Question 1

In an hour, Andy can make either 5 pizzas or 12 pies and Chris can make either 6 pizzas or 18 pies.____________advantage in making pizzas.

Accepted Answer

A)  Andy has a comparative 
B)  Chris has a comparative 
C)  Andy has an absolute 
D)  None of the above answers is correct. 
A)  Andy has a comparative 
B)  Chris has a comparative 
C)  Andy has an absolute 
D)  None of the above answers is correct.

Question 2

Technological change

Accepted Answer

A)  creates inefficiency. 
B)  shifts the PPF leftward. 
C)  generates economic growth. 
D)  Both answers A and C are correct. 
A)  creates inefficiency. 
B)  shifts the PPF leftward. 
C)  generates economic growth. 
D)  Both answers A and C are correct.

Question 3

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. Sueʹs opportunity cost of changing oil is
________than Fredʹs and her opportunity cost for changing tires is________ than Fredʹs.

Accepted Answer

A)  greater; less 
B)  less; less 
C)  greater; greater 
D)  less; greater 
A)  greater; less 
B)  less; less 
C)  greater; greater 
D)  less; greater

Question 4

-Refer to the production possibilities frontier in the figure above. Which production point indicates that resources are NOT fully utilized or are misallocated?

Accepted Answer

A)  Point a 
B)  Point b 
C)  Point c 
D)  Point e 
A)  Point a 
B)  Point b 
C)  Point c 
D)  Point e

Question 5

Homer and Teddy are stranded on a desert island. To feed themselves each day they can either catch fish or pick fruit. In a day, Teddy could pick 60 pieces of fruit or catch 20 fish. Homer could pick 100 pieces of fruit or catch 150 fish. Which of the following statements is correct?

Accepted Answer

A)  Homer has an absolute advantage in catching fish and Teddy has an absolute advantage in picking fruit. 
B)  Teddy has an absolute advantage in both catching fish and picking fruit. 
C)  Homer has an absolute advantage in picking fruit and Teddy has an absolute advantage in catching fish. 
D)  Homer has an absolute advantage in both catching fish and picking fruit. 
A)  Homer has an absolute advantage in catching fish and Teddy has an absolute advantage in picking fruit. 
B)  Teddy has an absolute advantage in both catching fish and picking fruit. 
C)  Homer has an absolute advantage in picking fruit and Teddy has an absolute advantage in catching fish. 
D)  Homer has an absolute advantage in both catching fish and picking fruit.

Question 6

-Employees at Bank of America are good at providing banking services and workers at Ben & Jerryʹs are good at making ice cream. The figure above shows the marginal cost and marginal benefit curves for ice cream. If 1 million gallons of ice cream are being produced,

Accepted Answer

A)  the marginal cost of an additional gallon of ice cream is greater the value people place on it. 
B)  more banking services should be produced. 
C)  the cost an additional gallon of ice cream is more than people think it is worth. 
D)  people value an additional gallon of ice cream more highly than its cost of production. 
A)  the marginal cost of an additional gallon of ice cream is greater the value people place on it. 
B)  more banking services should be produced. 
C)  the cost an additional gallon of ice cream is more than people think it is worth. 
D)  people value an additional gallon of ice cream more highly than its cost of production.

Question 7

-In the figure above, if 4 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 more computers 
B)  marginal cost of a computer exceeds the marginal benefit of a computer, so fewer computers 
C)  marginal benefit of a computer exceeds the marginal cost of a computer, so fewer 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 more computers 
B)  marginal cost of a computer exceeds the marginal benefit of a computer, so fewer computers 
C)  marginal benefit of a computer exceeds the marginal cost of a computer, so fewer computers 
D)  marginal benefit of a computer exceeds the marginal cost of a computer, so more computers

Question 8

The table above shows the production possibilities frontier for the nation of Isolanda.
a) Find the marginal cost of a pound of fish using the above PPF.
b) How does the marginal cost of a pound of fish change as more fish are caught?

Accepted Answer

The table above shows the marginal cost

Question 9

Increasing opportunity cost while moving along a production possibilities frontier is the result of

Accepted Answer

A)  the fact that it is more difficult to use resources efficiently the more society produces. 
B)  taxes. 
C)  the fact that resources are not equally productive in alternative uses. 
D)  firmsʹ needs to produce profits. 
A)  the fact that it is more difficult to use resources efficiently the more society produces. 
B)  taxes. 
C)  the fact that resources are not equally productive in alternative uses. 
D)  firmsʹ needs to produce profits.

