Question 1

Production efficiency occurs when production .

Accepted Answer

A)  is at a point beyond the production possibilities frontier 
B)  is on the production possibilities frontier 
C)  is at any attainable point 
D)  is on the production possibilities frontier or inside it 
A)  is at a point beyond the production possibilities frontier 
B)  is on the production possibilities frontier 
C)  is at any attainable point 
D)  is on the production possibilities frontier or inside it

Question 2

If marginal benefit is greater than marginal cost for the production of cars, an economy should increase the production of cars.

Accepted Answer

A) True 
 B)False

Question 3

-In the figure above, both Joe and Jill initially produce at point A. If Joe and Jill realize that they each possess a comparative advantage, which outcome can we expect?

Accepted Answer

A)  Joe will specialize in shirts and Jill will specialize in pants. 
B)  Joe and Jill each will be able to consume more than 2 shirts and 2 pairs of pants. 
C)  Joe will specialize in pants and Jill will specialize in shirts. 
D)  Both answers B and C are correct. 
A)  Joe will specialize in shirts and Jill will specialize in pants. 
B)  Joe and Jill each will be able to consume more than 2 shirts and 2 pairs of pants. 
C)  Joe will specialize in pants and Jill will specialize in shirts. 
D)  Both answers B and C are correct.

Question 4

-Refer to the above figure. Mario is self- sufficient and so is Mia. Each produces 6 dishes of pasta and 4 pizzas. Mario and Mia decide to specialize and trade. After they have specialized and traded, compared to the initial situation, Mia's opportunity cost of pasta has _ and Mario's opportunity cost of a pizza has .

Accepted Answer

A)  decreased, increased 
B)  increased, decreased 
C)  increased, increased 
D)  decreased, decreased 
A)  decreased, increased 
B)  increased, decreased 
C)  increased, increased 
D)  decreased, decreased

Question 5

Markets are best defined as

Accepted Answer

A)  specific geographic locations where people get together to buy and sell. 
B)  hypothetical constructs used to analyze how people form their tastes and preferences. 
C)  arrangements where buyers and sellers get together to buy and sell. 
D)  places where people can inspect goods and services carefully. 
A)  specific geographic locations where people get together to buy and sell. 
B)  hypothetical constructs used to analyze how people form their tastes and preferences. 
C)  arrangements where buyers and sellers get together to buy and sell. 
D)  places where people can inspect goods and services carefully.

Question 6

Economic growth means

Accepted Answer

A)  an outward shift of the PPF. 
B)  an inward shift of the PPF. 
C)  an expansion of production. 
D)  Both answers A and C are correct. 
A)  an outward shift of the PPF. 
B)  an inward shift of the PPF. 
C)  an expansion of production. 
D)  Both answers A and C are correct.

Question 7

-The above table shows production combinations on a country's production possibilities frontier. Which of the following is an example of a point that is unattainable?

Accepted Answer

A)  10 units of good X and 16 units of good Y. 
B)  0 units of good X and 40 units of good Y. 
C)  3 units of good X and 35 units of good Y. 
D)  6 units of good X and 28 units of good Y. 
A)  10 units of good X and 16 units of good Y. 
B)  0 units of good X and 40 units of good Y. 
C)  3 units of good X and 35 units of good Y. 
D)  6 units of good X and 28 units of good Y.

Question 8

Susan likes to drink sodas. The _ soda Susan drinks, the _ of the last soda.

Accepted Answer

A)  more; lower the marginal benefit 
B)  more; higher the marginal benefit 
C)  less; lower the marginal benefit 
D)  less; higher the opportunity cost 
A)  more; lower the marginal benefit 
B)  more; higher the marginal benefit 
C)  less; lower the marginal benefit 
D)  less; higher the opportunity cost

Question 9

-The table above represents the marginal cost and marginal benefit associated with pizza (in terms of movies). What amount of pizza should be produced if resources are to be used efficiently?

