Question 1

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

Accepted Answer

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

Question 2

Resource use is allocatively efficient when

Accepted Answer

A)  we produce the amount of the different goods we value most highly. 
B)  we produce the goods with the highest opportunity cost. 
C)  we produce the goods with the lowest opportunity cost. 
D)  we cannot produce more goods and services. 
A)  we produce the amount of the different goods we value most highly. 
B)  we produce the goods with the highest opportunity cost. 
C)  we produce the goods with the lowest opportunity cost. 
D)  we cannot produce more goods and services.

Question 3

Betty and Ann live on a desert island. With a dayʹs labor, Ann can produce 8 fish or 4 coconuts; Betty can produce 6 fish or 2 coconuts. Annʹs opportunity cost of producing 1 coconut is and she should specialize in the production of_____________.

Accepted Answer

A)  2 fish per coconut; coconuts 
B)  6 fish per coconut; coconuts 
C)  0 fish per coconut; coconuts 
D)  8 fish per coconut; fish 
A)  2 fish per coconut; coconuts 
B)  6 fish per coconut; coconuts 
C)  0 fish per coconut; coconuts 
D)  8 fish per coconut; fish

Question 4

Tom takes 20 minutes to cook an egg and 5 minutes to make a sandwich. Jerry takes 15 minutes to cook an egg and 3 minutes to make a sandwich. If Tom and Jerry trade

Accepted Answer

A)  Tom will benefit and Jerry will not. 
B)  Jerry will benefit and Tom will not. 
C)  both will benefit. 
D)  none of them will benefit. 
A)  Tom will benefit and Jerry will not. 
B)  Jerry will benefit and Tom will not. 
C)  both will benefit. 
D)  none of them will benefit.

Question 5

The PPF shifts if

Accepted Answer

A)  people decide they want more of one good and less of another. 
B)  the prices of the goods and services produced rise. 
C)  the resources available to the nation change. 
D)  the unemployment rate falls. 
A)  people decide they want more of one good and less of another. 
B)  the prices of the goods and services produced rise. 
C)  the resources available to the nation change. 
D)  the unemployment rate falls.

Question 6

Claire and Dag are farmers who produce beef and corn. In a year, Claire can produce 16 tons of beef or 40 bushels of corn, while Dag can produce 5 tons of beef or 25 bushels of corn. The opportunity cost of producing a ton of beef is

Accepted Answer

A)  20 bushels of corn for Dag and 50 bushels of corn for Claire. 
B)  36.5 days for Dag and 45.6 days for Claire. 
C)  10 bushels of corn for Dag and 8 bushels of corn for Claire. 
D)  5 bushels of corn for Dag and 2.5 bushels of corn for Claire. 
A)  20 bushels of corn for Dag and 50 bushels of corn for Claire. 
B)  36.5 days for Dag and 45.6 days for Claire. 
C)  10 bushels of corn for Dag and 8 bushels of corn for Claire. 
D)  5 bushels of corn for Dag and 2.5 bushels of corn for Claire.

Question 7

In markets, peopleʹs decisions are coordinated by

Accepted Answer

A)  learning-by-doing. 
B)  adjustments in prices. 
C)  specialization according to absolute advantage. 
D)  changes in property rights. 
A)  learning-by-doing. 
B)  adjustments in prices. 
C)  specialization according to absolute advantage. 
D)  changes in property rights.

Question 8

-The figure above illustrates that if this country wishes to have F2 - F1 additional food by moving from point A to point B, it will

Accepted Answer

A)  have to sacrifice C1 - C2 clothing in order to free the resources necessary to produce the additional food. 
B)  have to find additional workers, because the country already is operating on its production possibilities frontier. 
C)  be unable to do so until additional technological progress is made. 
D)  require that all the unemployed resources in the country be put to work. 
A)  have to sacrifice C1 - C2 clothing in order to free the resources necessary to produce the additional food. 
B)  have to find additional workers, because the country already is operating on its production possibilities frontier. 
C)  be unable to do so until additional technological progress is made. 
D)  require that all the unemployed resources in the country be put to work.

Question 9

Mary takes 4 minutes to make a sandwich and 6 minutes to mix a cocktail. Her sister Ash takes 4 minutes to make a sandwich and 4 minutes to mix a cocktail. Calculate each sisterʹs opportunity cost. Which of the two sisters has an absolute advantage in making sandwiches? In mixing cocktails? Which of the two has a comparative advantage in making sandwiches? In mixing cocktails? $$\begin{array} { | l l | l l | } 
\hline \begin{array} { l } 
\text { Nation A's production } \
\text { in 1 day }
\end{array} && { \begin{array} { l } 
\text { Nation B's production } \
\text { in 1 day }
\end{array} } \
\hline \text { Computers } & 100 & \text { Computers } & 120 \
\text { Software } & 140 & \text { Software } & 150 \
\hline
\end{array}$$

Accepted Answer

Mary can spend an hour to make 15 sandwi

Question 10

We measure the marginal________of a good by what a ________for another unit of the good.

