Question 1

Exhibit 2-8
  
-Refer to Exhibit 2-8. Who has the comparative advantage in the production of good Y?

Accepted Answer

A) Maria 
B) Maya 
C) Both Maria and Maya 
D) Neither Maria nor Maya 
A) Maria 
B) Maya 
C) Both Maria and Maya 
D) Neither Maria nor Maya

Question 2

With respect to a PPF for goods X and Y, productive efficiency implies that in order to produce more of good X there will be a reduction in production of good Y.

Accepted Answer

A) True 
 B)False

Question 3

​
Exhibit 2-10
​
   ​
​
   ​
-Refer Exhibit 2-10. Which of the following statements is true?

Accepted Answer

A) There would be no gains from trade between person A and person B because the opportunity cost of producing one unit of good X (or one unit of good Y) is the same for both persons. 
B) Both person A and person B will benefit from specialization and trade as long as person A specializes in the production of good X and person B specializes in the production of good Y. 
C) Both person A and person B will benefit from specialization and trade as long as person A specializes in the production of good Y and person B specializes in the production of good X. 
D) Both person A and person B will benefit from trade as long as person A produces both good X and good Y, and person B produces neither good. 
E) Both person A and person B will benefit from trade as long as person B produces both good X and good Y, and person A produces neither good. 
A) There would be no gains from trade between person A and person B because the opportunity cost of producing one unit of good X (or one unit of good Y) is the same for both persons. 
B) Both person A and person B will benefit from specialization and trade as long as person A specializes in the production of good X and person B specializes in the production of good Y. 
C) Both person A and person B will benefit from specialization and trade as long as person A specializes in the production of good Y and person B specializes in the production of good X. 
D) Both person A and person B will benefit from trade as long as person A produces both good X and good Y, and person B produces neither good. 
E) Both person A and person B will benefit from trade as long as person B produces both good X and good Y, and person A produces neither good.

Question 4

If resources are better suited toward the production of one good than toward another good, then the PPF for those two goods is

Accepted Answer

A) a straight line. 
B) bowed outward. 
C) upward sloping. 
D) any of the above 
A) a straight line. 
B) bowed outward. 
C) upward sloping. 
D) any of the above

Question 5

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

Accepted Answer

A) 10,000 units of butter. 
B) 20,000 units of butter. 
C) 20,000 units of guns. 
D) 10,000 units of guns. 
A) 10,000 units of butter. 
B) 20,000 units of butter. 
C) 20,000 units of guns. 
D) 10,000 units of guns.

Question 6

Economic growth causes the PPF to

Accepted Answer

A) shift leftward. 
B) shift rightward. 
C) remain constant. 
D) go from a straight line to a curve. 
A) shift leftward. 
B) shift rightward. 
C) remain constant. 
D) go from a straight line to a curve.

Question 7

Suppose the economy goes from a point on its production possibilities frontier (PPF) to a point below that PPF. Assuming that the PPF has not shifted, this could be due to

Accepted Answer

A) a gain of resources. 
B) a loss of resources. 
C) technological improvement in the production of both goods. 
D) an increase in unemployment of some resources. 
A) a gain of resources. 
B) a loss of resources. 
C) technological improvement in the production of both goods. 
D) an increase in unemployment of some resources.

Question 8

Exhibit 2-5
  
-Refer to Exhibit 2-5. "In order to produce one more television set, we must forfeit the production of one fax machine." This statement describes a movement from

Accepted Answer

A) point C to point D. 
B) point D to point E. 
C) point E to point F. 
D) point E to point D. 
E) point D to point C. 
A) point C to point D. 
B) point D to point E. 
C) point E to point F. 
D) point E to point D. 
E) point D to point C.

Question 9

Exhibit 2-6
  
-Refer to Exhibit 2-6. Which graph depicts a discovery of a new cheap source of energy that assists in the production of both good X and good Y?

Accepted Answer

A) (1) 
B) (2) 
C) (3) 
D) (4) 
E) none of the above 
A) (1) 
B) (2) 
C) (3) 
D) (4) 
E) none of the above

Question 10

Exhibit 2-2
  
-Refer to Exhibit 2-2. If PPF2 is the relevant production possibilities frontier, then point __________ illustrates productive inefficiency.

Accepted Answer

A) A 
B) B 
C) C 
D) J 
E) a, b, or c 
A) A 
B) B 
C) C 
D) J 
E) a, b, or c

Question 11

In a situation where two goods can be produced by two different people, it is possible for one person to have a comparative advantage in the production of both goods and the other person to have the comparative advantage in the production of neither good.

