasis on the Labor Market

Wages,Unions,and Labor

The Distribution of Income and Poverty

Interest, Rent, and Profit

Market Failure: Externalities, Public Goods, and Asymmetric Information

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

Globalization and International Impacts on the Economy

The Economic Case For and Against Government: Five Topics Considered

Stocks, Bonds, Futures, and Options

Agriculture: Problems, Policies, and Unintended Effects

Filters

Between 1910 and today,the number of farmers in the United States _ dramatically as a result of _______ in farming in the twentieth century.