Question 1

Property rights facilitate the development of trade.

Accepted Answer

A) True 
 B)False

Question 2

-In the figure above, the curve is known as the

Accepted Answer

A)  substitution options frontier. 
B)  production function. 
C)  opportunity cost curve. 
D)  production possibilities frontier. 
A)  substitution options frontier. 
B)  production function. 
C)  opportunity cost curve. 
D)  production possibilities frontier.

Question 3

In the movie Cast Away, Tom Hanks plays a FedEx efficiency expert stranded on a deserted island. While on the island, he divides his time between catching fish, gathering coconuts, painting, and building a raft. Suppose that these were Mr. Hanksʹ only activities. Did he face an opportunity cost from pursuing any of these activities? Why or why not?

Accepted Answer

Yes, Mr. Hanks faces an opportunity cost

Question 4

The table above gives the production possibilities frontier for a nation that produces wheat and soybeans. Use the information in that table to complete the table below, which has in it the opportunity costs of moving from one production point to another. Do not forget to note the units of the opportunity costs. $$\begin{array} { | l | l | l | l | } 
\hline \begin{array} { l } 
\text { Movement } \
\text { from }
\end{array} & \begin{array} { l } 
\text { Opportunity } \
\text { cost }
\end{array} & \begin{array} { l } 
\text { Movement } \
\text { from }
\end{array} & \begin{array} { l } 
\text { Opportunity } \
\text { cost }
\end{array} \
\hline A \text { to } B & & D \text { to } C & \
\hline B \text { to } C & & C \text { to } B & \
\hline C \text { to } D & & B \text { to } A & \
\hline
\end{array}$$

Accepted Answer

@#IMG-DLM& The table above gives the opp

Question 5

-The above figure illustrates Maryʹs production possibilities frontier. If Mary wants to move from point d to point c, she must

Accepted Answer

A)  give up some of good X in order to obtain more of good Y. 
B)  give up some of good Y in order to obtain more of good X. 
C)  improve technology. 
D)  increase her accumulation of capital. 
A)  give up some of good X in order to obtain more of good Y. 
B)  give up some of good Y in order to obtain more of good X. 
C)  improve technology. 
D)  increase her accumulation of capital.

Question 6

Which of the following describes comparative advantage?

Accepted Answer

A)  Company A can produce 4 boxes of cereal in a day whereas Company B can produce 5 boxes of cereal in a day. 
B)  Firm A can produce a good at a cost of $3 and Firm B can produce the good at a cost of $4. 
C)  Jane can type 50 words per minute and Joe can type 60 words per minute. 
D)  To produce a bushel of wheat Farmer John must give up 2 bushels of corn whereas Farmer Ben must give up 3 bushels of corn. 
A)  Company A can produce 4 boxes of cereal in a day whereas Company B can produce 5 boxes of cereal in a day. 
B)  Firm A can produce a good at a cost of $3 and Firm B can produce the good at a cost of $4. 
C)  Jane can type 50 words per minute and Joe can type 60 words per minute. 
D)  To produce a bushel of wheat Farmer John must give up 2 bushels of corn whereas Farmer Ben must give up 3 bushels of corn.

Question 7

When the production possibilities frontier bows outward from the origin,

Accepted Answer

A)  opportunity costs are decreasing. 
B)  opportunity costs are constant. 
C)  some of societyʹs resources are unemployed. 
D)  opportunity costs are increasing. 
A)  opportunity costs are decreasing. 
B)  opportunity costs are constant. 
C)  some of societyʹs resources are unemployed. 
D)  opportunity costs are increasing.

Question 8

Marginal cost curves slope

Accepted Answer

A)  downward because of decreasing opportunity cost. 
B)  upward because of increasing opportunity cost. 
C)  upward because of decreasing opportunity cost. 
D)  downward because of increasing opportunity cost. 
A)  downward because of decreasing opportunity cost. 
B)  upward because of increasing opportunity cost. 
C)  upward because of decreasing opportunity cost. 
D)  downward because of increasing opportunity cost.

Question 9

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

Accepted Answer

A)  3/5 of a shirt per pair of pants. 
B)  5/3 of a shirt per pair of pants. 
C)  2 shirts per pair of pants. 
D)  3 shirts per pair of pants. 
A)  3/5 of a shirt per pair of pants. 
B)  5/3 of a shirt per pair of pants. 
C)  2 shirts per pair of pants. 
D)  3 shirts per pair of pants.