Accepted Answer

A) True 
 B)False

Question 12

An economy can produce either of these two combinations of goods X and Y: 1,000X and 0Y or 400Y and 0X. Furthermore, the opportunity cost between the two goods is always constant. Which of the following combinations of the two goods, X and Y, lies on the economy's production possibilities frontier?

Accepted Answer

A) 700 units of X and 280 units of Y 
B) 600 units of X and 250 units of Y 
C) 400 units of X and 150 units of Y 
D) 90 units of X and 360 units of Y 
E) 300 units of X and 280 units of Y 
A) 700 units of X and 280 units of Y 
B) 600 units of X and 250 units of Y 
C) 400 units of X and 150 units of Y 
D) 90 units of X and 360 units of Y 
E) 300 units of X and 280 units of Y

Question 13

If an economy can produce a maximum of 100 units of good X and the opportunity cost of 1X is always 5Y, then what is the maximum number of units of good Y the economy can produce?

Accepted Answer

A) 250 
B) 100 
C) 20 
D) 500 
E) none of the above 
A) 250 
B) 100 
C) 20 
D) 500 
E) none of the above

Question 14

Exhibit 2-5
  
-Refer to Exhibit 2-5. The opportunity cost of moving from point D to point C is

Accepted Answer

A) 5,000 televisions. 
B) 5,000 fax machines. 
C) 10,000 televisions. 
D) 10,000 fax machines. 
A) 5,000 televisions. 
B) 5,000 fax machines. 
C) 10,000 televisions. 
D) 10,000 fax machines.

Question 15

The economy moves from point A, where it produces 100 units of X and 200 units of Y, to point B, where it produces 200 units of X and 150 units of Y. It follows that

Accepted Answer

A) point A is a productive inefficient point. 
B) point A may be a productive inefficient point. 
C) point A may be a productive efficient point. 
D) point B is a productive efficient point. 
E) b and c 
A) point A is a productive inefficient point. 
B) point A may be a productive inefficient point. 
C) point A may be a productive efficient point. 
D) point B is a productive efficient point. 
E) b and c

Question 16

Exhibit 2-5
  
-Refer to Exhibit 2-5. The opportunity cost of moving from point A to point B is approximately

Accepted Answer

A) 5,000 televisions. 
B) 5,000 fax machines. 
C) 10,000 televisions. 
D) 10,000 fax machines. 
A) 5,000 televisions. 
B) 5,000 fax machines. 
C) 10,000 televisions. 
D) 10,000 fax machines.

Question 17

Exhibit 2-9
  
-Refer to Exhibit 2-9. For Alex, the opportunity cost of producing one unit of good A is ____________ unit(s) of good B.

Accepted Answer

A) 3.00 
B) 0.33 
C) 0.75 
D) 1.33 
A) 3.00 
B) 0.33 
C) 0.75 
D) 1.33

Question 18

Exhibit 2-2
  
-Refer to Exhibit 2-2. The production possibilities frontiers shown in this exhibit depict _______________ opportunity costs.

Accepted Answer

A) constant 
B) increasing 
C) decreasing 
D) There is not enough information provided to answer this question. 
A) constant 
B) increasing 
C) decreasing 
D) There is not enough information provided to answer this question.

Question 19

Which scenario below most accurately describes the process by which a technological change can affect employment patterns across industries?

Accepted Answer

A) A technological advance makes it possible to produce more of good X with less labor.As a result, labor is released from producing good X.Some of this labor ends up producing goods Y and Z. 
B) A technological advance makes it possible to produce less of good X with less labor.As a result, labor is released from producing good X.Some of this labor ends up producing good Y. 
C) A technological advance makes it possible to produce more of good X with more labor.As a result, more labor is needed to produce good X.There is less labor available to produce goods Y and Z. 
D) A technological advance makes it possible to produce more of good X with less labor.As a result, labor becomes more important to the production of good X.More labor ends up producing good X. 
E) none of the above 
A) A technological advance makes it possible to produce more of good X with less labor.As a result, labor is released from producing good X.Some of this labor ends up producing goods Y and Z. 
B) A technological advance makes it possible to produce less of good X with less labor.As a result, labor is released from producing good X.Some of this labor ends up producing good Y. 
C) A technological advance makes it possible to produce more of good X with more labor.As a result, more labor is needed to produce good X.There is less labor available to produce goods Y and Z. 
D) A technological advance makes it possible to produce more of good X with less labor.As a result, labor becomes more important to the production of good X.More labor ends up producing good X. 
E) none of the above

Question 20

Consider two straight-line PPFs. They have the same vertical intercept, but curve I is flatter than curve II. The opportunity cost of producing the good on the horizontal axis

Accepted Answer

A) is greater along curve I. 
B) is greater along curve II. 
C) is the same along both curves. 
D) cannot be compared for the two curves without more information. 
A) is greater along curve I. 
B) is greater along curve II. 
C) is the same along both curves. 
D) cannot be compared for the two curves without more information.

