Exam 2: The Economic Problem

A Russian economist says: "There was no unemployment in the former Soviet Union, but I believe the Soviet economy produced at a point below its PPF." How could this statement be correct?

-In the figure above, Jill is producing at point A. Jill's opportunity cost producing one pair of pants is

Technological progress makes the production possibilities frontier

As a person consumes more and more of a good, the

-In the production possibilities frontier depicted in the figure above, what is the opportunity cost of increasing the production of bananas from two million pounds to three million pounds?

In one week Alice can produce 5 pairs of shoes or 4 bookshelves while Roger can produce 10 pairs of shoes or 6 bookshelves. Alice should specialize in the production of

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. There can be gains from exchange

"Allocative efficiency in the production of cherries means that consumers can eat all of the cherries they desire." Is this statement true or false?

Production points inside the production possibilities frontier

The principle of increasing marginal cost implies that the

The nation's production possibilities frontier is bowed outward. Suppose that the government decides to increase the production of armaments by $20 billion, and that as a result the output of consumer goods falls by $20 billion. If a further $20 billion increase beyond the initial $20 billion increase in armaments output is sought, we can expect that the output of consumer goods and services will fall further by

-The above table shows production points on Sweet- Tooth Land's production possibilities frontier. Which of the following statements is TRUE?

-In the table above, the marginal benefit of the 4 millionth television set is

Which of the following causes the production possibilities frontier to have a bowed out, curvilinear shape?

Compare and contrast production and allocative efficiency.

A system of property rights

Based on the above, which figure shows the impact of a worldwide reduction in labor?

Households are buyers in factor markets and sellers in goods markets.

Consider a PPF for tapes and soda. If the opportunity cost of a tape increases as the quantity of tapes produced increases and also the opportunity cost of a soda increases as the quantity of soda produced increases, then the PPF between the two goods will be

"The United States is more productive in most activities than are most of other countries because it has an absolute advantage in the production of most goods and services. Therefore we should restrict international trade as it only benefits other countries at the expense of the United States." Comment on this statement.