Question 10

Betty and Ann live on a desert island. With a dayʹs labor, Ann can produce 6 fish or 4 coconuts; Betty can produce 3 fish or 1 coconut. Bettyʹs opportunity cost of producing 1 fish is_____________ , and she should specialize in the production of___________ .

Accepted Answer

A)  2/3 coconut per fish; coconuts 
B)  1 coconut per fish; fish 
C)  1/3 coconut per fish; fish 
D)  4 coconuts per fish; fish 
A)  2/3 coconut per fish; coconuts 
B)  1 coconut per fish; fish 
C)  1/3 coconut per fish; fish 
D)  4 coconuts per fish; fish

Question 11

-In the figure above, moving from production at point d to production at point a requires

Accepted Answer

A)  decreasing the output of consumer goods in order to boost the output of capital goods. 
B)  a decrease in unemployment. 
C)  technological change. 
D)  both capital accumulation and a decrease in unemployment. 
A)  decreasing the output of consumer goods in order to boost the output of capital goods. 
B)  a decrease in unemployment. 
C)  technological change. 
D)  both capital accumulation and a decrease in unemployment.

Question 12

Country A can produce 1 cello by giving up the production of 5 guitars. Country B can produce 1 guitar by giving up the production of 4 cellos. In which good does country A have a comparative advantage?

Accepted Answer

A)  guitars 
B)  cellos 
C)  both goods 
D)  neither good 
A)  guitars 
B)  cellos 
C)  both goods 
D)  neither good

Question 13

-The figure above shows Rogerʹs production possibilities frontier. Point a is an __________point and at that point production is__________ .

Accepted Answer

A)  attainable; inefficient 
B)  unattainable; efficient 
C)  attainable; efficient 
D)  unattainable; inefficient 
A)  attainable; inefficient 
B)  unattainable; efficient 
C)  attainable; efficient 
D)  unattainable; inefficient

Question 14

The most anyone is willing to pay for another purse is $30. Currently the price of a purse is $40, and the cost of producing another purse is $50. The marginal benefit of a purse is

Accepted Answer

A)  $50. 
B)  $30. 
C)  $40. 
D)  an amount not given in the answers above. 
A)  $50. 
B)  $30. 
C)  $40. 
D)  an amount not given in the answers above.

Question 15

Ted can study for his economics exam or go to a concert. He decides to study for his economics exam instead of going to the concert. The concert he will miss is Tedʹs ____________of studying for the exam.

Accepted Answer

A)  implicit cost 
B)  opportunity cost 
C)  explicit cost 
D)  discretionary cost 
A)  implicit cost 
B)  opportunity cost 
C)  explicit cost 
D)  discretionary cost

Question 16

Production possibilities
 $$\begin{array} { | l | l | l | } 
\hline \text { Possibility } & \begin{array} { l } 
\text { Pizza (per } \
\text { hour) }
\end{array} & \begin{array} { l } 
\text { Soda } \
\text { (cases per } \
\text { hour) }
\end{array} \
\hline \text { A } & 0 & 100 \
\hline \text { B } & 1 & 95 \
\hline \text { C } & 2 & 80 \
\hline \text { D } & 3 & 60 \
\hline \text { E } & 4 & 35 \
\hline \text { F } & 5 & 0 \
\hline
\end{array}$$
-In the above table, the production of 3 pizzas and 80 cases of soda is

Accepted Answer

A)  possible only if the economy produces with maximum efficiency. 
B)  feasible but would involve unemployed or misallocated resources. 
C)  impossible unless more resources become available or technology improves. 
D)  possible only if there is inflation. 
A)  possible only if the economy produces with maximum efficiency. 
B)  feasible but would involve unemployed or misallocated resources. 
C)  impossible unless more resources become available or technology improves. 
D)  possible only if there is inflation.

Question 17

Individuals A and B both produce good X. A has a comparative advantage in the production of good X if A

Accepted Answer

A)  can produce more units of X in a given time period than can B. 
B)  has a lower opportunity cost of producing good X than has B. 
C)  can produce X using newer technology than can B. 
D)  has a lower opportunity cost of producing good X than of producing good Y. 
A)  can produce more units of X in a given time period than can B. 
B)  has a lower opportunity cost of producing good X than has B. 
C)  can produce X using newer technology than can B. 
D)  has a lower opportunity cost of producing good X than of producing good Y.

