Question 1

If production point is inside the production possibilities frontier

Accepted Answer

A)  production is inefficient. 
B)  production is in the ʺunattainableʺ region. 
C)  it is not possible to produce more of both goods 
D)  in order to produce more of one good, less of the other must be produced. 
A)  production is inefficient. 
B)  production is in the ʺunattainableʺ region. 
C)  it is not possible to produce more of both goods 
D)  in order to produce more of one good, less of the other must be produced.

Question 2

Explain why the production possibilities frontier bows outward.

Accepted Answer

The bowed outward PPF reflects increasin

Question 3

An opportunity cost of economic growth is

Accepted Answer

A)  so high that places such as Hong Kong have had to do without it. 
B)  essentially zero because economic growth leads to such large gains in the long run. 
C)  decreased by the creation of capital goods rather than consumption goods. 
D)  the decrease in production of consumption goods in the present time period. 
A)  so high that places such as Hong Kong have had to do without it. 
B)  essentially zero because economic growth leads to such large gains in the long run. 
C)  decreased by the creation of capital goods rather than consumption goods. 
D)  the decrease in production of consumption goods in the present time period.

Question 4

When economic growth occurs, the

Accepted Answer

A)  economy moves along its production possibilities frontier 
B)  production possibilities frontier becomes steeper 
C)  production possibilities frontier shifts outward 
D)  production possibilities frontier shifts outward but no longer limits the amount that can be produced. 
A)  economy moves along its production possibilities frontier 
B)  production possibilities frontier becomes steeper 
C)  production possibilities frontier shifts outward 
D)  production possibilities frontier shifts outward but no longer limits the amount that can be produced.

Question 5

According to the principle of comparative advantage, if a rich country trades with a poor country, then

Accepted Answer

A)  the rich country will benefit and the poor country will lose. 
B)  the rich country will lose and the poor country will benefit. 
C)  both countries will benefit. 
D)  neither of the countries will benefit. 
A)  the rich country will benefit and the poor country will lose. 
B)  the rich country will lose and the poor country will benefit. 
C)  both countries will benefit. 
D)  neither of the countries will benefit.

Question 6

A society that is producing on its production possibilities frontier is

Accepted Answer

A)  not utilizing all of its resources. 
B)  producing too much output. 
C)  fully utilizing all of its productive resources. 
D)  not being technologically efficient. 
A)  not utilizing all of its resources. 
B)  producing too much output. 
C)  fully utilizing all of its productive resources. 
D)  not being technologically efficient.

Question 7

Economic growth

Accepted Answer

A)  creates unemployment. 
B)  makes it more difficult for a nation to produce on its PPF. 
C)  shifts the PPF outward. 
D)  has no opportunity cost. 
A)  creates unemployment. 
B)  makes it more difficult for a nation to produce on its PPF. 
C)  shifts the PPF outward. 
D)  has no opportunity cost.

Question 8

Generally, opportunity costs increase and the production possibilities frontier bows outward. Why?

Accepted Answer

A)  Labor is scarcer than capital. 
B)  Resources are not equally useful in all activities. 
C)  Unemployment is inevitable. 
D)  Technology is slow to change. 
A)  Labor is scarcer than capital. 
B)  Resources are not equally useful in all activities. 
C)  Unemployment is inevitable. 
D)  Technology is slow to change.

Question 9

The production possibilities frontier bows outward because

Accepted Answer

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

Question 10

$$\begin{array} { | l | l | l | } 
\hline \text { Point } & \begin{array} { l } 
\text { Production of } \
X
\end{array} & \begin{array} { l } 
\text { Production of } \
Y
\end{array} \
\hline \text { A } & 0 & 40 \
\hline B & 3 & 36 \
\hline \text { C } & 6 & 28 \
\hline \text { D } & 9 & 16 \
\hline \text { E } & 12 & 0 \
\hline
\end{array}$$
-The above table shows production combinations on a country?s production possibilities frontier. The opportunity cost of increasing the production of Y from 16 to 28 units is units of good X per unit of good Y.

Accepted Answer

A)  12 
B)  3 
C)  6 
D)  There is no opportunity cost when moving from one point to another along a production possibilities frontier so none of the above answers is correct. 
A)  12 
B)  3 
C)  6 
D)  There is no opportunity cost when moving from one point to another along a production possibilities frontier so none of the above answers is correct.

Question 11

Marginal benefit curves slope

Accepted Answer

A)  downward because of increasing opportunity cost. 
B)  upward because of increasing opportunity cost. 
C)  downward, but not because of increasing opportunity cost. 
D)  upward, but not because of increasing opportunity cost. 
A)  downward because of increasing opportunity cost. 
B)  upward because of increasing opportunity cost. 
C)  downward, but not because of increasing opportunity cost. 
D)  upward, but not because of increasing opportunity cost.

Question 12

Production points inside the production possibilities frontier

Accepted Answer

A)  are attainable only with the full utilization of all resources. 
B)  result in more rapid growth. 
C)  are associated with unused or misallocated resources. 
D)  are unattainable. 
A)  are attainable only with the full utilization of all resources. 
B)  result in more rapid growth. 
C)  are associated with unused or misallocated resources. 
D)  are unattainable.

Question 13

Over the past several decades, the United States has devoted a greater fraction of its resources to consumption than Hong Kong, which is why the U.S. economy grew faster than Hong Kongʹs economy.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

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

Question 15

Individual economic decisions are coordinated by

Accepted Answer

A)  markets through adjustments in sales levels. 
B)  government through adjustments in sales taxes. 
C)  markets through adjustments in prices. 
D)  government through adjustments in income taxes. 
A)  markets through adjustments in sales levels. 
B)  government through adjustments in sales taxes. 
C)  markets through adjustments in prices. 
D)  government through adjustments in income taxes.

