Exam 2: The Economic Problem

The kitchen manager at an Italian restaurant is deciding what assignments he should give to his two cooks, John and David. John can make 25 pizzas or 40 servings of pasta per hour and David can make 20 pizzas or 30 servings of pasta. Which of the following should be the manager's choice?

-Anna and Maria produce shirts and ties. The figure above shows Anna's PPF and Maria's PPF. Anna and Maria can achieve the gains from trade if Anna produces and Maria produces )

-Refer to the table above, which gives five points on a nation's PPF. The numbers in the table demonstrate that

-Point C on the production possibilities frontier in the above diagram illustrates

Technological change

"If Mexico is currently operating at a point inside its production possibilities frontier, then there are unemployed resources in Mexico." Is this statement true or false? Briefly explain your answer.

What factors generate economic growth?

A person has a comparative advantage in producing a particular good if that person

Marginal benefit is the

Specialization and trade allow countries to consume beyond their PPFs.

If property rights are not clearly defined and enforced, then

Scarcity is represented on a production possibilities frontier figure by

The term "market" refers to

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

-In the above figure, at point b what is the opportunity cost of producing 2 more audio tapes?

-Refer to the production possibilities frontier in the figure above. More of good X must be given up per unit of good Y gained when moving from point b to point a than when moving from point c to point b. This fact

-The above table shows the number of pencils or pens that could be produced by Don and Bob in an hour. This schedule shows that

Economic growth comes from .

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. If Germany produces one less computer and switches resources to cameras, and the United States produces one more computer and takes resources out of cameras, then the net change in camera production in both countries taken together is

Each point on the production possibilities frontier achieves allocative efficiency.