Exam 2: Production Possibilities Frontier Framework

Exhibit 2-8 -Refer to Exhibit 2-8. Who has the comparative advantage in the production of good Y?

With respect to a PPF for goods X and Y, productive efficiency implies that in order to produce more of good X there will be a reduction in production of good Y.

​ Exhibit 2-10 ​ ​ ​ ​ -Refer Exhibit 2-10. Which of the following statements is true?

If resources are better suited toward the production of one good than toward another good, then the PPF for those two goods is

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

Economic growth causes the PPF to

Suppose the economy goes from a point on its production possibilities frontier (PPF) to a point below that PPF. Assuming that the PPF has not shifted, this could be due to

Exhibit 2-5 -Refer to Exhibit 2-5. "In order to produce one more television set, we must forfeit the production of one fax machine." This statement describes a movement from

Exhibit 2-6 -Refer to Exhibit 2-6. Which graph depicts a discovery of a new cheap source of energy that assists in the production of both good X and good Y?

Exhibit 2-2 -Refer to Exhibit 2-2. If PPF2 is the relevant production possibilities frontier, then point __________ illustrates productive inefficiency.

In a situation where two goods can be produced by two different people, it is possible for one person to have a comparative advantage in the production of both goods and the other person to have the comparative advantage in the production of neither good.

An economy can produce either of these two combinations of goods X and Y: 1,000X and 0Y or 400Y and 0X. Furthermore, the opportunity cost between the two goods is always constant. Which of the following combinations of the two goods, X and Y, lies on the economy's production possibilities frontier?

If an economy can produce a maximum of 100 units of good X and the opportunity cost of 1X is always 5Y, then what is the maximum number of units of good Y the economy can produce?

Exhibit 2-5 -Refer to Exhibit 2-5. The opportunity cost of moving from point D to point C is

The economy moves from point A, where it produces 100 units of X and 200 units of Y, to point B, where it produces 200 units of X and 150 units of Y. It follows that

Exhibit 2-5 -Refer to Exhibit 2-5. The opportunity cost of moving from point A to point B is approximately

Exhibit 2-9 -Refer to Exhibit 2-9. For Alex, the opportunity cost of producing one unit of good A is ____________ unit(s) of good B.

Exhibit 2-2 -Refer to Exhibit 2-2. The production possibilities frontiers shown in this exhibit depict _______________ opportunity costs.

Which scenario below most accurately describes the process by which a technological change can affect employment patterns across industries?

Consider two straight-line PPFs. They have the same vertical intercept, but curve I is flatter than curve II. The opportunity cost of producing the good on the horizontal axis

What Economics Is About

Supply and Demand Theory

Prices Free Controlled and Relative

Supply Demand and Price Applications

Macroeconomic Measurements Part I Prices and Unemployment

Macroeconomic Measurements Part II Gdp and Real Gdp

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self Regulating Economy

Keynesian Macroeconomics and Economic Instability a Critique of the Self Regulating Economy

Fiscal Policy and the Federal Budget

Money Banking and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth Resources Technology Ideas and Institutions

Debates in Macroeconomics Over the Role and Effects of Government

Elasticity

Consumer Choice and Behavioral Economics

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition Oligopoly and Game Theory

Government and Product Markets Antitrust and Regulation

Factor Markets With Emphasis on the Labor Market

Wages Unions and Labor

The Distribution of Income and Poverty

Interest Rent and Profit

Market Failure Externalities Public Goods and Asymmetric Information

Public Choice and Special Interest Group Politics

Building Theories to Explain Everyday Life From Observations to Questions to Theories to Predictions

International Trade

International Finance

The Economic Case for and Against Government Five Topics Considered

Stocks Bonds Futures and Options

Filters

Exhibit 2-10 -Refer Exhibit 2-10. Which of the following statements is true?

Exhibit 2-2 -Refer to Exhibit 2-2. If PPF₂ is the relevant production possibilities frontier, then point __________ illustrates productive inefficiency.