Question 1

Suppose a scientific breakthrough made free solar power available in unlimited quantities in the United States. The effect of this invention would be to move the

Accepted Answer

A)  U.S. production possibilities frontier inward. 
B)  U.S. production possibilities frontier outward. 
C)  United States inside its production possibilities frontier. 
D)  United States beyond its production possibilities frontier. 
A)  U.S. production possibilities frontier inward. 
B)  U.S. production possibilities frontier outward. 
C)  United States inside its production possibilities frontier. 
D)  United States beyond its production possibilities frontier.

Question 2

When the opportunity cost of producing more of a good is increasing, the marginal cost of producing more of the good is

Accepted Answer

A)  decreasing. 
B)  increasing. 
C)  constant. 
D)  More information is needed to answer the question. 
A)  decreasing. 
B)  increasing. 
C)  constant. 
D)  More information is needed to answer the question.

Question 3

Resource use is allocatively efficient when marginal benefit is

Accepted Answer

A)  equal to marginal cost. 
B)  greater than marginal cost. 
C)  less than marginal cost. 
D)  at its maximum value. 
A)  equal to marginal cost. 
B)  greater than marginal cost. 
C)  less than marginal cost. 
D)  at its maximum value.

Question 4

$$\begin{array} { | l | l | l | } 
\hline \text { Point } & \begin{array} { l } 
\text { Production of } \
X
\end{array} & \begin{array} { l } 
\text { Production of } \
Y
\end{array} \
\hline \text { A } & 0 & 40 \
\hline B & 3 & 36 \
\hline \text { C } & 6 & 28 \
\hline \text { D } & 9 & 16 \
\hline \text { E } & 12 & 0 \
\hline
\end{array}$$
-The above table shows production combinations on a country?s production possibilities frontier. Which of the following points signifies efficient production?

Accepted Answer

A)  3 units of good X and 25 units of good Y 
B)  0 units of good X and 40 units of good Y 
C)  10 units of good X and 16 units of good Y 
D)  12 units of good X and 1 unit of good Y 
A)  3 units of good X and 25 units of good Y 
B)  0 units of good X and 40 units of good Y 
C)  10 units of good X and 16 units of good Y 
D)  12 units of good X and 1 unit of good Y

Question 5

Explain the connection between opportunity cost and the PPF.

Accepted Answer

When moving along the production possibi

Question 6

Marginal benefit curves slope and marginal cost curves slope .

Accepted Answer

A)  downward; downward 
B)  upward; upward 
C)  downward; upward 
D)  upward; downward 
A)  downward; downward 
B)  upward; upward 
C)  downward; upward 
D)  upward; downward

Question 7

Because of the existence of comparative advantage, the total output of goods is higher when each producer

Accepted Answer

A)  produces at the midpoint of its PPF. 
B)  produces many different goods. 
C)  specializes in the production of one good or a few goods. 
D)  makes both intermediate and final goods. 
A)  produces at the midpoint of its PPF. 
B)  produces many different goods. 
C)  specializes in the production of one good or a few goods. 
D)  makes both intermediate and final goods.

Question 8

Which of the following is TRUE regarding marginal benefit?
I. The marginal benefit curve shows the benefit firms receive by producing another unit of a good.
II. Marginal benefit increases as more of a good is consumed.

Accepted Answer

A)  I and II 
B)  II only 
C)  I only 
D)  neither I nor II 
A)  I and II 
B)  II only 
C)  I only 
D)  neither I nor II

Question 9

What economic concepts are represented in the production possibilities model?

Accepted Answer

There are a large number of economic con

Question 10

The production possibilities frontier itself shows

Accepted Answer

A)  the maximum rate of growth of output possible for an economy. 
B)  combinations of goods and services that do not fully use available resources. 
C)  the maximum amount of resources available at any given time. 
D)  the maximum levels of production that can be attained. 
A)  the maximum rate of growth of output possible for an economy. 
B)  combinations of goods and services that do not fully use available resources. 
C)  the maximum amount of resources available at any given time. 
D)  the maximum levels of production that can be attained.

Question 11

How do property rights help organize production and trade?

