Question 1

-In the above figure, if 2 million computers are produced per year then the____________ should be produced to achieve the allocatively efficient use of resources

Accepted Answer

A)  marginal cost of a computer exceeds the marginal benefit of a computer, so fewer computers 
B)  marginal benefit of a computer exceeds the marginal cost of a computer, so fewer computers 
C)  marginal cost of a computer exceeds the marginal benefit of a computer, so more computers 
D)  marginal benefit of a computer exceeds the marginal cost of a computer, so more computers 
A)  marginal cost of a computer exceeds the marginal benefit of a computer, so fewer computers 
B)  marginal benefit of a computer exceeds the marginal cost of a computer, so fewer computers 
C)  marginal cost of a computer exceeds the marginal benefit of a computer, so more computers 
D)  marginal benefit of a computer exceeds the marginal cost of a computer, so more computers

Question 2

When economists state that the opportunity cost of a product increases as more of it is produced, what do they mean? What is the opportunity cost?

Accepted Answer

In general, the opportunity cost of incr

Question 3

-The country whose production possibilities frontier is illustrated above is currently at position A
On the production possibilities frontier. If it wishes to move to position B, it will

Accepted Answer

A)  incur an opportunity cost of having to give up some butter in order to make the additional amount of guns desired. 
B)  be able to make the desired switch only if there is a significant improvement in the technology available to the nation. 
C)  have to employ all currently unemployed resources to accomplish this. 
D)  find this change impossible to achieve given the resources it currently possesses. 
A)  incur an opportunity cost of having to give up some butter in order to make the additional amount of guns desired. 
B)  be able to make the desired switch only if there is a significant improvement in the technology available to the nation. 
C)  have to employ all currently unemployed resources to accomplish this. 
D)  find this change impossible to achieve given the resources it currently possesses.

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 should specialize in the production of

Accepted Answer

A)  bookshelves. 
B)  shoes. 
C)  either shoes or bookshelves. 
D)  neither shoes nor bookshelves. 
A)  bookshelves. 
B)  shoes. 
C)  either shoes or bookshelves. 
D)  neither shoes nor bookshelves.

Question 5

A computer software program is most strongly an example of

Accepted Answer

A)  intellectual property. 
B)  real property. 
C)  fiat property. 
D)  vicarious property. 
A)  intellectual property. 
B)  real property. 
C)  fiat property. 
D)  vicarious property.

Question 6

Omar and John can fix computers or write computer programs. The table above shows the number of computers they 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 7

In March a factory used new technology to produce its output. Then in August a fire destroys half the factory. The new technology shifted the factoryʹs PPF and the fire shifted it .

Accepted Answer

A)  inward; inward 
B)  outward; outward 
C)  inward; outward 
D)  outward; inward 
A)  inward; inward 
B)  outward; outward 
C)  inward; outward 
D)  outward; inward

Question 8

Economic growth is shown on the production possibilities frontier as

Accepted Answer

A)  an inward shift in the PPF. 
B)  a movement from one point on the PPF to another. 
C)  an outward shift in the PPF. 
D)  the curvature of the PPF. 
A)  an inward shift in the PPF. 
B)  a movement from one point on the PPF to another. 
C)  an outward shift in the PPF. 
D)  the curvature of the PPF.

Question 9

Points outside the production possibilities frontier illustrate production points that cannot be attained.

Accepted Answer

A) True 
 B)False

Question 10

Opportunity cost is illustrated in a production possibilities frontier PPF) by a movement

Accepted Answer

A)  from the region within the PPF to the region outside of the PPF. 
B)  from the region within the PPF to a point on the PPF. 
C)  from the region outside of the PPF to a point on the PPF. 
D)  along the PPF where to gain more of one good it is necessary to give some of another good. 
A)  from the region within the PPF to the region outside of the PPF. 
B)  from the region within the PPF to a point on the PPF. 
C)  from the region outside of the PPF to a point on the PPF. 
D)  along the PPF where to gain more of one good it is necessary to give some of another good.

