Question 1

An opportunity cost of economic growth is

Accepted Answer

A)  decreased by the creation of capital goods rather than consumption goods. 
B)  the decrease in production of consumption goods in the present time period. 
C)  so high that places such as Hong Kong have had to do without it. 
D)  essentially zero because economic growth leads to such large gains in the long run. 
A)  decreased by the creation of capital goods rather than consumption goods. 
B)  the decrease in production of consumption goods in the present time period. 
C)  so high that places such as Hong Kong have had to do without it. 
D)  essentially zero because economic growth leads to such large gains in the long run. B

Question 2

A bowed outward production possibilities frontier occurs when

Accepted Answer

A)  as more of a good is produced, producing additional units of it require greater reductions in the other good. 
B)  opportunity costs are constant. 
C)  resources are not scarce. 
D)  the society is operating on the production possibilities frontier. 
A)  as more of a good is produced, producing additional units of it require greater reductions in the other good. 
B)  opportunity costs are constant. 
C)  resources are not scarce. 
D)  the society is operating on the production possibilities frontier. A

Question 3

Using a production possibilities frontier, economic growth is illustrated by a

Accepted Answer

A)  point on the curve. 
B)  rightward shift of the curve. 
C)  point inside the curve. 
D)  movement from one point on the curve to another point on the curve. 
A)  point on the curve. 
B)  rightward shift of the curve. 
C)  point inside the curve. 
D)  movement from one point on the curve to another point on the curve. B

Question 4

Marginal cost is the opportunity cost

Accepted Answer

A)  of a good or service that exceeds its benefit. 
B)  that your activity imposes on someone else. 
C)  that arises from producing one more unit of a good or service. 
D)  of a good or service divided by the number of units produced. 
A)  of a good or service that exceeds its benefit. 
B)  that your activity imposes on someone else. 
C)  that arises from producing one more unit of a good or service. 
D)  of a good or service divided by the number of units produced.

Question 5

Country A can produce 1 cello by giving up the production of 5 guitars. Country B can produce 1 guitar by giving up the production of 4 cellos. In which good does country A have a comparative advantage?

Accepted Answer

A)  cellos 
B)  guitars 
C)  both goods 
D)  neither good 
A)  cellos 
B)  guitars 
C)  both goods 
D)  neither good

Question 6

An increase in the nation's capital stock will

Accepted Answer

A)  shift the PPF outward. 
B)  cause a movement along the PPF down and to the right. 
C)  cause a movement along the PPF up and to the left. 
D)  move the nation from producing within the PPF to producing at a point closer to the PPF. 
A)  shift the PPF outward. 
B)  cause a movement along the PPF down and to the right. 
C)  cause a movement along the PPF up and to the left. 
D)  move the nation from producing within the PPF to producing at a point closer to the PPF.

Question 7

-In the above figure, point A is _ , and point B is _ .

Accepted Answer

A)  unattainable, attainable 
B)  unattainable, unattainable 
C)  attainable, attainable 
D)  attainable, unattainable 
A)  unattainable, attainable 
B)  unattainable, unattainable 
C)  attainable, attainable 
D)  attainable, unattainable

Question 8

A marginal cost curve

Accepted Answer

A)  shows that as more of a good is produced, opportunity costs of producing another unit increase. 
B)  is upward sloping. 
C)  is bowed inward so that its slope can become negative. 
D)  Both answers A and B are correct. 
A)  shows that as more of a good is produced, opportunity costs of producing another unit increase. 
B)  is upward sloping. 
C)  is bowed inward so that its slope can become negative. 
D)  Both answers A and B are correct.

Question 9

Suppose Joe can prepare 10 sandwiches or 5 pizzas in an hour and Beth can produce 12 sandwiches or 9 pizzas. Which of the following is true?