Accepted Answer

A)  cost; person is willing to pay 
B)  cost; personʹs preferences are 
C)  benefit; person is willing to pay 
D)  benefit; person must pay 
A)  cost; person is willing to pay 
B)  cost; personʹs preferences are 
C)  benefit; person is willing to pay 
D)  benefit; person must pay

Question 11

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

Accepted Answer

A)  Mac and Izzie should both produce at point a. 
B)  Mac and Izzie should both produce at point c. 
C)  Mac should produce at point b and Izzie should produce at point d. 
D)  Mac should produce at point d and Izzie should produce at point b. 
A)  Mac and Izzie should both produce at point a. 
B)  Mac and Izzie should both produce at point c. 
C)  Mac should produce at point b and Izzie should produce at point d. 
D)  Mac should produce at point d and Izzie should produce at point b.

Question 12

A country has a comparative advantage in the production of a good if its opportunity cost is lower compared to another country.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A)  Izzie produces outside her production possibilities frontier. 
B)  Mac produces outside his production possibilities frontier. 
C)  neither Mac nor Izzie produce outside their production possibilities frontiers. 
D)  Mac and Izzie both produce outside their production possibilities frontiers. 
A)  Izzie produces outside her production possibilities frontier. 
B)  Mac produces outside his production possibilities frontier. 
C)  neither Mac nor Izzie produce outside their production possibilities frontiers. 
D)  Mac and Izzie both produce outside their production possibilities frontiers.

Question 14

$\quad\quad\quad\quad\text { Country A }$$\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { Country B }$
$\begin{array}{|l|l|l|l|}
\hline \begin{array}{l}
\text { Good } X \
(\text { units of } X)
\end{array} & \begin{array}{l}
\text { Good } Y \
(\text { units of } Y)
\end{array} & \begin{array}{l}
\text { Good } X \
\text { (units of } X)
\end{array} & \begin{array}{l}
\text { Good } Y \
(\text { units of } Y)
\end{array} \\hline 0 & 16 & 0 & 12 \
\hline 2 & 12 & 2 & 9 \
\hline 4 & 8 & 4 & 6 \
\hline 6 & 4 & 6 & 3 \
\hline 8 & 0 & 8 & 0 \
\hline
\end{array}$
-In the table above, country A is producing 4 units of X and 8 units of Y and country B is producing 4 units of X and 6 units of Y. The opportunity cost of producing more of

Accepted Answer

A)  good X is lower in country A. 
B)  good Y is the same for both countries. 
C)  good X is the same for both countries. 
D)  good Y is lower in country A. 
A)  good X is lower in country A. 
B)  good Y is the same for both countries. 
C)  good X is the same for both countries. 
D)  good Y is lower in country A.

Question 15

In an eight-hour day, Andy can produce either 24 loaves of bread or 8 pounds of butter. In an eight-hour day, Bob can produce either 8 loaves of bread or 8 pounds of butter. Andy has a comparative advantage in the production of

Accepted Answer

A)  bread, while Bob has a comparative advantage in the production of butter. 
B)  bread and neither has a comparative advantage in the production of butter. 
C)  butter, while Bob has a comparative advantage in the production of bread. 
D)  both bread and butter. 
A)  bread, while Bob has a comparative advantage in the production of butter. 
B)  bread and neither has a comparative advantage in the production of butter. 
C)  butter, while Bob has a comparative advantage in the production of bread. 
D)  both bread and butter.

Question 16

Are all points inside the production possibilities frontier unattainable?

Accepted Answer

No, all points within the prod

Question 17

$$\begin{array} { | l | l | } 
\hline \begin{array} { l } 
\text { Television } \
\text { sets } \
\text { (millions } \
\text { per year) }
\end{array} & \begin{array} { l } 
\text { Willingness to } \
\text { pay } \
\text { (computers } \
\text { per television } \
\text { set) }
\end{array} \
\hline 1 & 2.5 \
\hline 2 & 2.0 \
\hline 3 & 1.5 \
\hline 4 & 1.0 \
\hline 5 & 0.5 \
\hline
\end{array}$$
-In the table above, the marginal benefit of the 4 millionth television set is

Accepted Answer

A)  1.0 computer per television set. 
B)  0.25 computers per television set. 
C)  0.5 computers per television set. 
D)  negative 0.5 computers per television set. 
A)  1.0 computer per television set. 
B)  0.25 computers per television set. 
C)  0.5 computers per television set. 
D)  negative 0.5 computers per television set.

Question 18

As a person consumes more of a good, the

Accepted Answer

A)  marginal benefit decreases. 
B)  marginal benefit increases or decreases depending whether or not the economy is on the PPF 
C)  marginal benefit increases. 
D)  price of the good falls. 
A)  marginal benefit decreases. 
B)  marginal benefit increases or decreases depending whether or not the economy is on the PPF 
C)  marginal benefit increases. 
D)  price of the good falls.