Question 10

-Anna and Maria produce shirts and ties. The figure above shows Annaʹs PPF and Mariaʹs PPF. Anna and Maria can achieve the gains from trade if Anna produces _________and Maria produces___________

Accepted Answer

A)  only ties; shirts and ties 
B)  shirts; ties 
C)  shirts and ties; only ties 
D)  ties; shirts 
A)  only ties; shirts and ties 
B)  shirts; ties 
C)  shirts and ties; only ties 
D)  ties; shirts

Question 11

$$\begin{array} { | l | l | l | } 
\hline \begin{array} { l } 
\text { Quantity of } \
\text { pizza }
\end{array} & \begin{array} { l } 
\text { Marginal } \
\text { benefit }
\end{array} & \begin{array} { l } 
\text { Marginal } \
\text { cost }
\end{array} \
\hline 5 & 25 & 11 \
\hline 6 & 20 & 13 \
\hline 7 & 15 & 15 \
\hline 8 & 10 & 17 \
\hline
\end{array}$$
-The table above represents the marginal cost and marginal benefit associated with pizza in terms of movies). What quantity of pizza should be produced if resources are to be used efficiently?

Accepted Answer

A)  8 pizzas 
B)  7 pizzas 
C)  6 pizzas 
D)  5 pizzas 
A)  8 pizzas 
B)  7 pizzas 
C)  6 pizzas 
D)  5 pizzas

Question 12

-In the figure above, which of the following movements has the largest opportunity cost?

Accepted Answer

A)  from point B to point A 
B)  from point A to point E 
C)  from point C to point B 
D)  from point C to point A 
A)  from point B to point A 
B)  from point A to point E 
C)  from point C to point B 
D)  from point C to point A

Question 13

-In the figure above, at the allocatively efficient level of computer production consumers are willing to give up

Accepted Answer

A)  more than 3 televisions per computer. 
B)  between 0 and 3 televisions per computer. 
C)  3 televisions per computer. 
D)  0 televisions per computer. 
A)  more than 3 televisions per computer. 
B)  between 0 and 3 televisions per computer. 
C)  3 televisions per computer. 
D)  0 televisions per computer.

Question 14

$$\begin{array} { | l | l | l | } 
\hline \text { Point } & \begin{array} { l } 
\text { Production } \
\text { of } X
\end{array} & \begin{array} { l } 
\text { Production } \
\text { of } Y
\end{array} \
\hline a & 0 & 40 \
\hline b & 4 & 36 \
\hline c & 8 & 28 \
\hline & 12 & 16 \
\hline e & 16 & 0 \
\hline
\end{array}$$
-Refer to the table above, which gives five points on a nation?s PPF. The production of 7 units of X
And 28 units of Y is

Accepted Answer

A)  possible but leaves some resources less than fully used or misallocated. 
B)  on the production possibilities frontier between points c and d. 
C)  impossible given the available resources. 
D)  on the production possibilities frontier between points b and c. 
A)  possible but leaves some resources less than fully used or misallocated. 
B)  on the production possibilities frontier between points c and d. 
C)  impossible given the available resources. 
D)  on the production possibilities frontier between points b and c.

Question 15

$$\begin{array} { | l | l | l | } 
\hline \text { Point } & \begin{array} { l } 
\text { Production of grain } \
\text { (tons) }
\end{array} & \begin{array} { l } 
\text { Production of cars } \
\text { (cars) }
\end{array} \
\hline \text { A } & 0 & 30 \
\hline \text { B } & 2 & 28 \
\hline \text { C } & 4 & 24 \
\hline \text { D } & 6 & 18 \
\hline \text { E } & 8 & 10 \
\hline \text { F } & 10 & 0 \
\hline
\end{array}$$
-The table above lists six points on the production possibilities frontier for grain and cars. Given this information, which of the following combinations is unattainable?

Accepted Answer

A)  6 tons of grain and 18 cars 
B)  7 tons of grain and 10 cars 
C)  2 tons of grain and 27 cars 
D)  4 tons of grain and 26 cars 
A)  6 tons of grain and 18 cars 
B)  7 tons of grain and 10 cars 
C)  2 tons of grain and 27 cars 
D)  4 tons of grain and 26 cars

Question 16

If a society is operating at a point inside its production possibilities frontier, then this societyʹs

Accepted Answer

A)  economy will grow too fast. 
B)  resources are being inefficiently utilized. 
C)  production possibilities frontier will shift rightward. 
D)  resources are being used in the most efficient manner. 
A)  economy will grow too fast. 
B)  resources are being inefficiently utilized. 
C)  production possibilities frontier will shift rightward. 
D)  resources are being used in the most efficient manner.

