Question 1

With a constant opportunity cost between goods A and B, the PPF for goods A and B would

Accepted Answer

A) be a straight line. 
B) be a bowed-outward line. 
C) be a bowed-inward line. 
D) not exist. 
A) be a straight line. 
B) be a bowed-outward line. 
C) be a bowed-inward line. 
D) not exist.

Question 2

Exhibit 2-3
  
-Refer to Exhibit 2-3. If PPF1 is the relevant production possibilities frontier, a shift to PPF2 may depict

Accepted Answer

A) economic growth. 
B) an increase in resources. 
C) an increase in technology. 
D) both b and c 
E) all of the above 
A) economic growth. 
B) an increase in resources. 
C) an increase in technology. 
D) both b and c 
E) all of the above

Question 3

Exhibit 2-6
  
-Refer to Exhibit 2-6. Which graph best depicts the consequence of a large-scale natural disaster?

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 4

The law of increasing opportunity cost helps to explain why PPF's are typically bowed-outward.

Accepted Answer

A) True 
 B)False

Question 5

Carlos can produce the following combinations of X and Y: 10X and 10Y, 5X and 15Y, and 0X and 20Y. The opportunity cost of one unit of X for Carlos is

Accepted Answer

A) 1 unit of Y. 
B) 2 units of Y. 
C) 1/2 unit of Y. 
D) 1/4 unit of Y. 
E) none of the above 
A) 1 unit of Y. 
B) 2 units of Y. 
C) 1/2 unit of Y. 
D) 1/4 unit of Y. 
E) none of the above

Question 6

Exhibit 2-3
  
-Refer to Exhibit 2-3. If PPF1 is the relevant production possibilities frontier, society can only choose to produce at a point that lies

Accepted Answer

A) below PPF1. 
B) below or on PPF1. 
C) on PPF2. 
D) none of the above 
A) below PPF1. 
B) below or on PPF1. 
C) on PPF2. 
D) none of the above

Question 7

Exhibit 2-6
  
-Refer to Exhibit 2-6. Which graph depicts society's choice to produce more of good X and less of 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 8

Productive efficiency implies that

Accepted Answer

A) all consumers' wants are satisfied. 
B) no advance in technology will occur in the future. 
C) the attainable region is greater than the unattainable region. 
D) gains are impossible in one area without losses in another. 
E) all of the above 
A) all consumers' wants are satisfied. 
B) no advance in technology will occur in the future. 
C) the attainable region is greater than the unattainable region. 
D) gains are impossible in one area without losses in another. 
E) all of the above

Question 9

Productive efficiency implies

Accepted Answer

A) the possibility of gains in one area without losses in another. 
B) that more output has been produced. 
C) the impossibility of gains in one area without losses in another. 
D) that prices are stable. 
E) c and d 
A) the possibility of gains in one area without losses in another. 
B) that more output has been produced. 
C) the impossibility of gains in one area without losses in another. 
D) that prices are stable. 
E) c and d

Question 10

If Luke can bake bread at a lower opportunity cost than Jason, and Jason can produce paintings at a lower opportunity cost than Luke, it follows that

Accepted Answer

A) Luke has a comparative advantage in paintings and Jason has a comparative advantage in baking bread. 
B) Both Luke and Jason have a comparative advantage in baking bread. 
C) Both Luke and Jason have a comparative disadvantage in producing paintings. 
D) Luke has a comparative advantage in baking bread and Jason has a comparative advantage in producing paintings. 
E) There is not enough information to answer the question. 
A) Luke has a comparative advantage in paintings and Jason has a comparative advantage in baking bread. 
B) Both Luke and Jason have a comparative advantage in baking bread. 
C) Both Luke and Jason have a comparative disadvantage in producing paintings. 
D) Luke has a comparative advantage in baking bread and Jason has a comparative advantage in producing paintings. 
E) There is not enough information to answer the question.

Question 11

Why is the production possibilities frontier (PPF) typically bowed-outward? Under what circumstances would the PPF be a straight line?

Accepted Answer

The PPF is typically bowed-outward due t

Question 12

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

Accepted Answer

A) 2.00 
B) 1.00 
C) 10.00 
D) 0.50 
A) 2.00 
B) 1.00 
C) 10.00 
D) 0.50

Question 13

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

Accepted Answer

A) 2.00 
B) 1.00 
C) 10.00 
D) 0.50 
A) 2.00 
B) 1.00 
C) 10.00 
D) 0.50

Question 14

The law of increasing opportunity costs states that as

Accepted Answer

A) less of a good is produced, the higher the opportunity costs of producing that good. 
B) more of a good is produced, the lower the opportunity costs of producing that good. 
C) more of a good is produced, the higher the opportunity costs of producing that good. 
D) more of a good is produced, the opportunity cost of producing the good remains the same. 
E) a and b 
A) less of a good is produced, the higher the opportunity costs of producing that good. 
B) more of a good is produced, the lower the opportunity costs of producing that good. 
C) more of a good is produced, the higher the opportunity costs of producing that good. 
D) more of a good is produced, the opportunity cost of producing the good remains the same. 
E) a and b

Question 15

Exhibit 2-6
  
-Refer to Exhibit 2-6. Which graph depicts a technological breakthrough in the production of good Y only?

