Question 1

If there were decreasing marginal opportunity costs, the production possibility curve would be:

Accepted Answer

A)  flat. 
B)  straight. 
C)  bowed out. 
D)  bowed in. 
A)  flat. 
B)  straight. 
C)  bowed out. 
D)  bowed in.

Question 2

Because you can get more of one good only by giving up some of another good, the shape of a production possibility curve is:

Accepted Answer

A)  upward-sloping. 
B)  perfectly vertical. 
C)  perfectly horizontal. 
D)  downward-sloping. 
A)  upward-sloping. 
B)  perfectly vertical. 
C)  perfectly horizontal. 
D)  downward-sloping.

Question 3

The principle of increasing marginal opportunity cost does not hold in which of the following cases?

Accepted Answer

A)  All inputs are equally useful in the production of all goods. 
B)  Some inputs are more useful in the production of certain goods. 
C)  Some inputs are less useful in the production of certain goods. 
D)  Each input is useful in the production of a limited number of goods. 
A)  All inputs are equally useful in the production of all goods. 
B)  Some inputs are more useful in the production of certain goods. 
C)  Some inputs are less useful in the production of certain goods. 
D)  Each input is useful in the production of a limited number of goods.

Question 4

Mexico has a comparative advantage in producing corn:

Accepted Answer

A)  if its opportunity cost of producing corn is higher than the opportunity cost in other countries. 
B)  if its opportunity cost of producing corn is the same as the opportunity cost in other countries. 
C)  if its opportunity cost of producing corn is lower than the opportunity cost in other countries. 
D)  regardless of the opportunity cost in other countries. 
A)  if its opportunity cost of producing corn is higher than the opportunity cost in other countries. 
B)  if its opportunity cost of producing corn is the same as the opportunity cost in other countries. 
C)  if its opportunity cost of producing corn is lower than the opportunity cost in other countries. 
D)  regardless of the opportunity cost in other countries.

Question 5

The graph below indicates that the economy can produce both:

Accepted Answer

A)  20 units of eggs and 5 units of rye, although this would not be efficient. 
B)  10 units of eggs and 20 units of rye, although this would not be efficient. 
C)  20 units of eggs and 5 units of rye, and this would be efficient. 
D)  10 units of eggs and 20 units of rye, and this would be efficient. 
A)  20 units of eggs and 5 units of rye, although this would not be efficient. 
B)  10 units of eggs and 20 units of rye, although this would not be efficient. 
C)  20 units of eggs and 5 units of rye, and this would be efficient. 
D)  10 units of eggs and 20 units of rye, and this would be efficient.

Question 6

In the graph shown, what change would increase production efficiency?

Accepted Answer

A)  Moving from A to D 
B)  Moving from A to B 
C)  Moving from C to D 
D)  Moving from D to B 
A)  Moving from A to D 
B)  Moving from A to B 
C)  Moving from C to D 
D)  Moving from D to B

Question 7

Given a production possibility curve for good X (on the x-axis) and good Y (on the y-axis), the opportunity cost of increasing good X is greatest when the slope of the production possibility curve is:

Accepted Answer

A)  −6. 
B)  −4. 
C)  6. 
D)  4. 
A)  −6. 
B)  −4. 
C)  6. 
D)  4.

Question 8

Evan can grow both roses and carnations in his garden. His production possibility table is shown below. If he is currently producing 110 roses, his opportunity cost of producing 40 more roses is: $\begin{array}{|c|c|}
\hline \text { Number of roses } & \text { Number of carnations } \
\hline 0 & 155 \
\hline 60 & 135 \
\hline 110 & 109 \
\hline 150 & 78 \
\hline 180 & 0 \
\hline
\end{array}$

Accepted Answer

A)  20 carnations 
B)  26 carnations 
C)  31 carnations 
D)  78 carnations 
A)  20 carnations 
B)  26 carnations 
C)  31 carnations 
D)  78 carnations

Question 9

John can clean the house in three hours and do the laundry in four. Jane can clean the house in two hours or do the laundry in two. Can they benefit by specialization and trade?

Accepted Answer

A)  Neither can benefit because John has nothing to offer. 
B)  John could benefit from an exchange, but Jane cannot because she is better at both. 
C)  Both can benefit because John has a comparative advantage in laundry. 
D)  Both can benefit because John has a comparative advantage in cleaning. 
A)  Neither can benefit because John has nothing to offer. 
B)  John could benefit from an exchange, but Jane cannot because she is better at both. 
C)  Both can benefit because John has a comparative advantage in laundry. 
D)  Both can benefit because John has a comparative advantage in cleaning.

Question 10

Suppose that in Slovakia one unit of labor can produce either 20 tons of wheat or 40 tons of soy and in Poland one unit of labor can produce either 40 tons of wheat or 20 tons of soy. If each country has two units of labor, which of the following consumption combinations can be attained only with trade?