Question 17

The production possibilities frontier represents

Accepted Answer

A)  the maximum amount of labor and capital available to society. 
B)  combinations of goods and services among which consumers are indifferent. 
C)  the maximum rate of growth of capital and labor in a country. 
D)  the maximum levels of production that can be attained. 
A)  the maximum amount of labor and capital available to society. 
B)  combinations of goods and services among which consumers are indifferent. 
C)  the maximum rate of growth of capital and labor in a country. 
D)  the maximum levels of production that can be attained.

Question 18

Suppose Joe can prepare 10 sandwiches or 5 pizzas in an hour and Beth can produce 12 sandwiches or 9 pizzas. Which of the following is true?

Accepted Answer

A)  Joe should produce pizza because he has a lower opportunity cost of producing pizza than does Beth. 
B)  Beth should produce pizza because she has a higher opportunity cost of producing pizza than does Joe. 
C)  Joe should produce pizza because he has a higher opportunity cost of producing pizza than does Beth. 
D)  Beth should produce pizza because she has a lower opportunity cost of producing pizza than does Joe. 
A)  Joe should produce pizza because he has a lower opportunity cost of producing pizza than does Beth. 
B)  Beth should produce pizza because she has a higher opportunity cost of producing pizza than does Joe. 
C)  Joe should produce pizza because he has a higher opportunity cost of producing pizza than does Beth. 
D)  Beth should produce pizza because she has a lower opportunity cost of producing pizza than does Joe.

Question 19

Production efficiency occurs when production ____________ .

Accepted Answer

A)  is at any attainable point 
B)  is at a point beyond the production possibilities frontier 
C)  is on the production possibilities frontier or inside it 
D)  is on the production possibilities frontier 
A)  is at any attainable point 
B)  is at a point beyond the production possibilities frontier 
C)  is on the production possibilities frontier or inside it 
D)  is on the production possibilities frontier

Question 20

$$\begin{array} { | l | c | c | } 
\hline & \begin{array} { l } 
\text { Don's production } \
\text { possibilities }
\end{array} & \begin{array} { l } 
\text { Bob's production } \
\text { possibilities }
\end{array} \
\hline \text { Pens } & 10 & 5 \
\hline \text { Pencils } & 20 & 15 \
\hline
\end{array}$$
-The above table shows the number of pencils or pens that could be produced by Don and Bob in an hour. This schedule shows that

Accepted Answer

A)  Bob has a comparative advantage in the production of pencils. 
B)  Don has a comparative advantage in the production of both pencils and pens. 
C)  Bob has an absolute advantage in the production of pencils, and Don has an absolute advantage in the production of pens. 
D)  Don has an absolute advantage in the production of pencils, and Bob has an absolute advantage in the production of pens. 
A)  Bob has a comparative advantage in the production of pencils. 
B)  Don has a comparative advantage in the production of both pencils and pens. 
C)  Bob has an absolute advantage in the production of pencils, and Don has an absolute advantage in the production of pens. 
D)  Don has an absolute advantage in the production of pencils, and Bob has an absolute advantage in the production of pens.

In an hour, Andy can make either 5 pizzas or 12 pies and Chris can make either 6 pizzas or 18 pies.____________advantage in making pizzas.

Technological change

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. Sueʹs opportunity cost of changing oil is than Fredʹs and her opportunity cost for changing tires is than Fredʹs.

-Refer to the production possibilities frontier in the figure above. Which production point indicates that resources are NOT fully utilized or are misallocated?

Homer and Teddy are stranded on a desert island. To feed themselves each day they can either catch fish or pick fruit. In a day, Teddy could pick 60 pieces of fruit or catch 20 fish. Homer could pick 100 pieces of fruit or catch 150 fish. Which of the following statements is correct?

-Employees at Bank of America are good at providing banking services and workers at Ben & Jerryʹs are good at making ice cream. The figure above shows the marginal cost and marginal benefit curves for ice cream. If 1 million gallons of ice cream are being produced,

-In the figure above, if 4 million computers are produced per year then the ___________should be produced to achieve the allocatively efficient use of resources

The table above shows the production possibilities frontier for the nation of Isolanda. a) Find the marginal cost of a pound of fish using the above PPF. b) How does the marginal cost of a pound of fish change as more fish are caught?

