Question 1

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

Which of the following statements is true?

Accepted Answer

A)  The concept of opportunity costs cannot be illustrated within a PPF framework. 
B)  If scarcity did not exist, neither would a PPF. 
C)  All PPFs are downward-sloping straight lines. 
D)  There are more attainable points than unattainable points in every PPF diagram. 
A)  The concept of opportunity costs cannot be illustrated within a PPF framework. 
B)  If scarcity did not exist, neither would a PPF. 
C)  All PPFs are downward-sloping straight lines. 
D)  There are more attainable points than unattainable points in every PPF diagram.

Question 3

Exhibit 2-5
  
-Refer to Exhibit 2-5.The opportunity cost of moving from point C to point B is

Accepted Answer

A)  15,000 televisions. 
B)  15,000 fax machines. 
C)  10,000 televisions. 
D)  20,000 fax machines. 
A)  15,000 televisions. 
B)  15,000 fax machines. 
C)  10,000 televisions. 
D)  20,000 fax machines.

Question 4

The point where the PPF intersects the vertical axis is

Accepted Answer

A)  unattainable. 
B)  attainable and productive efficient. 
C)  attainable but productive inefficient. 
D)  attainable and neither productive efficient nor productive inefficient. 
A)  unattainable. 
B)  attainable and productive efficient. 
C)  attainable but productive inefficient. 
D)  attainable and neither productive efficient nor productive inefficient.

Question 5

Exhibit 2-2
  
-Refer to Exhibit 2-2.If PPF? is the relevant production possibilities frontier,then point __________ is productive efficient.

Accepted Answer

A)  B 
B)  D 
C)  I 
D)  F 
E)  both b and d 
A)  B 
B)  D 
C)  I 
D)  F 
E)  both b and d

Question 6

Exhibit 2-9
  
-Refer to Exhibit 2-9.For Alex,the opportunity cost of producing one unit of good A is ____________ unit(s)of good B.

Accepted Answer

A)  3.00 
B)  0.33 
C)  0.75 
D)  1.33 
A)  3.00 
B)  0.33 
C)  0.75 
D)  1.33

Question 7

The PPF between goods X and Y will be a downward-sloping

Accepted Answer

A)  straight line if increasing opportunity costs exist. 
B)  straight line if decreasing opportunity costs exist. 
C)  curve that is bowed outward if increasing opportunity costs exist. 
D)  curve that is bowed outward if constant opportunity costs exist. 
A)  straight line if increasing opportunity costs exist. 
B)  straight line if decreasing opportunity costs exist. 
C)  curve that is bowed outward if increasing opportunity costs exist. 
D)  curve that is bowed outward if constant opportunity costs exist.

Question 8

The PPF between goods X and Y will be a downward-sloping

Accepted Answer

A)  straight line if increasing opportunity costs exist. 
B)  straight line if decreasing opportunity costs exist. 
C)  curve that is bowed inward if increasing opportunity costs exist. 
D)  straight line if constant opportunity costs exist. 
A)  straight line if increasing opportunity costs exist. 
B)  straight line if decreasing opportunity costs exist. 
C)  curve that is bowed inward if increasing opportunity costs exist. 
D)  straight line if constant opportunity costs exist.

Question 9

A PPF can

Accepted Answer

A)  shift outward but not inward. 
B)  shift inward but not outward. 
C)  shift inward or outward. 
D)  shift neither inward nor outward. 
A)  shift outward but not inward. 
B)  shift inward but not outward. 
C)  shift inward or outward. 
D)  shift neither inward nor outward.

Question 10

If the law of increasing opportunity costs is operable,and currently the opportunity cost of producing the 1,000th unit of good X is 0.5Y,then the opportunity cost of producing the 2,001st unit of good is X is most likely to be

Accepted Answer

A)  less than 0.5Y. 
B)  more than 0.5Y but less than 2Y. 
C)  more than 0.5Y 
D)  less than 0.5Y but more than zero. 
E)  none of the above 
A)  less than 0.5Y. 
B)  more than 0.5Y but less than 2Y. 
C)  more than 0.5Y 
D)  less than 0.5Y but more than zero. 
E)  none of the above

Question 11

Exhibit 2-3
  
-Refer to Exhibit 2-3.If PPF? is the relevant production possibilities frontier,PPF? may depict

Accepted Answer

A)  economic growth. 
B)  an increase in resources. 
C)  an increase in technology. 
D)  both b and c 
E)  all of the above 
A)  economic growth. 
B)  an increase in resources. 
C)  an increase in technology. 
D)  both b and c 
E)  all of the above

Question 12

If an economy is operating on its production possibilities frontier (PPF),are there any unemployed resources in the economy?

Accepted Answer

A)  Yes, because if there weren't any unemployed resources the economy would be producing beyond its PPF. 
B)  No, because if there were any unemployed resources the economy would be producing below its PPF. 
C)  It depends on whether the economy's PPF is a concave (downward-sloping) curve or a straight line. 
D)  Yes, because there are always some natural resources that are unemployed. 
E)  The answer is "yes," but not for any of the reasons specified in answers a through d. 
A)  Yes, because if there weren't any unemployed resources the economy would be producing beyond its PPF. 
B)  No, because if there were any unemployed resources the economy would be producing below its PPF. 
C)  It depends on whether the economy's PPF is a concave (downward-sloping) curve or a straight line. 
D)  Yes, because there are always some natural resources that are unemployed. 
E)  The answer is "yes," but not for any of the reasons specified in answers a through d.

