Exam 2: The Economic Problem

Which of the following is a true statement?

If production point of two goods is inside the production possibilities frontier

Any production point outside the production possibilities frontier is

Suppose that when NBC produces 1 new drama series in a season it gives up the chance to produce 3 new reality shows. This means that

-The above table shows production points on Sweet- Tooth Land's production possibilities frontier. What is the opportunity cost of one chocolate bar if Sweet- tooth Land moves from point C to point D?

-The above table shows production points on Sweet- Tooth Land's production possibilities frontier. What is the opportunity cost of one can of cola if Sweet- tooth Land moves from point C to point B?

-Two nations can produce computers and software in the amounts given in the table above. Does either nation have an absolute advantage in producing the products? Which nation has a comparative advantage in computers? Which nation has a comparative advantage in software? Explain your answers.

Economic growth

-In 2006, Country X and Country Y had the same production possibilities, illustrated in the figure above. Country X chose to produce at point A, while country Y chose to produce at point B. In 2012, most likely, Country X will be at point such as while Country Y will be at point such as )

If, on a nation's production possibilities frontier, the marginal benefit of a slice of pizza is 500 tacos while the marginal cost of producing a slice of pizza is 750 tacos, to be allocatively efficient, what should be done?

Increasing opportunity cost occurs along a production possibilities frontier because

Over the past several decades, the United States has devoted a greater fraction of its resources to consumption than Hong Kong, which is why the U.S. economy grew faster than Hong Kong's economy.

Learning- by- doing is a process that can help a person gain a comparative advantage.

A society that is producing on its production possibilities frontier is

-In the production possibilities frontier depicted in the figure above, which of the following combinations of hats and bananas is unattainable?

A tradeoff is

Marginal cost

A production possibilities frontier (PPF)

. -A (very, very small) country produces milk and shirts and its production possibilities frontier is in the table above. The nation is currently producing at point B. What is the opportunity cost of two additional gallons of milk? At point C? At point D? What do your results show?

-The opportunity cost of moving from point a to point b in the above figure is .