Question 11

Tom and Di grow tomatoes and turnips. Tom has a comparative advantage in growing tomatoes if_____________

Accepted Answer

A)  Tom can grow more tomatoes than Di can 
B)  his marginal benefit from tomatoes is greater than Diʹs 
C)  his opportunity cost of tomatoes is less than his opportunity cost of turnips 
D)  his opportunity cost of tomatoes is less than Diʹs opportunity cost of tomatoes 
A)  Tom can grow more tomatoes than Di can 
B)  his marginal benefit from tomatoes is greater than Diʹs 
C)  his opportunity cost of tomatoes is less than his opportunity cost of turnips 
D)  his opportunity cost of tomatoes is less than Diʹs opportunity cost of tomatoes

Question 12

The table above lists seven points on the production possibilities frontier for pizza and CDs. Graph the PPF. What is the opportunity cost of producing the first four pizzas? What is the opportunity cost of producing the 10th pizza. What is the opportunity cost of producing the first 12 CDs? What is the opportunity cost of producing the 26th CD? $$\begin{array} { | l | l | l | l | } 
\hline \begin{array} { l } 
\text { Production } \
\text { point }
\end{array} & \begin{array} { l } 
\text { Milk } \
\text { (gallons) }
\end{array} && \begin{array} { l } 
\text { Shirts } \
\text { (number) }
\end{array} \
\hline A & 0 & \text { and } & 100 \
\hline B & 2 & \text { and } & 90 \
\hline C & 4 & \text { and } & 70 \
\hline D & 6 & \text { and } & 40 \
\hline E & 8 & \text { and } & 0 \
\hline
\end{array}$$

Accepted Answer

@#IMG-DLM& The PPF graph is shown above . The oppo

Question 13

-In the figure above, the marginal cost of the second computer is

Accepted Answer

A)  3 television sets per computer. 
B)  2 television sets per computer. 
C)  5 television sets per computer. 
D)  30 television sets per computer. 
A)  3 television sets per computer. 
B)  2 television sets per computer. 
C)  5 television sets per computer. 
D)  30 television sets per computer.

Question 14

The bowed-outward shape of a PPF

Accepted Answer

A)  is due to the existence of increasing opportunity cost. 
B)  reflects the unequal application of technology in production. 
C)  illustrates the fact that no opportunity cost is incurred for increasing the production of the good measured on the horizontal axis but it is incurred to increase production of the good measured along the vertical axis. 
D)  is due to capital accumulation. 
A)  is due to the existence of increasing opportunity cost. 
B)  reflects the unequal application of technology in production. 
C)  illustrates the fact that no opportunity cost is incurred for increasing the production of the good measured on the horizontal axis but it is incurred to increase production of the good measured along the vertical axis. 
D)  is due to capital accumulation.

Question 15

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

Accepted Answer

A)  the marginal benefit from another bicycle is greater than the marginal cost of another bicycle. 
B)  more bicycles should be produced to reach the allocatively efficient level of output. 
C)  the economy is very efficient at the production of bicycles because the marginal benefit exceeds the marginal cost. 
D)  Both answers A and B are correct. 
A)  the marginal benefit from another bicycle is greater than the marginal cost of another bicycle. 
B)  more bicycles should be produced to reach the allocatively efficient level of output. 
C)  the economy is very efficient at the production of bicycles because the marginal benefit exceeds the marginal cost. 
D)  Both answers A and B are correct.

Question 16

In one day, Sue can change the oil on 20 cars or change the tires on 20 cars. In one day, Fred can change the oil on 20 cars or change the tires on 10 cars. Sue and Fred can gain from trade if Sue changes the_________ and Fred changes the_________ .

Accepted Answer

A)  oil; tires 
B)  tires; oil 
C)  oil; oil 
D)  tires; tires 
A)  oil; tires 
B)  tires; oil 
C)  oil; oil 
D)  tires; tires

Question 17

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

Accepted Answer

A)  a combination of goods and services that cannot be produced efficiently 
B)  all goods and services that are desired but cannot be produced due to scarce resources. 
C)  a point that achieves production efficiency. 
D)  a production point that has underutilization of resources 
A)  a combination of goods and services that cannot be produced efficiently 
B)  all goods and services that are desired but cannot be produced due to scarce resources. 
C)  a point that achieves production efficiency. 
D)  a production point that has underutilization of resources

Question 18

Using a production possibilities frontier, economic growth is illustrated by a

Accepted Answer

A)  rightward shift of the curve. 
B)  point inside the curve. 
C)  movement from one point on the curve to another point on the curve. 
D)  point on the curve. 
A)  rightward shift of the curve. 
B)  point inside the curve. 
C)  movement from one point on the curve to another point on the curve. 
D)  point on the curve.