Increasing opportunity cost while moving along a production possibilities frontier is the result of

-Anna and Maria produce shirts and ties. The figure above shows Annaʹs PPF and Mariaʹs PPF. Anna and Maria can achieve the gains from trade if Anna produces _and Maria produces___

Quantity of pizza Marginal benefit Marginal cost 5 25 11 6 20 13 7 15 15 8 10 17 -The table above represents the marginal cost and marginal benefit associated with pizza in terms of movies). What quantity of pizza should be produced if resources are to be used efficiently?

-In the figure above, which of the following movements has the largest opportunity cost?

-In the figure above, at the allocatively efficient level of computer production consumers are willing to give up

Point Production of X Production of Y a 0 40 b 4 36 c 8 28 12 16 e 16 0 -Refer to the table above, which gives five points on a nation?s PPF. The production of 7 units of X And 28 units of Y is

Point Production of grain (tons) Production of cars (cars) A 0 30 B 2 28 C 4 24 D 6 18 E 8 10 F 10 0 -The table above lists six points on the production possibilities frontier for grain and cars. Given this information, which of the following combinations is unattainable?

If a society is operating at a point inside its production possibilities frontier, then this societyʹs

The production possibilities frontier represents

Suppose Joe can prepare 10 sandwiches or 5 pizzas in an hour and Beth can produce 12 sandwiches or 9 pizzas. Which of the following is true?

Production efficiency occurs when production ____________ .

Don's production possibilities Bob's production possibilities Pens 10 5 Pencils 20 15 -The above table shows the number of pencils or pens that could be produced by Don and Bob in an hour. This schedule shows that

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 an hour, Andy can make either 5 pizzas or 12 pies and Chris can make either 6 pizzas or 18 pies.____________advantage in making pizzas.

Technological change

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. Sueʹs opportunity cost of changing oil is ________than Fredʹs and her opportunity cost for changing tires is________ than Fredʹs.

-Refer to the production possibilities frontier in the figure above. Which production point indicates that resources are NOT fully utilized or are misallocated?

Homer and Teddy are stranded on a desert island. To feed themselves each day they can either catch fish or pick fruit. In a day, Teddy could pick 60 pieces of fruit or catch 20 fish. Homer could pick 100 pieces of fruit or catch 150 fish. Which of the following statements is correct?

-Employees at Bank of America are good at providing banking services and workers at Ben & Jerryʹs are good at making ice cream. The figure above shows the marginal cost and marginal benefit curves for ice cream. If 1 million gallons of ice cream are being produced,

-In the figure above, if 4 million computers are produced per year then the ___________should be produced to achieve the allocatively efficient use of resources

The table above shows the production possibilities frontier for the nation of Isolanda. a) Find the marginal cost of a pound of fish using the above PPF. b) How does the marginal cost of a pound of fish change as more fish are caught?

Increasing opportunity cost while moving along a production possibilities frontier is the result of

-Anna and Maria produce shirts and ties. The figure above shows Annaʹs PPF and Mariaʹs PPF. Anna and Maria can achieve the gains from trade if Anna produces _________and Maria produces___________

Quantity of pizza Marginal benefit Marginal cost 5 25 11 6 20 13 7 15 15 8 10 17 -The table above represents the marginal cost and marginal benefit associated with pizza in terms of movies). What quantity of pizza should be produced if resources are to be used efficiently?

-In the figure above, which of the following movements has the largest opportunity cost?

-In the figure above, at the allocatively efficient level of computer production consumers are willing to give up

Point Production of X Production of Y a 0 40 b 4 36 c 8 28 12 16 e 16 0 -Refer to the table above, which gives five points on a nation?s PPF. The production of 7 units of X And 28 units of Y is

Point Production of grain (tons) Production of cars (cars) A 0 30 B 2 28 C 4 24 D 6 18 E 8 10 F 10 0 -The table above lists six points on the production possibilities frontier for grain and cars. Given this information, which of the following combinations is unattainable?

If a society is operating at a point inside its production possibilities frontier, then this societyʹs

The production possibilities frontier represents

Suppose Joe can prepare 10 sandwiches or 5 pizzas in an hour and Beth can produce 12 sandwiches or 9 pizzas. Which of the following is true?

Production efficiency occurs when production ____________ .

Don's production possibilities Bob's production possibilities Pens 10 5 Pencils 20 15 -The above table shows the number of pencils or pens that could be produced by Don and Bob in an hour. This schedule shows that

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. Sueʹs opportunity cost of changing oil is than Fredʹs and her opportunity cost for changing tires is than Fredʹs.

-Anna and Maria produce shirts and ties. The figure above shows Annaʹs PPF and Mariaʹs PPF. Anna and Maria can achieve the gains from trade if Anna produces _and Maria produces___