Question 16

Blue Violet's$\quad$$\quad$$\quad$  Orange Rose's production possibilities production possibilities
$\begin{array}{|llll|}
\hline \begin{array}{l}
\text { Teapots } \
\text { (number }
\end{array} & \begin{array}{l}
\text { Coffee pots } \
\text { (number }
\end{array} & \begin{array}{l}
\text { Teapots } \
\text { (number }
\end{array}& \begin{array}{l}
\text { Coffee pots } \
\text { (number }
\end{array} \
\text { perweek) } & \text { perweek) } & \text { perweek) }& \text { perweek) }\
\hline 150&\&0&75&\&75\
\hline 100&\&25&50&\&50\
\hline 50&\&50&25&\&100\
\hline 0&\&75&0&\&150\
\hline 
\end{array}$

-Two countries, Blue Violet and Orange Rose, produce only two goods: teapots and coffeepots. The table above gives their production possibilities._____________ has a comparative advantage in teapots and _________has a comparative advantage in coffeepots.

Accepted Answer

A)  Orange Rose; Blue Violet 
B)  Orange Rose; Orange Rose 
C)  Blue Violet; Blue Violet 
D)  Blue Violet; Orange Rose 
A)  Orange Rose; Blue Violet 
B)  Orange Rose; Orange Rose 
C)  Blue Violet; Blue Violet 
D)  Blue Violet; Orange Rose

Question 17

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 opportunity cost of the 2nd pizza is

Accepted Answer

A)  0 cases of soda per pizza. 
B)  80 cases of soda per pizza. 
C)  95 cases of soda per pizza. 
D)  15 cases of soda per pizza. 
A)  0 cases of soda per pizza. 
B)  80 cases of soda per pizza. 
C)  95 cases of soda per pizza. 
D)  15 cases of soda per pizza.

Question 18

Resource use is allocatively efficient

Accepted Answer

A)  whenever marginal cost exceeds marginal benefit. 
B)  whenever marginal benefit exceeds marginal cost. 
C)  when marginal benefit equals marginal cost. 
D)  when the maximum possible quantity is being produced. 
A)  whenever marginal cost exceeds marginal benefit. 
B)  whenever marginal benefit exceeds marginal cost. 
C)  when marginal benefit equals marginal cost. 
D)  when the maximum possible quantity is being produced.

Question 19

Two nations can produce computers and software in the amounts given in the table above. Does either nation have an absolute advantage in producing the products? Which nation has a comparative advantage in computers? Which nation has a comparative advantage in software? Explain your answers.

Accepted Answer

Nation B has an absolute advantage in pr

Question 20

Two social institutions that are essential for trade to be organized are___________ .

Accepted Answer

A)  markets and banks 
B)  businesses and banks 
C)  markets and property rights 
D)  property rights and laws 
A)  markets and banks 
B)  businesses and banks 
C)  markets and property rights 
D)  property rights and laws

If production point is inside the production possibilities frontier

Explain why the production possibilities frontier bows outward.

An opportunity cost of economic growth is

When economic growth occurs, the

According to the principle of comparative advantage, if a rich country trades with a poor country, then

A society that is producing on its production possibilities frontier is

Economic growth

Generally, opportunity costs increase and the production possibilities frontier bows outward. Why?

The production possibilities frontier bows outward because

Point Production of X Production of Y A 0 40 B 3 36 C 6 28 D 9 16 E 12 0 -The above table shows production combinations on a country?s production possibilities frontier. The opportunity cost of increasing the production of Y from 16 to 28 units is units of good X per unit of good Y.

Marginal benefit curves slope

Production points inside the production possibilities frontier

Over the past several decades, the United States has devoted a greater fraction of its resources to consumption than Hong Kong, which is why the U.S. economy grew faster than Hong Kongʹs economy.

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

Individual economic decisions are coordinated by

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 opportunity cost of the 2nd pizza is

Resource use is allocatively efficient

Two nations can produce computers and software in the amounts given in the table above. Does either nation have an absolute advantage in producing the products? Which nation has a comparative advantage in computers? Which nation has a comparative advantage in software? Explain your answers.

Two social institutions that are essential for trade to be organized are___________ .

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

If production point is inside the production possibilities frontier

Explain why the production possibilities frontier bows outward.

An opportunity cost of economic growth is

When economic growth occurs, the

According to the principle of comparative advantage, if a rich country trades with a poor country, then

A society that is producing on its production possibilities frontier is

Economic growth

Generally, opportunity costs increase and the production possibilities frontier bows outward. Why?

The production possibilities frontier bows outward because

Point Production of X Production of Y A 0 40 B 3 36 C 6 28 D 9 16 E 12 0 -The above table shows production combinations on a country?s production possibilities frontier. The opportunity cost of increasing the production of Y from 16 to 28 units is units of good X per unit of good Y.

Marginal benefit curves slope

Production points inside the production possibilities frontier

Over the past several decades, the United States has devoted a greater fraction of its resources to consumption than Hong Kong, which is why the U.S. economy grew faster than Hong Kongʹs economy.

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

Individual economic decisions are coordinated by

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 opportunity cost of the 2nd pizza is

Resource use is allocatively efficient

Two nations can produce computers and software in the amounts given in the table above. Does either nation have an absolute advantage in producing the products? Which nation has a comparative advantage in computers? Which nation has a comparative advantage in software? Explain your answers.

Two social institutions that are essential for trade to be organized are___________ .

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