Accepted Answer

Property rights are necessary in order f

Question 12

-In one day, Brandon can either plow 10 acres or plant 20 acres. In one day, Christopher can either plow 14 acres or plant 14 acres. Brandon and Christopher can

Accepted Answer

A)  gain from exchange if Brandon specializes in planting and Christopher specializes in plowing. 
B)  exchange, but only Christopher will gain from the exchange. 
C)  exchange, but only Brandon will gain from the exchange. 
D)  gain from exchange if Brandon specializes in plowing and Christopher specializes in planting. 
A)  gain from exchange if Brandon specializes in planting and Christopher specializes in plowing. 
B)  exchange, but only Christopher will gain from the exchange. 
C)  exchange, but only Brandon will gain from the exchange. 
D)  gain from exchange if Brandon specializes in plowing and Christopher specializes in planting.

Question 13

When producing at a production efficient point,____________  .

Accepted Answer

A)  we face a tradeoff and incur an opportunity cost 
B)  we can satisfy our all wants 
C)  the opportunity cost of another good is zero 
D)  our choice of the goods can be either on or within the production possibilities frontier 
A)  we face a tradeoff and incur an opportunity cost 
B)  we can satisfy our all wants 
C)  the opportunity cost of another good is zero 
D)  our choice of the goods can be either on or within the production possibilities frontier

Question 14

-The figure above shows Fredaʹs PPF. Freda currently produces 10 packets of fudge and no cookies. If Freda decides to produce 1 packet of cookies, her opportunity cost of the packet of cookies is____________of fudge.

Accepted Answer

A)  1/2 packet 
B)  0 packets 
C)  1 packet 
D)  2 packets 
A)  1/2 packet 
B)  0 packets 
C)  1 packet 
D)  2 packets

Question 15

The opportunity cost of economic growth is

Accepted Answer

A)  future consumption that a nation gives up to consume more today 
B)  future consumption that a nation gets if it gives up some present consumption. 
C)  present investment that a nation gives up to increase its economic growth. 
D)  present consumption that a nation gives up to accumulate capital 
A)  future consumption that a nation gives up to consume more today 
B)  future consumption that a nation gets if it gives up some present consumption. 
C)  present investment that a nation gives up to increase its economic growth. 
D)  present consumption that a nation gives up to accumulate capital

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 Sweet Pansy, produce only two goods: teapots and coffeepots. The table above gives their production possibilities. With specialization and trade, Sweet Pansy produces ___________and Blue Violet produces__________ .

Accepted Answer

A)  150 teapots, 75 coffeepots 
B)  100 teapots and 25 coffeepots, 100 teapots and 50 coffeepots 
C)  150 teapots and 150 coffeepots, nothing 
D)  150 coffeepots, 150 teapots 
A)  150 teapots, 75 coffeepots 
B)  100 teapots and 25 coffeepots, 100 teapots and 50 coffeepots 
C)  150 teapots and 150 coffeepots, nothing 
D)  150 coffeepots, 150 teapots

Question 17

A country produces only pencils and erasers. Pencil production is allocatively efficient if the marginal ________of a pencil equals the marginal________ of ________.

Accepted Answer

A)  benefit; cost; a pencil 
B)  cost; benefit; an eraser 
C)  benefit; benefit; an eraser 
D)  cost; cost; an eraser 
A)  benefit; cost; a pencil 
B)  cost; benefit; an eraser 
C)  benefit; benefit; an eraser 
D)  cost; cost; an eraser

Question 18

The term ʺmarketʺ refers to

Accepted Answer

A)  any arrangement that enables buyers and sellers to get information and trade with one another. 
B)  physical structures only. 
C)  trading arrangements that have been approved by the government. 
D)  locations where buyers and sellers physically meet. 
A)  any arrangement that enables buyers and sellers to get information and trade with one another. 
B)  physical structures only. 
C)  trading arrangements that have been approved by the government. 
D)  locations where buyers and sellers physically meet.

