Exam 2: Production Possibilities Frontier Framework

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Give a definition of an advance in technology. Suppose that you are drawing a PPF for civilian goods and military goods, describe the effect on the PPF of an advance in technology in both civilian goods and military goods. How would the impact on the PPF be different if the technological improvement only helped in the production of military goods, but not civilian goods?

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Question 1

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An advance in technology commonly refers to the ability to produce more output with a fixed amount of resources (or the same amount of output with a smaller amount of resources). When technology advances in the production of both products the PPF shifts outward. When technology advances in the production of military goods, but not civilian goods, the PPF shifts outward along the axis for military goods and the intercept remains constant along the axis for civilian goods.

Jose has one evening in which to prepare for two exams and can employ one of two possible strategies: The opportunity cost of receiving a 92 on the statistics exam is __________ points on the economics exam.

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Question 2

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An economy is productive efficient if it produces

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Question 3

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Which of the following statements is false?

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Question 4

Exhibit 2-5 -Refer to Exhibit 2-5. Which of the following labeled points are productive efficient?

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Question 5

Exhibit 2-8 -Refer to Exhibit 2-8. For Maria, the opportunity cost of producing one unit of good Y is ___________ unit(s) of good X.

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Question 6

Exhibit 2-7 -Refer to Exhibit 2-7. Point F is

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Question 7

Exhibit 2-1 -Refer to Exhibit 2-1. The opportunity cost of moving from point B to A is

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Question 8

Consider the following combinations of guns and butter that can be produced: 0 guns, 20,000 units of butter; 5,000 guns, 15,000 units of butter; 10,000 guns, 10,000 units of butter; 15,000 guns, 5,000 units of butter; 20,000 guns, 0 units of butter. The PPF between guns and butter is

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Question 9

A decrease in unemployment causes the PPF to shift outward (to the right).

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Question 10

The point where the PPF intersects the horizontal axis is

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Question 11

If the law of increasing opportunity costs is operable, and currently the opportunity cost of producing the 101st unit of good X is 5Y, then the opportunity cost of producing the 201st unit of good is X is

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Question 12

An increase in the quantity of resources available

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Question 13

Exhibit 2-8 -Refer to Exhibit 2-8. If Maria and Maya each specialize in the good in which she has a comparative advantage and then engage in trade, ____________________ can consume a combination of goods that lies beyond her PPF.

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Question 14

A PPF is a straight line as a result of

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Question 15

A decrease in the quantity of resources available causes a movement from one point on a given PPF to another point along the same PPF.

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Question 16

If a production possibilities frontier (PPF) is concave outward, it follows that

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Question 17

Which of the following statements is true?

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Question 18

Which of the following is not true about production possibilities frontiers?

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Question 19

Exhibit 2-9 -Refer to Exhibit 2-9. If Alex and Adam each specialize in the good in which he has a comparative advantage and then engage in trade, ____________________ can consume a combination of goods that lies beyond their PPF.

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Question 20

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Exam 2: Production Possibilities Frontier Framework

Jose has one evening in which to prepare for two exams and can employ one of two possible strategies: The opportunity cost of receiving a 92 on the statistics exam is __________ points on the economics exam.

An economy is productive efficient if it produces

Which of the following statements is false?

Exhibit 2-5 -Refer to Exhibit 2-5. Which of the following labeled points are productive efficient?

Exhibit 2-8 -Refer to Exhibit 2-8. For Maria, the opportunity cost of producing one unit of good Y is ___________ unit(s) of good X.

Exhibit 2-7 -Refer to Exhibit 2-7. Point F is

Exhibit 2-1 -Refer to Exhibit 2-1. The opportunity cost of moving from point B to A is

Consider the following combinations of guns and butter that can be produced: 0 guns, 20,000 units of butter; 5,000 guns, 15,000 units of butter; 10,000 guns, 10,000 units of butter; 15,000 guns, 5,000 units of butter; 20,000 guns, 0 units of butter. The PPF between guns and butter is

A decrease in unemployment causes the PPF to shift outward (to the right).

The point where the PPF intersects the horizontal axis is

If the law of increasing opportunity costs is operable, and currently the opportunity cost of producing the 101st unit of good X is 5Y, then the opportunity cost of producing the 201st unit of good is X is

An increase in the quantity of resources available

Exhibit 2-8 -Refer to Exhibit 2-8. If Maria and Maya each specialize in the good in which she has a comparative advantage and then engage in trade, ____________________ can consume a combination of goods that lies beyond her PPF.

A PPF is a straight line as a result of

A decrease in the quantity of resources available causes a movement from one point on a given PPF to another point along the same PPF.

If a production possibilities frontier (PPF) is concave outward, it follows that

Which of the following statements is true?

Which of the following is not true about production possibilities frontiers?

Exhibit 2-9 -Refer to Exhibit 2-9. If Alex and Adam each specialize in the good in which he has a comparative advantage and then engage in trade, ____________________ can consume a combination of goods that lies beyond their PPF.

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