Question 13

Suppose the economy goes from a point on its production possibilities frontier (PPF)to a point directly to the left of it.Assuming that the PPF has not shifted,this could be due to

Accepted Answer

A)  a gain of resources. 
B)  a loss of resources. 
C)  technological improvement in the production of both goods. 
D)  a new law that interferes with productive efficiency. 
A)  a gain of resources. 
B)  a loss of resources. 
C)  technological improvement in the production of both goods. 
D)  a new law that interferes with productive efficiency.

Question 14

With a constant opportunity cost between goods A and B,the PPF for goods A and B would

Accepted Answer

A)  be a straight line. 
B)  be a bowed-outward line. 
C)  be a bowed-inward line. 
D)  not exist. 
A)  be a straight line. 
B)  be a bowed-outward line. 
C)  be a bowed-inward line. 
D)  not exist.

Question 15

A productive efficient society

Accepted Answer

A)  produces at a point on its PPF. 
B)  can produce more of one good only by giving up some of another good. 
C)  cannot produce unlimited amounts of a good. 
D)  still has to make choices. 
E)  all of the above 
A)  produces at a point on its PPF. 
B)  can produce more of one good only by giving up some of another good. 
C)  cannot produce unlimited amounts of a good. 
D)  still has to make choices. 
E)  all of the above

Question 16

Exhibit 2-9
  
-Refer to Exhibit 2-9.Who has the comparative advantage in the production of good A?

Accepted Answer

A)  Alex 
B)  Adam 
C)  Both Alex and Adam 
D)  Neither Alex nor Adam 
A)  Alex 
B)  Adam 
C)  Both Alex and Adam 
D)  Neither Alex nor Adam

Question 17

Exhibit 2-2
  
-Refer to Exhibit 2-2.If PPF? is the relevant production possibilities frontier,then point __________ is unattainable.

Accepted Answer

A)  A 
B)  G 
C)  D 
D)  J 
A)  A 
B)  G 
C)  D 
D)  J

Question 18

An economy can produce either of these two combinations of goods X and Y: 1,000X and 0Y or 400Y and 0X.Furthermore,the opportunity cost between the two goods is always constant.Which of the following combinations of the two goods,X and Y,is it possible for the economy to produce?

Accepted Answer

A)  700X, 280Y 
B)  600X, 250Y 
C)  400X, 150Y 
D)  100X, 600Y 
E)  300X, 280Y 
A)  700X, 280Y 
B)  600X, 250Y 
C)  400X, 150Y 
D)  100X, 600Y 
E)  300X, 280Y

Question 19

Exhibit 2-1
  
-Refer to Exhibit 2-1.The movement from point A to point B is a movement from

Accepted Answer

A)  a productive efficient point to a productive inefficient point. 
B)  a point with more guns and less butter to a point with more butter and even more guns. 
C)  a productive efficient point to another productive efficient point. 
D)  a productive inefficient point to a productive efficient point. 
A)  a productive efficient point to a productive inefficient point. 
B)  a point with more guns and less butter to a point with more butter and even more guns. 
C)  a productive efficient point to another productive efficient point. 
D)  a productive inefficient point to a productive efficient point.

Question 20

Exhibit 2-1
  
-Refer to Exhibit 2-1.A movement from point B to point D

Accepted Answer

A)  could only happen through economic growth. 
B)  is necessarily a movement from a productive efficient point to a productive inefficient point. 
C)  is a movement from a productive efficient point to another productive efficient point. 
D)  is necessarily a movement from a productive inefficient point to another productive inefficient point. 
A)  could only happen through economic growth. 
B)  is necessarily a movement from a productive efficient point to a productive inefficient point. 
C)  is a movement from a productive efficient point to another productive efficient point. 
D)  is necessarily a movement from a productive inefficient point to another productive inefficient point.

Exam 2: Production Possibilities Frontier Framework

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

Which of the following statements is true?

Exhibit 2-5 -Refer to Exhibit 2-5.The opportunity cost of moving from point C to point B is

The point where the PPF intersects the vertical axis is

Exhibit 2-2 -Refer to Exhibit 2-2.If PPF? is the relevant production possibilities frontier,then point __________ is productive efficient.

Exhibit 2-9 -Refer to Exhibit 2-9.For Alex,the opportunity cost of producing one unit of good A is ____________ unit(s)of good B.

The PPF between goods X and Y will be a downward-sloping

The PPF between goods X and Y will be a downward-sloping

A PPF can

If the law of increasing opportunity costs is operable,and currently the opportunity cost of producing the 1,000th unit of good X is 0.5Y,then the opportunity cost of producing the 2,001st unit of good is X is most likely to be

Exhibit 2-3 -Refer to Exhibit 2-3.If PPF? is the relevant production possibilities frontier,PPF? may depict

If an economy is operating on its production possibilities frontier (PPF),are there any unemployed resources in the economy?

Suppose the economy goes from a point on its production possibilities frontier (PPF)to a point directly to the left of it.Assuming that the PPF has not shifted,this could be due to

With a constant opportunity cost between goods A and B,the PPF for goods A and B would

A productive efficient society

Exhibit 2-9 -Refer to Exhibit 2-9.Who has the comparative advantage in the production of good A?

Exhibit 2-2 -Refer to Exhibit 2-2.If PPF? is the relevant production possibilities frontier,then point __________ is unattainable.

An economy can produce either of these two combinations of goods X and Y: 1,000X and 0Y or 400Y and 0X.Furthermore,the opportunity cost between the two goods is always constant.Which of the following combinations of the two goods,X and Y,is it possible for the economy to produce?

Exhibit 2-1 -Refer to Exhibit 2-1.The movement from point A to point B is a movement from

Exhibit 2-1 -Refer to Exhibit 2-1.A movement from point B to point D

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

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