Question 1

On the vertical axis, the production possibilities frontier shows ; on the horizontal axis, the production possibilities frontier shows .

Accepted Answer

A)  the quantity of a good; a weighted average of resources used to produce the good 
B)  the quantity of one good; the quantity of another good 
C)  the quantity of a good; the number of workers employed to produce the good 
D)  the quantity of a good; the price of the good 
A)  the quantity of a good; a weighted average of resources used to produce the good 
B)  the quantity of one good; the quantity of another good 
C)  the quantity of a good; the number of workers employed to produce the good 
D)  the quantity of a good; the price of the good

Question 2

Suppose the country of Popcorn produces only jets and corn. If Popcorn cannot produce any more jets without giving up corn, we say that Popcorn has achieved

Accepted Answer

A)  production efficiency. 
B)  the highest opportunity cost. 
C)  the lowest marginal cost. 
D)  the highest marginal benefit. 
A)  production efficiency. 
B)  the highest opportunity cost. 
C)  the lowest marginal cost. 
D)  the highest marginal benefit.

Question 3

-Omar and John can fix computers or write computer programs. The table above shows the number of computers can fix and the lines of code they can write in a day.
a) Who, if anyone, has the absolute advantage?
b) Who has the comparative advantage in fixing computers? Why?
c) Who has the comparative advantage in writing programs? Why?

Accepted Answer

a) Omar has an absolute advantage in fix

Question 4

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 has advantage in producing .

Accepted Answer

A)  an absolute; shoes 
B)  an absolute; bookshelves 
C)  a comparative; bookshelves 
D)  a comparative; shoes 
A)  an absolute; shoes 
B)  an absolute; bookshelves 
C)  a comparative; bookshelves 
D)  a comparative; shoes

Question 5

An expansion of the production possibilities frontier is

Accepted Answer

A)  called economic growth. 
B)  something that has occurred only rarely in history. 
C)  proof that scarcity is not a binding constraint. 
D)  a free gift of nature. 
A)  called economic growth. 
B)  something that has occurred only rarely in history. 
C)  proof that scarcity is not a binding constraint. 
D)  a free gift of nature.

Question 6

Explain why the production possibilities frontier bows outward.

Accepted Answer

The bowed outward PPF reflects increasin

Question 7

A production possibilities frontier illustrates the maximum amount of two different goods that can be produced if

Accepted Answer

A)  low- skilled workers can be prevented from taking jobs away from high- skilled workers. 
B)  society is using all its resources in the most efficient manner possible. 
C)  the prices of both goods are held constant. 
D)  the prices of both goods are identical. 
A)  low- skilled workers can be prevented from taking jobs away from high- skilled workers. 
B)  society is using all its resources in the most efficient manner possible. 
C)  the prices of both goods are held constant. 
D)  the prices of both goods are identical.

Question 8

Tom Petty excels at producing rock videos. Tom Clancy excels at writing military novels. The difference in their skills is one reason why the production possibilities frontier for videos and novels

Accepted Answer

A)  is shallower to the right. 
B)  is steeper to the right. 
C)  has a constant slope. 
D)  has a positive slope. 
A)  is shallower to the right. 
B)  is steeper to the right. 
C)  has a constant slope. 
D)  has a positive slope.

Question 9

The production possibilities frontier bows outward because

Accepted Answer

A)  opportunity costs are decreasing as the production of a good increases. 
B)  resources are of uniform quality. 
C)  opportunity costs are increasing as the production of a good increases. 
D)  opportunity costs are fixed as the production of a good increases. 
A)  opportunity costs are decreasing as the production of a good increases. 
B)  resources are of uniform quality. 
C)  opportunity costs are increasing as the production of a good increases. 
D)  opportunity costs are fixed as the production of a good increases.

Question 10

The production possibilities frontier is

Accepted Answer

A)  downward sloping and reflects tradeoffs in choices. 
B)  upward sloping and reflects unlimited choices. 
C)  upward sloping and reflects tradeoffs in choices. 
D)  downward sloping and reflects unlimited choices. 
A)  downward sloping and reflects tradeoffs in choices. 
B)  upward sloping and reflects unlimited choices. 
C)  upward sloping and reflects tradeoffs in choices. 
D)  downward sloping and reflects unlimited choices.

Question 11

A point inside a production possibilities frontier

Accepted Answer

A)  is more efficient than points on the production possibilities frontier. 
B)  could indicate that some resources are unemployed. 
C)  is unattainable. 
D)  implies that too much capital and not enough labor are being used. 
A)  is more efficient than points on the production possibilities frontier. 
B)  could indicate that some resources are unemployed. 
C)  is unattainable. 
D)  implies that too much capital and not enough labor are being used.

Question 12

Opportunity cost is

Accepted Answer

A)  the indirect cost. 
B)  the monetary cost. 
C)  the best choice that can be made. 
D)  the highest- valued alternative forgone. 
A)  the indirect cost. 
B)  the monetary cost. 
C)  the best choice that can be made. 
D)  the highest- valued alternative forgone.

Question 13

Marginal benefit is the benefit

Accepted Answer

A)  of consuming another good or service divided by the total number of goods or services produced. 
B)  of producing a good or service when the total benefit from the good or service exceeds its total cost. 
C)  that your activity provides to someone else. 
D)  that is received from consuming one more unit of a good or service. 
A)  of consuming another good or service divided by the total number of goods or services produced. 
B)  of producing a good or service when the total benefit from the good or service exceeds its total cost. 
C)  that your activity provides to someone else. 
D)  that is received from consuming one more unit of a good or service.

Question 14

Which of the following is NOT illustrated by a production possibilities frontier?