Accepted Answer

A)  Slovakia consumes 80 tons of soy. 
B)  Slovakia consumes 30 tons of both soy and wheat. 
C)  Poland consumes 80 tons of wheat. 
D)  Poland consumes 40 tons of wheat and 20 tons of soy. 
A)  Slovakia consumes 80 tons of soy. 
B)  Slovakia consumes 30 tons of both soy and wheat. 
C)  Poland consumes 80 tons of wheat. 
D)  Poland consumes 40 tons of wheat and 20 tons of soy.

Question 11

Which of the following factors will help the United States regain comparative advantages in industries in which it has lost comparative advantages?

Accepted Answer

A)  The value of the U.S. dollar falls. 
B)  The value of the U.S. dollar rises. 
C)  The United States imports more goods. 
D)  Wages in the United States rise. 
A)  The value of the U.S. dollar falls. 
B)  The value of the U.S. dollar rises. 
C)  The United States imports more goods. 
D)  Wages in the United States rise.

If there were decreasing marginal opportunity costs, the production possibility curve would be:

Because you can get more of one good only by giving up some of another good, the shape of a production possibility curve is:

The principle of increasing marginal opportunity cost does not hold in which of the following cases?

Mexico has a comparative advantage in producing corn:

The graph below indicates that the economy can produce both:

In the graph shown, what change would increase production efficiency?

Given a production possibility curve for good X (on the x-axis) and good Y (on the y-axis), the opportunity cost of increasing good X is greatest when the slope of the production possibility curve is:

Evan can grow both roses and carnations in his garden. His production possibility table is shown below. If he is currently producing 110 roses, his opportunity cost of producing 40 more roses is: Number of roses Number of carnations 0 155 60 135 110 109 150 78 180 0

John can clean the house in three hours and do the laundry in four. Jane can clean the house in two hours or do the laundry in two. Can they benefit by specialization and trade?

Which of the following factors will help the United States regain comparative advantages in industries in which it has lost comparative advantages?

Economics and Economic Reasoning

Economic Institutions

Supply and Demand

Using Supply and Demand

Describing Supply and Demand: Elasticities

Taxation and Government Intervention

Market Failure Versus Government Failure

Comparative Advantage, Exchange Rates, and Globalization

International Trade Policy

Production and Cost Analysis I

Production and Cost Analysis II

Perfect Competition

Monopoly and Monopolistic Competition

Oligopoly and Antitrust Policy

Real-World Competition and Technology

Work and the Labor Market

Who Gets What the Distribution of Income

The Logic of Individual Choice: the Foundation of Supply and Demand

Game Theory, Strategic Decision Making, and Behavioral Economics

Thinking Like a Modern Economist

Behavioral Economics and Modern Economic Policy

Microeconomic Policy, Economic Reasoning, and Beyond

Filters

Exam 2: The Production Possibility Model, Trade, and Globalization

If there were decreasing marginal opportunity costs, the production possibility curve would be:

Because you can get more of one good only by giving up some of another good, the shape of a production possibility curve is:

The principle of increasing marginal opportunity cost does not hold in which of the following cases?

Mexico has a comparative advantage in producing corn:

The graph below indicates that the economy can produce both:

In the graph shown, what change would increase production efficiency?

Given a production possibility curve for good X (on the x-axis) and good Y (on the y-axis), the opportunity cost of increasing good X is greatest when the slope of the production possibility curve is:

Evan can grow both roses and carnations in his garden. His production possibility table is shown below. If he is currently producing 110 roses, his opportunity cost of producing 40 more roses is: Number of roses Number of carnations 0 155 60 135 110 109 150 78 180 0

John can clean the house in three hours and do the laundry in four. Jane can clean the house in two hours or do the laundry in two. Can they benefit by specialization and trade?

Which of the following factors will help the United States regain comparative advantages in industries in which it has lost comparative advantages?

Economics and Economic Reasoning

Economic Institutions

Supply and Demand

Using Supply and Demand

Describing Supply and Demand: Elasticities

Taxation and Government Intervention

Market Failure Versus Government Failure

Comparative Advantage, Exchange Rates, and Globalization

International Trade Policy

Production and Cost Analysis I

Production and Cost Analysis II

Perfect Competition

Monopoly and Monopolistic Competition

Oligopoly and Antitrust Policy

Real-World Competition and Technology

Work and the Labor Market

Who Gets What the Distribution of Income

The Logic of Individual Choice: the Foundation of Supply and Demand

Game Theory, Strategic Decision Making, and Behavioral Economics

Thinking Like a Modern Economist

Behavioral Economics and Modern Economic Policy

Microeconomic Policy, Economic Reasoning, and Beyond

Filters