Question 18

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

Accepted Answer

The statement is false. It is false on t

Question 19

When a nation is producing the allocatively efficient quantity of a product, the marginal benefit of producing the good equals the marginal cost of producing that good.

Accepted Answer

A) True 
 B)False

Question 20

When producing goods and services along a PPF, tradeoffs exist because

Accepted Answer

A)  buyers and sellers often must negotiate prices. 
B)  not all production is efficient. 
C)  human wants and needs are limited at a particular point in time. 
D)  society has only a limited amount of productive resources. 
A)  buyers and sellers often must negotiate prices. 
B)  not all production is efficient. 
C)  human wants and needs are limited at a particular point in time. 
D)  society has only a limited amount of productive resources.

Property rights facilitate the development of trade.

-In the figure above, the curve is known as the

-The above figure illustrates Maryʹs production possibilities frontier. If Mary wants to move from point d to point c, she must

Which of the following describes comparative advantage?

When the production possibilities frontier bows outward from the origin,

Marginal cost curves slope

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

Betty and Ann live on a desert island. With a dayʹs labor, Ann can produce 6 fish or 4 coconuts; Betty can produce 3 fish or 1 coconut. Bettyʹs opportunity cost of producing 1 fish is___ , and she should specialize in the production of_ .

-In the figure above, moving from production at point d to production at point a requires

Country A can produce 1 cello by giving up the production of 5 guitars. Country B can produce 1 guitar by giving up the production of 4 cellos. In which good does country A have a comparative advantage?

-The figure above shows Rogerʹs production possibilities frontier. Point a is an point and at that point production is .

The most anyone is willing to pay for another purse is $30. Currently the price of a purse is $40, and the cost of producing another purse is $50. The marginal benefit of a purse is

Ted can study for his economics exam or go to a concert. He decides to study for his economics exam instead of going to the concert. The concert he will miss is Tedʹs ____________of studying for the exam.

Production possibilities Possibility Pizza (per hour) Soda (cases per hour) A 0 100 B 1 95 C 2 80 D 3 60 E 4 35 F 5 0 -In the above table, the production of 3 pizzas and 80 cases of soda is

Individuals A and B both produce good X. A has a comparative advantage in the production of good X if A

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

When a nation is producing the allocatively efficient quantity of a product, the marginal benefit of producing the good equals the marginal cost of producing that good.

When producing goods and services along a PPF, tradeoffs exist because

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

Property rights facilitate the development of trade.

-In the figure above, the curve is known as the

-The above figure illustrates Maryʹs production possibilities frontier. If Mary wants to move from point d to point c, she must

Which of the following describes comparative advantage?

When the production possibilities frontier bows outward from the origin,

Marginal cost curves slope

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

Betty and Ann live on a desert island. With a dayʹs labor, Ann can produce 6 fish or 4 coconuts; Betty can produce 3 fish or 1 coconut. Bettyʹs opportunity cost of producing 1 fish is_____________ , and she should specialize in the production of___________ .

-In the figure above, moving from production at point d to production at point a requires

Country A can produce 1 cello by giving up the production of 5 guitars. Country B can produce 1 guitar by giving up the production of 4 cellos. In which good does country A have a comparative advantage?

-The figure above shows Rogerʹs production possibilities frontier. Point a is an __________point and at that point production is__________ .

The most anyone is willing to pay for another purse is $30. Currently the price of a purse is $40, and the cost of producing another purse is $50. The marginal benefit of a purse is

Ted can study for his economics exam or go to a concert. He decides to study for his economics exam instead of going to the concert. The concert he will miss is Tedʹs ____________of studying for the exam.

Production possibilities Possibility Pizza (per hour) Soda (cases per hour) A 0 100 B 1 95 C 2 80 D 3 60 E 4 35 F 5 0 -In the above table, the production of 3 pizzas and 80 cases of soda is

Individuals A and B both produce good X. A has a comparative advantage in the production of good X if A

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

When a nation is producing the allocatively efficient quantity of a product, the marginal benefit of producing the good equals the marginal cost of producing that good.

When producing goods and services along a PPF, tradeoffs exist because

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

Betty and Ann live on a desert island. With a dayʹs labor, Ann can produce 6 fish or 4 coconuts; Betty can produce 3 fish or 1 coconut. Bettyʹs opportunity cost of producing 1 fish is___ , and she should specialize in the production of_ .

-The figure above shows Rogerʹs production possibilities frontier. Point a is an point and at that point production is .