Accepted Answer

A)  8 pizzas 
B)  7 pizzas 
C)  6 pizzas 
D)  5 pizzas 
A)  8 pizzas 
B)  7 pizzas 
C)  6 pizzas 
D)  5 pizzas

Question 10

Dynamic comparative advantage occurs because

Accepted Answer

A)  countries produce a lot of different goods. 
B)  of specialization and trade. 
C)  of absolute advantage. 
D)  there is learning- by- doing. 
A)  countries produce a lot of different goods. 
B)  of specialization and trade. 
C)  of absolute advantage. 
D)  there is learning- by- doing.

Question 11

-In the production possibilities frontier depicted in the figure above, which of the following combinations of hats and bananas is generated by an efficient allocation of resources?

Accepted Answer

A)  0 pounds of bananas and 6 million hats 
B)  3 million pounds of bananas and 4 million hats 
C)  2 million pounds of bananas and 5 million hats 
D)  All of the above combinations are efficient. 
A)  0 pounds of bananas and 6 million hats 
B)  3 million pounds of bananas and 4 million hats 
C)  2 million pounds of bananas and 5 million hats 
D)  All of the above combinations are efficient.

Question 12

Production possibilities
-In the above table, the production of 3 pizzas and 80 cases of soda is

Accepted Answer

A)  possible only if there is inflation. 
B)  feasible but would involve unemployed or misallocated resources. 
C)  impossible unless more resources become available or technology improves. 
D)  possible only if the economy produces with maximum efficiency. 
A)  possible only if there is inflation. 
B)  feasible but would involve unemployed or misallocated resources. 
C)  impossible unless more resources become available or technology improves. 
D)  possible only if the economy produces with maximum efficiency.

Question 13

Any point on a production possibilities frontier (PPF) itself is

Accepted Answer

A)  equitable. 
B)  inefficient. 
C)  efficient. 
D)  unattainable. 
A)  equitable. 
B)  inefficient. 
C)  efficient. 
D)  unattainable.

Question 14

A nation produces at a point inside its PPF

Accepted Answer

A)  when it produces inefficiently. 
B)  when its PPF is bowed out. 
C)  when it trades with other nations. 
D)  never. 
A)  when it produces inefficiently. 
B)  when its PPF is bowed out. 
C)  when it trades with other nations. 
D)  never.

Question 15

The market in which an individual sells the use of his or her labor is a

Accepted Answer

A)  foreign exchange market. 
B)  factor market. 
C)  mixed market. 
D)  product market. 
A)  foreign exchange market. 
B)  factor market. 
C)  mixed market. 
D)  product market.

Question 16

-Consider the PPF for office buildings and housing shown in the figure above. Which point in the diagram shows that resources to produce office buildings and housing are being misallocated, unused, or both?

Accepted Answer

A)  Point G 
B)  Point F 
C)  Point H 
D)  Point I 
A)  Point G 
B)  Point F 
C)  Point H 
D)  Point I

Question 17

-Refer to the production possibilities frontier in the figure above. Suppose a country is producing at point a. A movement to point _ means that the country _ .

Accepted Answer

A)  e; is not operating efficiently 
B)  b; is producing at an inefficient point. 
C)  d; gives up 10 million consumer goods. 
D)  d; must give up 20 million capital goods 
A)  e; is not operating efficiently 
B)  b; is producing at an inefficient point. 
C)  d; gives up 10 million consumer goods. 
D)  d; must give up 20 million capital goods

Question 18

-The production possibilities frontier illustrated in the figure above will shift outward the most rapidly if point

Accepted Answer

A)  A is selected. 
B)  B is selected. 
C)  C is selected. 
D)  D is selected. 
A)  A is selected. 
B)  B is selected. 
C)  C is selected. 
D)  D is selected.

