Exam 2: Production Possibilities, Opportunity Cost, and Economic Growth

Just before class, Jim tells Stuart, "Stuart, you shouldn't skip class today because you have paid tuition to enroll in the class." Stuart ignores Jim's advice, and instead makes the decision of whether to attend based on the importance to his grade that he feels he'd be missing that day in class relative to his value of the extra time he could have to finish the video game he is playing. To an economist, Stuart is:

Every economic choice has an opportunity cost.

Ralph wants to buy some milk and a box of cereal. If Ralph buys 2 quarts of milk at $1 per quart, the box of cereal costs 75 cents. If he buys 3 quarts of milk at $1 per quart, the box of cereal is free. For Ralph, the marginal cost of the third quart of milk is:

On a production possibilities curve, the opportunity cost of good X, in terms of good Y, is represented by the:

If an economy keeps increasing its capital stock, then over time its production possibilities curve will:

A production possibilities curve shows the various:

Exhibit 2-11 Production possibilities curves -In Exhibit 2-11, which of the following could have caused the production possibilities curve to shift from the one labeled B to the one labeled A?

As production of a good increases, opportunity costs rise because:

The amount of a good that is given up to produce another good is:

If some resources went to waste rather to use in production, the economy would operate outside its production possibility curve.

After the terrorist attacks on September 11, 2001, the United States began devoting substantial resources toward the War on Terrorism, homeland security, and relief efforts. As long as our resources were being used efficiently, the production possibilities curve would suggest that:

A production possibilities curve shows the:

The production possibilities curve demonstrates the basic economic principle that:

When the opportunity cost of producing carrots increases as more carrots are produced, then:

Which of the following is an example of an organization using marginal analysis?

The amount of a good that must be given up to produce another good is the concept of:

Exhibit 2-2 Production possibilities curve -In Exhibit 2-2, the slope of the production possibilities curve indicates that the opportunity cost of:

Which of the following is true of the production possibilities curve?

Exhibit 2-10 Production possibilities curve data A B C D E Capital goods 0 1 2 3 4 Consumption goods 25 23 19 13 0 -Suppose an economy is faced with the production possibilities table shown in Exhibit 2-10. As additional units of capital goods are produced, the opportunity cost in terms of sacrificed units of consumption goods ____ because of ____.

With time, which one of the following strategies would most likely result in an outward shift in the production possibilities curve of an economy?