Accepted Answer

A)  who gets the goods 
B)  necessity for choice 
C)  opportunity cost 
D)  scarcity 
A)  who gets the goods 
B)  necessity for choice 
C)  opportunity cost 
D)  scarcity

Question 15

Comparative advantage is

Accepted Answer

A)  the ability to perform an activity at a zero opportunity cost. 
B)  identical to absolute advantage. 
C)  the ability to perform an activity at a higher opportunity cost than anyone else. 
D)  the ability to perform an activity at a lower opportunity cost than anyone else. 
A)  the ability to perform an activity at a zero opportunity cost. 
B)  identical to absolute advantage. 
C)  the ability to perform an activity at a higher opportunity cost than anyone else. 
D)  the ability to perform an activity at a lower opportunity cost than anyone else.

Question 16

What is a dynamic comparative advantage? What generates it? What are some examples of nations that have used this type of comparative advantage?

Accepted Answer

A dynamic comparative advantage is gener

Question 17

-Victor currently produces nuts and bolts at point a in the figure. Victor's marginal cost of producing an additional nut is .

Accepted Answer

A)  8 bolts 
B)  8/6 bolts 
C)  1/2 bolt 
D)  1 bolt 
A)  8 bolts 
B)  8/6 bolts 
C)  1/2 bolt 
D)  1 bolt

Question 18

China's State Council has encouraged more spending to "improve transportation links and other infrastructure... ." It will also "step up its spending on vocational training and other educational programs for adults."
HYPERLINK "http://www.nytimes.com/" www.nytimes.com, Keith Bradsher, October 19, 2008
Suppose that capital goods are on the vertical axis while consumption goods are on the horizontal axis of China's PPF. As a result of enacting the policies, China's PPF will

Accepted Answer

A)  rotate outward. 
B)  become flatter. 
C)  shift inward. 
D)  shift outward. 
A)  rotate outward. 
B)  become flatter. 
C)  shift inward. 
D)  shift outward.

Question 19

Moving from one point on the production possibilities frontier to another _ .

Accepted Answer

A)  involves a tradeoff and incurs an opportunity cost 
B)  involves no tradeoff but it does incur an opportunity cost 
C)  involves an opportunity cost but no tradeoff 
D)  involves a tradeoff but does not incur an opportunity cost 
A)  involves a tradeoff and incurs an opportunity cost 
B)  involves no tradeoff but it does incur an opportunity cost 
C)  involves an opportunity cost but no tradeoff 
D)  involves a tradeoff but does not incur an opportunity cost

Question 20

-Leisure Land produces only sun screen and camel rides. The table shows the marginal benefit and marginal cost schedules for sun screen and camel rides. The allocatively efficient number of camel rides is .

Accepted Answer

A)  4 rides per day 
B)  6 rides per day because that is the maximum number of rides 
C)  2 rides per day 
D)  1 ride per day because the marginal benefit exceeds the marginal cost by as much as possible 
A)  4 rides per day 
B)  6 rides per day because that is the maximum number of rides 
C)  2 rides per day 
D)  1 ride per day because the marginal benefit exceeds the marginal cost by as much as possible

On the vertical axis, the production possibilities frontier shows ; on the horizontal axis, the production possibilities frontier shows .

Suppose the country of Popcorn produces only jets and corn. If Popcorn cannot produce any more jets without giving up corn, we say that Popcorn has achieved

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 has advantage in producing .

An expansion of the production possibilities frontier is

Explain why the production possibilities frontier bows outward.

A production possibilities frontier illustrates the maximum amount of two different goods that can be produced if

Tom Petty excels at producing rock videos. Tom Clancy excels at writing military novels. The difference in their skills is one reason why the production possibilities frontier for videos and novels

The production possibilities frontier bows outward because

The production possibilities frontier is

A point inside a production possibilities frontier

Opportunity cost is

Marginal benefit is the benefit

Which of the following is NOT illustrated by a production possibilities frontier?

Comparative advantage is

What is a dynamic comparative advantage? What generates it? What are some examples of nations that have used this type of comparative advantage?

-Victor currently produces nuts and bolts at point a in the figure. Victor's marginal cost of producing an additional nut is .

Moving from one point on the production possibilities frontier to another _ .

-Leisure Land produces only sun screen and camel rides. The table shows the marginal benefit and marginal cost schedules for sun screen and camel rides. The allocatively efficient number of camel rides is .

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

On the vertical axis, the production possibilities frontier shows ; on the horizontal axis, the production possibilities frontier shows .

Suppose the country of Popcorn produces only jets and corn. If Popcorn cannot produce any more jets without giving up corn, we say that Popcorn has achieved

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 has advantage in producing .

An expansion of the production possibilities frontier is

Explain why the production possibilities frontier bows outward.

A production possibilities frontier illustrates the maximum amount of two different goods that can be produced if

Tom Petty excels at producing rock videos. Tom Clancy excels at writing military novels. The difference in their skills is one reason why the production possibilities frontier for videos and novels

The production possibilities frontier bows outward because

The production possibilities frontier is

A point inside a production possibilities frontier

Opportunity cost is

Marginal benefit is the benefit

Which of the following is NOT illustrated by a production possibilities frontier?

Comparative advantage is

What is a dynamic comparative advantage? What generates it? What are some examples of nations that have used this type of comparative advantage?

-Victor currently produces nuts and bolts at point a in the figure. Victor's marginal cost of producing an additional nut is .

Moving from one point on the production possibilities frontier to another _ .

-Leisure Land produces only sun screen and camel rides. The table shows the marginal benefit and marginal cost schedules for sun screen and camel rides. The allocatively efficient number of camel rides is .

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