Question 19

-Molly just graduated from high school. The figure shows her possibilities frontier. If Molly goes to college, she will move from point M to point K. In terms of consumption goods, Molly's opportunity cost of going to college is

Accepted Answer

A)  OL. 
B)  MK. 
C)  LM. 
D)  KL. 
A)  OL. 
B)  MK. 
C)  LM. 
D)  KL.

Question 20

Because of the existence of comparative advantage, the total output of goods is higher when each producer

Accepted Answer

A)  produces several different goods. 
B)  makes both intermediate and final goods. 
C)  produces at the midpoint of its PPF. 
D)  specializes in the production of a particular good. 
A)  produces several different goods. 
B)  makes both intermediate and final goods. 
C)  produces at the midpoint of its PPF. 
D)  specializes in the production of a particular good.

Production efficiency occurs when production .

If marginal benefit is greater than marginal cost for the production of cars, an economy should increase the production of cars.

-In the figure above, both Joe and Jill initially produce at point A. If Joe and Jill realize that they each possess a comparative advantage, which outcome can we expect?

Markets are best defined as

Economic growth means

-The above table shows production combinations on a country's production possibilities frontier. Which of the following is an example of a point that is unattainable?

Susan likes to drink sodas. The _ soda Susan drinks, the _ of the last soda.

-The table above represents the marginal cost and marginal benefit associated with pizza (in terms of movies). What amount of pizza should be produced if resources are to be used efficiently?

Dynamic comparative advantage occurs because

-In the production possibilities frontier depicted in the figure above, which of the following combinations of hats and bananas is generated by an efficient allocation of resources?

Production possibilities -In the above table, the production of 3 pizzas and 80 cases of soda is

Any point on a production possibilities frontier (PPF) itself is

A nation produces at a point inside its PPF

The market in which an individual sells the use of his or her labor is a

-Consider the PPF for office buildings and housing shown in the figure above. Which point in the diagram shows that resources to produce office buildings and housing are being misallocated, unused, or both?

-Refer to the production possibilities frontier in the figure above. Suppose a country is producing at point a. A movement to point _ means that the country _ .

-The production possibilities frontier illustrated in the figure above will shift outward the most rapidly if point

-Molly just graduated from high school. The figure shows her possibilities frontier. If Molly goes to college, she will move from point M to point K. In terms of consumption goods, Molly's opportunity cost of going to college is

Because of the existence of comparative advantage, the total output of goods is higher when each producer

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

Production efficiency occurs when production .

If marginal benefit is greater than marginal cost for the production of cars, an economy should increase the production of cars.

-In the figure above, both Joe and Jill initially produce at point A. If Joe and Jill realize that they each possess a comparative advantage, which outcome can we expect?

Markets are best defined as

Economic growth means

-The above table shows production combinations on a country's production possibilities frontier. Which of the following is an example of a point that is unattainable?

Susan likes to drink sodas. The _ soda Susan drinks, the _ of the last soda.

-The table above represents the marginal cost and marginal benefit associated with pizza (in terms of movies). What amount of pizza should be produced if resources are to be used efficiently?

Dynamic comparative advantage occurs because

-In the production possibilities frontier depicted in the figure above, which of the following combinations of hats and bananas is generated by an efficient allocation of resources?

Production possibilities -In the above table, the production of 3 pizzas and 80 cases of soda is

Any point on a production possibilities frontier (PPF) itself is

A nation produces at a point inside its PPF

The market in which an individual sells the use of his or her labor is a

-Consider the PPF for office buildings and housing shown in the figure above. Which point in the diagram shows that resources to produce office buildings and housing are being misallocated, unused, or both?

-Refer to the production possibilities frontier in the figure above. Suppose a country is producing at point a. A movement to point _ means that the country _ .

-The production possibilities frontier illustrated in the figure above will shift outward the most rapidly if point

-Molly just graduated from high school. The figure shows her possibilities frontier. If Molly goes to college, she will move from point M to point K. In terms of consumption goods, Molly's opportunity cost of going to college is

Because of the existence of comparative advantage, the total output of goods is higher when each producer

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