Question 19

-In the figure above, if the quantity of yogurt produced increases from 2 gallons an hour to 3 gallons an hour, the opportunity cost of a gallon of yogurt in terms of ice cream is

Accepted Answer

A)  3 gallons. 
B)  half a gallon. 
C)  4 gallons. 
D)  1 gallon. 
A)  3 gallons. 
B)  half a gallon. 
C)  4 gallons. 
D)  1 gallon.

Question 20

A country possesses a comparative advantage in the production of a good if

Accepted Answer

A)  the opportunity cost in terms of forgone output of alternative goods is lower for this country than it is for its trading partners. 
B)  it is able to produce more of this good per hour than can any other country. 
C)  it possesses an absolute advantage in the production of this good. 
D)  all of the above 
A)  the opportunity cost in terms of forgone output of alternative goods is lower for this country than it is for its trading partners. 
B)  it is able to produce more of this good per hour than can any other country. 
C)  it possesses an absolute advantage in the production of this good. 
D)  all of the above

Suppose a scientific breakthrough made free solar power available in unlimited quantities in the United States. The effect of this invention would be to move the

When the opportunity cost of producing more of a good is increasing, the marginal cost of producing more of the good is

Resource use is allocatively efficient when marginal benefit is

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. Which of the following points signifies efficient production?

Explain the connection between opportunity cost and the PPF.

Marginal benefit curves slope and marginal cost curves slope .

Because of the existence of comparative advantage, the total output of goods is higher when each producer

Which of the following is TRUE regarding marginal benefit? I. The marginal benefit curve shows the benefit firms receive by producing another unit of a good. II. Marginal benefit increases as more of a good is consumed.

What economic concepts are represented in the production possibilities model?

The production possibilities frontier itself shows

How do property rights help organize production and trade?

-In one day, Brandon can either plow 10 acres or plant 20 acres. In one day, Christopher can either plow 14 acres or plant 14 acres. Brandon and Christopher can

When producing at a production efficient point,____________ .

-The figure above shows Fredaʹs PPF. Freda currently produces 10 packets of fudge and no cookies. If Freda decides to produce 1 packet of cookies, her opportunity cost of the packet of cookies is____________of fudge.

The opportunity cost of economic growth is

A country produces only pencils and erasers. Pencil production is allocatively efficient if the marginal of a pencil equals the marginal of .

The term ʺmarketʺ refers to

-In the figure above, if the quantity of yogurt produced increases from 2 gallons an hour to 3 gallons an hour, the opportunity cost of a gallon of yogurt in terms of ice cream is

A country possesses a comparative advantage in the production of a good if

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

Suppose a scientific breakthrough made free solar power available in unlimited quantities in the United States. The effect of this invention would be to move the

When the opportunity cost of producing more of a good is increasing, the marginal cost of producing more of the good is

Resource use is allocatively efficient when marginal benefit is

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. Which of the following points signifies efficient production?

Explain the connection between opportunity cost and the PPF.

Marginal benefit curves slope and marginal cost curves slope .

Because of the existence of comparative advantage, the total output of goods is higher when each producer

Which of the following is TRUE regarding marginal benefit? I. The marginal benefit curve shows the benefit firms receive by producing another unit of a good. II. Marginal benefit increases as more of a good is consumed.

What economic concepts are represented in the production possibilities model?

The production possibilities frontier itself shows

How do property rights help organize production and trade?

-In one day, Brandon can either plow 10 acres or plant 20 acres. In one day, Christopher can either plow 14 acres or plant 14 acres. Brandon and Christopher can

When producing at a production efficient point,____________ .

-The figure above shows Fredaʹs PPF. Freda currently produces 10 packets of fudge and no cookies. If Freda decides to produce 1 packet of cookies, her opportunity cost of the packet of cookies is____________of fudge.

The opportunity cost of economic growth is

A country produces only pencils and erasers. Pencil production is allocatively efficient if the marginal ________of a pencil equals the marginal________ of ________.

The term ʺmarketʺ refers to

-In the figure above, if the quantity of yogurt produced increases from 2 gallons an hour to 3 gallons an hour, the opportunity cost of a gallon of yogurt in terms of ice cream is

A country possesses a comparative advantage in the production of a good if

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

A country produces only pencils and erasers. Pencil production is allocatively efficient if the marginal of a pencil equals the marginal of .