Accepted Answer

A)  Beth should produce pizza because she has a higher opportunity cost of producing pizza than does Joe. 
B)  Joe should produce pizza because he has a lower opportunity cost of producing pizza than does Beth. 
C)  Beth should produce pizza because she has a lower opportunity cost of producing pizza than does Joe. 
D)  Joe should produce pizza because he has a higher opportunity cost of producing pizza than does Beth. 
A)  Beth should produce pizza because she has a higher opportunity cost of producing pizza than does Joe. 
B)  Joe should produce pizza because he has a lower opportunity cost of producing pizza than does Beth. 
C)  Beth should produce pizza because she has a lower opportunity cost of producing pizza than does Joe. 
D)  Joe should produce pizza because he has a higher opportunity cost of producing pizza than does Beth.

Question 10

When a nation has a comparative advantage in the production of a particular good,

Accepted Answer

A)  the opportunity cost of producing that good is higher than that of other goods. 
B)  the nation can gain from trade. 
C)  the comparative advantage encourages self- sufficiency. 
D)  the nation tends to avoid specialization. 
A)  the opportunity cost of producing that good is higher than that of other goods. 
B)  the nation can gain from trade. 
C)  the comparative advantage encourages self- sufficiency. 
D)  the nation tends to avoid specialization.

Question 11

-According to the diagram in the figure above, an allocatively efficient use of resources requires that production and consumption of gasoline be

Accepted Answer

A)  1 million gallons of gasoline per year. 
B)  4 million gallons of gasoline per year. 
C)  3 million gallons of gasoline per year. 
D)  2 million gallons of gasoline per year. 
A)  1 million gallons of gasoline per year. 
B)  4 million gallons of gasoline per year. 
C)  3 million gallons of gasoline per year. 
D)  2 million gallons of gasoline per year.

Question 12

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

Accepted Answer

A)  12 computers in exchange for 12 TVs. 
B)  6 computers in exchange for 6 TVs. 
C)  12 computers in exchange for 6 TVs. 
D)  6 computers in exchange for 12 TVs. 
A)  12 computers in exchange for 12 TVs. 
B)  6 computers in exchange for 6 TVs. 
C)  12 computers in exchange for 6 TVs. 
D)  6 computers in exchange for 12 TVs.

Question 13

Economic growth can be represented by

Accepted Answer

A)  an inward shift of the production possibilities frontier (PPF). 
B)  an outward shift of the production possibilities frontier (PPF). 
C)  a movement down the production possibilities frontier (PPF). 
D)  a movement up the production possibilities frontier (PPF). 
A)  an inward shift of the production possibilities frontier (PPF). 
B)  an outward shift of the production possibilities frontier (PPF). 
C)  a movement down the production possibilities frontier (PPF). 
D)  a movement up the production possibilities frontier (PPF).

Question 14

-The table above lists six points on the production possibilities frontier for grain and cars. What is the opportunity cost of producing the 5th ton of grain?

Accepted Answer

A)  16 cars 
B)  6 cars 
C)  2 cars 
D)  3 cars 
A)  16 cars 
B)  6 cars 
C)  2 cars 
D)  3 cars

Question 15

Why is the production possibilities frontier bowed out?

Accepted Answer

The production possibilities frontier is

Question 16

-The opportunity cost of producing a unit of consumption at point b in the figure point a.

Accepted Answer

A)  is less than at 
B)  cannot be compared with 
C)  is greater than at 
D)  is the same as 
A)  is less than at 
B)  cannot be compared with 
C)  is greater than at 
D)  is the same as

Question 17

The more we have of a good or service, the smaller is its marginal benefit and the less we are willing to pay for an additional unit of it.

Accepted Answer

A) True 
 B)False

Question 18

Agnes can produce either 1 unit of X or 1 unit of Y in an hour, while Brenda can produce either 2 units of X or 4 units of Y in an hour.

Accepted Answer

A)  Agnes has a comparative advantage in the production of Y. 
B)  Brenda has a comparative advantage in the production of X. 
C)  Brenda cannot gain from trade. 
D)  Brenda has an absolute advantage over Agnes. 
A)  Agnes has a comparative advantage in the production of Y. 
B)  Brenda has a comparative advantage in the production of X. 
C)  Brenda cannot gain from trade. 
D)  Brenda has an absolute advantage over Agnes.