Question 19

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. Germany wishes to purchase computers from the United States in exchange for cameras. What is the maximum number of cameras per computer that Germany would be willing to pay the United States?

Accepted Answer

A)  20 cameras per computer 
B)  2 cameras per computer 
C)  1 camera per computer 
D)  10 cameras per computer 
A)  20 cameras per computer 
B)  2 cameras per computer 
C)  1 camera per computer 
D)  10 cameras per computer

Question 20

$$\begin{array} { | l | c | c | } 
\hline & \begin{array} { c } 
\text { U.S. production } \
\text { possibilities }
\end{array} & \begin{array} { l } 
\text { France's production } \
\text { possibilities }
\end{array} \
\hline \text { Steel } & 100 & 25 \
\hline \text { Concrete } & 200 & 100 \
\hline
\end{array}$$
-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.

Accepted Answer

A)  Brenda cannot gain from trade. 
B)  Brenda has an absolute advantage in the production of X and Y. 
C)  Agnes has a comparative advantage in the production of Y. 
D)  Brenda has a comparative advantage in the production of X. 
A)  Brenda cannot gain from trade. 
B)  Brenda has an absolute advantage in the production of X and Y. 
C)  Agnes has a comparative advantage in the production of Y. 
D)  Brenda has a comparative advantage in the production of X.

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

Resource use is allocatively efficient when

Betty and Ann live on a desert island. With a dayʹs labor, Ann can produce 8 fish or 4 coconuts; Betty can produce 6 fish or 2 coconuts. Annʹs opportunity cost of producing 1 coconut is and she should specialize in the production of_____________.

Tom takes 20 minutes to cook an egg and 5 minutes to make a sandwich. Jerry takes 15 minutes to cook an egg and 3 minutes to make a sandwich. If Tom and Jerry trade

The PPF shifts if

Claire and Dag are farmers who produce beef and corn. In a year, Claire can produce 16 tons of beef or 40 bushels of corn, while Dag can produce 5 tons of beef or 25 bushels of corn. The opportunity cost of producing a ton of beef is

In markets, peopleʹs decisions are coordinated by

-The figure above illustrates that if this country wishes to have F₂- F₁additional food by moving from point A to point B, it will

We measure the marginalof a good by what a for another unit of the good.

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

A country has a comparative advantage in the production of a good if its opportunity cost is lower compared to another country.

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

In an eight-hour day, Andy can produce either 24 loaves of bread or 8 pounds of butter. In an eight-hour day, Bob can produce either 8 loaves of bread or 8 pounds of butter. Andy has a comparative advantage in the production of

Are all points inside the production possibilities frontier unattainable?

Television sets (millions per year) Willingness to pay (computers per television set) 1 2.5 2 2.0 3 1.5 4 1.0 5 0.5 -In the table above, the marginal benefit of the 4 millionth television set is

As a person consumes more of a good, the

U.S. production possibilities France's production possibilities Steel 100 25 Concrete 200 100 -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.

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

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

Resource use is allocatively efficient when

Betty and Ann live on a desert island. With a dayʹs labor, Ann can produce 8 fish or 4 coconuts; Betty can produce 6 fish or 2 coconuts. Annʹs opportunity cost of producing 1 coconut is and she should specialize in the production of_____________.

Tom takes 20 minutes to cook an egg and 5 minutes to make a sandwich. Jerry takes 15 minutes to cook an egg and 3 minutes to make a sandwich. If Tom and Jerry trade

The PPF shifts if

Claire and Dag are farmers who produce beef and corn. In a year, Claire can produce 16 tons of beef or 40 bushels of corn, while Dag can produce 5 tons of beef or 25 bushels of corn. The opportunity cost of producing a ton of beef is

In markets, peopleʹs decisions are coordinated by

-The figure above illustrates that if this country wishes to have F2 - F1 additional food by moving from point A to point B, it will

We measure the marginal________of a good by what a ________for another unit of the good.

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

A country has a comparative advantage in the production of a good if its opportunity cost is lower compared to another country.

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

In an eight-hour day, Andy can produce either 24 loaves of bread or 8 pounds of butter. In an eight-hour day, Bob can produce either 8 loaves of bread or 8 pounds of butter. Andy has a comparative advantage in the production of

Are all points inside the production possibilities frontier unattainable?

Television sets (millions per year) Willingness to pay (computers per television set) 1 2.5 2 2.0 3 1.5 4 1.0 5 0.5 -In the table above, the marginal benefit of the 4 millionth television set is

As a person consumes more of a good, the

U.S. production possibilities France's production possibilities Steel 100 25 Concrete 200 100 -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.

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

-The figure above illustrates that if this country wishes to have F₂- F₁additional food by moving from point A to point B, it will

We measure the marginalof a good by what a for another unit of the good.