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 16

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) a new law that interferes with productive efficiency. 
A) a gain of resources. 
B) a loss of resources. 
C) technological improvement in the production of both goods. 
D) a new law that interferes with productive efficiency.

Question 17

Exhibit 2-7
  
-Refer to Exhibit 2-7. Which of the following statements is true?

Accepted Answer

A) Points B and D are more efficient than points A and C. 
B) If the economy's PPF is represented by PPF1, points A and B are productive efficient, while C and D are unattainable. 
C) If the economy's PPF is represented by PPF2, points C and D are productive efficient, while A and B are unattainable. 
D) both a and c 
A) Points B and D are more efficient than points A and C. 
B) If the economy's PPF is represented by PPF1, points A and B are productive efficient, while C and D are unattainable. 
C) If the economy's PPF is represented by PPF2, points C and D are productive efficient, while A and B are unattainable. 
D) both a and c

Question 18

Currently an economy is producing at a point on its production possibilities frontier for goods X and Y. It is producing 100 units of good X and the opportunity cost of producing 1X is 3Y. If good X is produced at increasing opportunity costs, then when the economy produces 120 units of good X (on the same PPF) the opportunity cost of producing 1X could be ______Y.

Accepted Answer

A) 4 
B) 2.5 
C) 2 
D) 1 
E) all of the above 
A) 4 
B) 2.5 
C) 2 
D) 1 
E) all of the above

Question 19

For each additional lamp produced, a constant opportunity cost is incurred in terms of bookshelves. This means that

Accepted Answer

A) it takes more resources to produce a lamp than a bookshelf. 
B) it takes fewer resources to produce a lamp than a bookshelf. 
C) for every lamp produced, a constant number of bookshelves is forfeited. 
D) for every lamp produced, a different number of bookshelves is forfeited. 
A) it takes more resources to produce a lamp than a bookshelf. 
B) it takes fewer resources to produce a lamp than a bookshelf. 
C) for every lamp produced, a constant number of bookshelves is forfeited. 
D) for every lamp produced, a different number of bookshelves is forfeited.

Question 20

A production possibilities frontier separates an attainable region from an unattainable region.

Accepted Answer

A) True 
 B)False

Exam 2: Production Possibilities Frontier Framework

With a constant opportunity cost between goods A and B, the PPF for goods A and B would

Exhibit 2-3 -Refer to Exhibit 2-3. If PPF1 is the relevant production possibilities frontier, a shift to PPF2 may depict

Exhibit 2-6 -Refer to Exhibit 2-6. Which graph best depicts the consequence of a large-scale natural disaster?

The law of increasing opportunity cost helps to explain why PPF's are typically bowed-outward.

Carlos can produce the following combinations of X and Y: 10X and 10Y, 5X and 15Y, and 0X and 20Y. The opportunity cost of one unit of X for Carlos is

Exhibit 2-3 -Refer to Exhibit 2-3. If PPF1 is the relevant production possibilities frontier, society can only choose to produce at a point that lies

Exhibit 2-6 -Refer to Exhibit 2-6. Which graph depicts society's choice to produce more of good X and less of good Y?

Productive efficiency implies that

Productive efficiency implies

If Luke can bake bread at a lower opportunity cost than Jason, and Jason can produce paintings at a lower opportunity cost than Luke, it follows that

Why is the production possibilities frontier (PPF) typically bowed-outward? Under what circumstances would the PPF be a straight line?

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

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

The law of increasing opportunity costs states that as

Exhibit 2-6 -Refer to Exhibit 2-6. Which graph depicts a technological breakthrough in the production of good Y only?

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 2-7 -Refer to Exhibit 2-7. Which of the following statements is true?

For each additional lamp produced, a constant opportunity cost is incurred in terms of bookshelves. This means that

A production possibilities frontier separates an attainable region from an unattainable region.

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 2-3 -Refer to Exhibit 2-3. If PPF₁ is the relevant production possibilities frontier, a shift to PPF₂ may depict

Exhibit 2-3 -Refer to Exhibit 2-3. If PPF₁ is the relevant production possibilities frontier, society can only choose to produce at a point that lies