Question 19

Opportunity cost is expressed in a production possibilities frontier (PPF) by a movement

Accepted Answer

A)  from the region within the PPF to a point on the PPF. 
B)  from the region outside of the PPF to a point on the PPF. 
C)  from the region within the PPF to the region outside of the PPF. 
D)  along the PPF where to gain more of one good it is necessary to give some of another good. 
A)  from the region within the PPF to a point on the PPF. 
B)  from the region outside of the PPF to a point on the PPF. 
C)  from the region within the PPF to the region outside of the PPF. 
D)  along the PPF where to gain more of one good it is necessary to give some of another good.

Question 20

-Opportunity cost is represented on the production possibilities frontier by

Accepted Answer

A)  the amount of good Y forgone when more of good X is produced. 
B)  attainable and unattainable points. 
C)  efficient and inefficient points. 
D)  technological progress. 
A)  the amount of good Y forgone when more of good X is produced. 
B)  attainable and unattainable points. 
C)  efficient and inefficient points. 
D)  technological progress.

An opportunity cost of economic growth is

A bowed outward production possibilities frontier occurs when

Using a production possibilities frontier, economic growth is illustrated by a

Marginal cost is the opportunity cost

Country A can produce 1 cello by giving up the production of 5 guitars. Country B can produce 1 guitar by giving up the production of 4 cellos. In which good does country A have a comparative advantage?

An increase in the nation's capital stock will

-In the above figure, point A is _ , and point B is _ .

A marginal cost curve

Suppose Joe can prepare 10 sandwiches or 5 pizzas in an hour and Beth can produce 12 sandwiches or 9 pizzas. Which of the following is true?

When a nation has a comparative advantage in the production of a particular good,

-According to the diagram in the figure above, an allocatively efficient use of resources requires that production and consumption of gasoline be

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

Economic growth can be represented by

-The table above lists six points on the production possibilities frontier for grain and cars. What is the opportunity cost of producing the 5th ton of grain?

Why is the production possibilities frontier bowed out?

-The opportunity cost of producing a unit of consumption at point b in the figure point a.

The more we have of a good or service, the smaller is its marginal benefit and the less we are willing to pay for an additional unit of it.

Agnes can produce either 1 unit of X or 1 unit of Y in an hour, while Brenda can produce either 2 units of X or 4 units of Y in an hour.

Opportunity cost is expressed in a production possibilities frontier (PPF) by a movement

-Opportunity cost is represented on the production possibilities frontier by

What Is Economics

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 2: The Economic Problem

An opportunity cost of economic growth is

A bowed outward production possibilities frontier occurs when

Using a production possibilities frontier, economic growth is illustrated by a

Marginal cost is the opportunity cost

Country A can produce 1 cello by giving up the production of 5 guitars. Country B can produce 1 guitar by giving up the production of 4 cellos. In which good does country A have a comparative advantage?

An increase in the nation's capital stock will

-In the above figure, point A is _ , and point B is _ .

A marginal cost curve

Suppose Joe can prepare 10 sandwiches or 5 pizzas in an hour and Beth can produce 12 sandwiches or 9 pizzas. Which of the following is true?

When a nation has a comparative advantage in the production of a particular good,

-According to the diagram in the figure above, an allocatively efficient use of resources requires that production and consumption of gasoline be

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

Economic growth can be represented by

-The table above lists six points on the production possibilities frontier for grain and cars. What is the opportunity cost of producing the 5th ton of grain?

Why is the production possibilities frontier bowed out?

-The opportunity cost of producing a unit of consumption at point b in the figure point a.

The more we have of a good or service, the smaller is its marginal benefit and the less we are willing to pay for an additional unit of it.

Agnes can produce either 1 unit of X or 1 unit of Y in an hour, while Brenda can produce either 2 units of X or 4 units of Y in an hour.

Opportunity cost is expressed in a production possibilities frontier (PPF) by a movement

-Opportunity cost is represented on the production possibilities frontier by

What Is Economics

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters