Exam 2: The Economic Problem

The tradeoff between current consumption and the production of capital goods also reflects a tradeoff between

-In the above figure, which point represents an unattainable production combination of the two goods?

-In the above figure, when 2000 bicycles are produced each month, we can see that

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. The opportunity cost of producing a unit of X is

Production possibilities -In the above table, the opportunity cost of the 2nd pizza is

Suppose that a typical German factory can produce 20 cameras or 1 computer in an hour, and that a typical American factory can produce 10 cameras or one computer in an hour. The opportunity cost of 20 cameras in terms of computers in the United States is

Resource use is allocatively efficient when

At one point along a PPF, 10 pizzas and 7 sandwiches can be produced. At another point along the same PPF, 9 pizzas and 10 sandwiches can be produced. The opportunity cost of a pizza between these points is per pizza.

Missouri can produce 10,000 tons of pecans per year or 5,000 tons of pears per year. Washington can produce 12,000 tons of pecans per year or 48,000 tons of pears per year. Which of the following statements about opportunity cost is correct?

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

If Sam is producing at a point on his production possibilities frontier, then he

A PPF bows outward because

When operating on its PPF, a country can produce 2 tons of butter and 200 cars OR 3 tons of butter and 150 cars. The opportunity cost of 1 ton of butter is _ _ cars per ton of butter.

The fact that opportunity costs increase while moving along a production possibilities frontier means that the production possibilities frontier will

Homer and Teddy are stranded on a desert island. To feed themselves each day they can either catch fish or pick fruit. In a day, Teddy could pick 60 pieces of fruit or catch 20 fish. Homer could pick 100 pieces of fruit or catch 150 fish. Which of the following is correct?

A society that is on its production possibilities frontier is

Beth reads two magazines this afternoon. The marginal benefit that Beth gets from the second magazine is the _ .

By specialization and trade, two individuals can

Which of the following statements regarding the production possibilities frontier is true?

Employees at Bank of America are good at providing banking services and workers at Ben & Jerry's are good at making ice cream. If some bankers are moved to making ice cream, we get a small increase in the amount of ice cream produced and a large decrease in the amount of banking services provided. If the PPF has banking services on the vertical axis and ice cream on the horizontal axis, the effect of the change reflects