Question 1

Exhibit 2-4
  
-Refer to Exhibit 2-4.The line joining points A and D is called the

Accepted Answer

A)  production function frontier. 
B)  utility function. 
C)  production possibilities frontier. 
D)  demand curve. 
A)  production function frontier. 
B)  utility function. 
C)  production possibilities frontier. 
D)  demand curve.

Question 2

The economy moves from point A,where it produces 100X and 200Y,to point B,where it produces 200X and 150Y.It follows that

Accepted Answer

A)  point A is a productive inefficient point. 
B)  point A may be a productive inefficient point. 
C)  point A may be a productive efficient point. 
D)  point B is a productive efficient point. 
E)  b and c 
A)  point A is a productive inefficient point. 
B)  point A may be a productive inefficient point. 
C)  point A may be a productive efficient point. 
D)  point B is a productive efficient point. 
E)  b and c

Question 3

The law of increasing opportunity cost helps to explain why PPF's are typically bowed-outward.

Accepted Answer

A) True 
 B)False

Question 4

Exhibit 2-3
  
-Refer to Exhibit 2-3.If PPF? is the relevant production possibilities frontier,society can choose points that lie only

Accepted Answer

A)  below PPF1. 
B)  below or on PPF1. 
C)  on PPF2. 
D)  none of the above 
A)  below PPF1. 
B)  below or on PPF1. 
C)  on PPF2. 
D)  none of the above

Question 5

A society is productive inefficient when

Accepted Answer

A)  it produces at a point inside or below its PPF. 
B)  it does not produce the maximum output with its given resources and technology. 
C)  it can produce more of one good without giving up some of another good. 
D)  both a and b 
E)  all of the above 
A)  it produces at a point inside or below its PPF. 
B)  it does not produce the maximum output with its given resources and technology. 
C)  it can produce more of one good without giving up some of another good. 
D)  both a and b 
E)  all of the above

Question 6

Consider two straight-line PPFs.They have the same vertical intercept,but curve I is flatter than curve II.The opportunity cost of producing the good on the vertical axis

Accepted Answer

A)  is greater along curve I. 
B)  is greater along curve II. 
C)  is the same along both curves. 
D)  cannot be compared for the two curves without more information. 
A)  is greater along curve I. 
B)  is greater along curve II. 
C)  is the same along both curves. 
D)  cannot be compared for the two curves without more information.

Question 7

In a PPF graph of goods X and Y,points that lie beyond (to the right of)the PPF represent combinations of the two goods that are currently unattainable.

Accepted Answer

A) True 
 B)False

Question 8

Exhibit 2-6
  
-Refer to Exhibit 2-6.Which graph depicts a discovery of a new cheap source of energy that assists in the production of both good X and 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 9

If there is always a 4-for-1 tradeoff between producing good X and good Y,it follows that the opportunity cost of X (in terms of Y)____________________ and the PPF for these two goods is ______________________.

Accepted Answer

A)  decreases at low levels of X; a straight line 
B)  rises at high levels of Y; bowed-outward 
C)  decreases at high levels of X; bowed-outward 
D)  is always the same; a straight line 
A)  decreases at low levels of X; a straight line 
B)  rises at high levels of Y; bowed-outward 
C)  decreases at high levels of X; bowed-outward 
D)  is always the same; a straight line

Question 10

Exhibit 2-4
  
-Refer to Exhibit 2-4.This economy is productive

Accepted Answer

A)  efficient, if it operates at point B or C. 
B)  efficient, if it operates at point A or D. 
C)  inefficient, if it operates at point A or D. 
D)  inefficient regardless of the particular point. 
E)  both a and b 
A)  efficient, if it operates at point B or C. 
B)  efficient, if it operates at point A or D. 
C)  inefficient, if it operates at point A or D. 
D)  inefficient regardless of the particular point. 
E)  both a and b

Question 11

An economy is productive efficient if it produces

Accepted Answer

A)  more than enough food to feed everyone. 
B)  more goods and services in each successive year. 
C)  maximum output with given resources and technology. 
D)  enough output so that no one lives in poverty. 
A)  more than enough food to feed everyone. 
B)  more goods and services in each successive year. 
C)  maximum output with given resources and technology. 
D)  enough output so that no one lives in poverty.

Question 12

A decrease in the quantity of resources

Accepted Answer

A)  shifts the PPF leftward. 
B)  shifts the PPF rightward. 
C)  moves the economy up a given PPF. 
D)  moves the economy down a given PPF. 
A)  shifts the PPF leftward. 
B)  shifts the PPF rightward. 
C)  moves the economy up a given PPF. 
D)  moves the economy down a given PPF.

Exam 2: Production Possibilities Frontier Framework

Exhibit 2-4 -Refer to Exhibit 2-4.The line joining points A and D is called the

The economy moves from point A,where it produces 100X and 200Y,to point B,where it produces 200X and 150Y.It follows that

The law of increasing opportunity cost helps to explain why PPF's are typically bowed-outward.

Exhibit 2-3 -Refer to Exhibit 2-3.If PPF? is the relevant production possibilities frontier,society can choose points that lie only

A society is productive inefficient when

Consider two straight-line PPFs.They have the same vertical intercept,but curve I is flatter than curve II.The opportunity cost of producing the good on the vertical axis

In a PPF graph of goods X and Y,points that lie beyond (to the right of)the PPF represent combinations of the two goods that are currently unattainable.

Exhibit 2-6 -Refer to Exhibit 2-6.Which graph depicts a discovery of a new cheap source of energy that assists in the production of both good X and good Y?

If there is always a 4-for-1 tradeoff between producing good X and good Y,it follows that the opportunity cost of X (in terms of Y)____________________ and the PPF for these two goods is ______________________.

Exhibit 2-4 -Refer to Exhibit 2-4.This economy is productive

An economy is productive efficient if it produces

A decrease in the quantity of resources

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

If there is always a 4-for-1 tradeoff between producing good X and good Y,it follows that the opportunity cost of X (in terms of Y) and the PPF for these two goods is __.