Question 19

Why is it likely that the United States has an absolute advantage in goods and yet it still ends up importing them from other countries?

Accepted Answer

The United States might have an absolute

Question 20

The opportunity cost of producing one ton of wheat for Country Gamma is 4 tons of corn. The opportunity cost of producing one ton of wheat for Country Beta is 8 tons of corn. Which country has the comparative advantage in the production of wheat?

Accepted Answer

A)  Beta 
B)  Gamma 
C)  Neither country has a comparative advantage. 
D)  Both countries have the comparative advantage. 
A)  Beta 
B)  Gamma 
C)  Neither country has a comparative advantage. 
D)  Both countries have the comparative advantage.

-In the above figure, if 2 million computers are produced per year then the____________ should be produced to achieve the allocatively efficient use of resources

When economists state that the opportunity cost of a product increases as more of it is produced, what do they mean? What is the opportunity cost?

-The country whose production possibilities frontier is illustrated above is currently at position A On the production possibilities frontier. If it wishes to move to position B, it will

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

A computer software program is most strongly an example of

In March a factory used new technology to produce its output. Then in August a fire destroys half the factory. The new technology shifted the factoryʹs PPF and the fire shifted it .

Economic growth is shown on the production possibilities frontier as

Points outside the production possibilities frontier illustrate production points that cannot be attained.

Opportunity cost is illustrated in a production possibilities frontier PPF) by a movement

Tom and Di grow tomatoes and turnips. Tom has a comparative advantage in growing tomatoes if_____________

-In the figure above, the marginal cost of the second computer is

The bowed-outward shape of a PPF

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

In one day, Sue can change the oil on 20 cars or change the tires on 20 cars. In one day, Fred can change the oil on 20 cars or change the tires on 10 cars. Sue and Fred can gain from trade if Sue changes the_ and Fred changes the_ .

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

Using a production possibilities frontier, economic growth is illustrated by a

Why is it likely that the United States has an absolute advantage in goods and yet it still ends up importing them from other countries?

The opportunity cost of producing one ton of wheat for Country Gamma is 4 tons of corn. The opportunity cost of producing one ton of wheat for Country Beta is 8 tons of corn. Which country has the comparative advantage in the production of wheat?

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: the Keynesian Model

U.S Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Review

Filters

Exam 2: The Economic Problem

-In the above figure, if 2 million computers are produced per year then the____________ should be produced to achieve the allocatively efficient use of resources

When economists state that the opportunity cost of a product increases as more of it is produced, what do they mean? What is the opportunity cost?

-The country whose production possibilities frontier is illustrated above is currently at position A On the production possibilities frontier. If it wishes to move to position B, it will

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

A computer software program is most strongly an example of

In March a factory used new technology to produce its output. Then in August a fire destroys half the factory. The new technology shifted the factoryʹs PPF and the fire shifted it .

Economic growth is shown on the production possibilities frontier as

Points outside the production possibilities frontier illustrate production points that cannot be attained.

Opportunity cost is illustrated in a production possibilities frontier PPF) by a movement

Tom and Di grow tomatoes and turnips. Tom has a comparative advantage in growing tomatoes if_____________

-In the figure above, the marginal cost of the second computer is

The bowed-outward shape of a PPF

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

In one day, Sue can change the oil on 20 cars or change the tires on 20 cars. In one day, Fred can change the oil on 20 cars or change the tires on 10 cars. Sue and Fred can gain from trade if Sue changes the_________ and Fred changes the_________ .

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

Using a production possibilities frontier, economic growth is illustrated by a

Why is it likely that the United States has an absolute advantage in goods and yet it still ends up importing them from other countries?

The opportunity cost of producing one ton of wheat for Country Gamma is 4 tons of corn. The opportunity cost of producing one ton of wheat for Country Beta is 8 tons of corn. Which country has the comparative advantage in the production of wheat?

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: the Keynesian Model

U.S Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Review

Filters

In one day, Sue can change the oil on 20 cars or change the tires on 20 cars. In one day, Fred can change the oil on 20 cars or change the tires on 10 cars. Sue and Fred can gain from trade if Sue changes the_ and Fred changes the_ .