Question 1

Exhibit 2-9
  
-Refer to Exhibit 2-9. Who has the comparative advantage in the production of good B?

Accepted Answer

A) Alex 
B) Adam 
C) Both Alex and Adam 
D) Neither Alex nor Adam 
A) Alex 
B) Adam 
C) Both Alex and Adam 
D) Neither Alex nor Adam

Question 2

Production possibilities frontiers (PPFs) can shift outward, but they do not shift inward.

Accepted Answer

A) True 
 B)False

Question 3

If a society's unemployment rate rises from 5 percent to 8 percent, the result will be a leftward shift of the society's PPF.

Accepted Answer

A) True 
 B)False

Question 4

Suppose Andrea is taking just two courses and is at a point on her PPF of grades for those two courses. Now this PPF shifts inward and Andrea moves to a point on the new PPF. Which of the following would be impossible after her PPF has shifted inward compared to before the PPF shifted?

Accepted Answer

A) both of her grades to fall 
B) both of her grades to rise 
C) one of her grades to rise and the other grade to fall 
D) one of her grades to fall while the other grade stays constant 
A) both of her grades to fall 
B) both of her grades to rise 
C) one of her grades to rise and the other grade to fall 
D) one of her grades to fall while the other grade stays constant

Question 5

Exhibit 2-1
  
-Refer to Exhibit 2-1. The movement from point A to point B is a movement from

Accepted Answer

A) a productive efficient point to a productive inefficient point. 
B) a point with more guns and less butter to a point with more butter and even more guns. 
C) a productive efficient point to another productive efficient point. 
D) a productive inefficient point to a productive efficient point. 
A) a productive efficient point to a productive inefficient point. 
B) a point with more guns and less butter to a point with more butter and even more guns. 
C) a productive efficient point to another productive efficient point. 
D) a productive inefficient point to a productive efficient point.

Question 6

A society is productive inefficient when

Accepted Answer

A) it produces at a point inside (below) its PPF. 
B) it does not produce the maximum output with its given resources and technology. 
C) it can produce more of one good without giving up some of another good. 
D) both a and b 
E) all of the above 
A) it produces at a point inside (below) its PPF. 
B) it does not produce the maximum output with its given resources and technology. 
C) it can produce more of one good without giving up some of another good. 
D) both a and b 
E) all of the above

Question 7

What is the reason for the law of increasing opportunity costs?

Accepted Answer

A) There is no reason: it is just one of the laws of economics. 
B) Resources have varying abilities and those with lower opportunity costs of producing a good will be used to produce it before resources with higher opportunity costs produce it. 
C) The price of a good rises as more of it is demanded. 
D) As more of a good is produced, the taxes applied to the production of the good rise. 
E) c and d 
A) There is no reason: it is just one of the laws of economics. 
B) Resources have varying abilities and those with lower opportunity costs of producing a good will be used to produce it before resources with higher opportunity costs produce it. 
C) The price of a good rises as more of it is demanded. 
D) As more of a good is produced, the taxes applied to the production of the good rise. 
E) c and d

Question 8

Through war, many of the factories in country 1 are destroyed and many of its people are killed. As a result, the country's

Accepted Answer

A) production possibilities frontier (PPF) after the war has probably shifted to the right compared to its PPF prior to the war. 
B) PPF after the war has probably shifted to the left compared to its PPF prior to the war. 
C) PPF after the war is probably the same PPF as before the war. 
D) ability to produce goods and services has increased. 
E) b and d 
A) production possibilities frontier (PPF) after the war has probably shifted to the right compared to its PPF prior to the war. 
B) PPF after the war has probably shifted to the left compared to its PPF prior to the war. 
C) PPF after the war is probably the same PPF as before the war. 
D) ability to produce goods and services has increased. 
E) b and d

Question 9

If there is an increase in the amount of good B foregone as every additional unit of good A is produced, the PPF between goods A and B would

Accepted Answer

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

Question 10

The endpoints of an economy's production possibilities frontier (PPF) for goods X and Y are: (2,000X, 0Y) and (0X, 500Y). Furthermore, the opportunity cost between these two goods is always constant. Which of the following combinations of the two goods, X and Y, lies on the economy's PPF?

Accepted Answer

A) 400 units of X and 200 units of Y 
B) 600 units of X and 250 units of Y 
C) 400 units of X and 150 units of Y 
D) 1,000 units of X and 250 units of Y 
E) 300 units of X and 150 units of Y 
A) 400 units of X and 200 units of Y 
B) 600 units of X and 250 units of Y 
C) 400 units of X and 150 units of Y 
D) 1,000 units of X and 250 units of Y 
E) 300 units of X and 150 units of Y

Question 11

Exhibit 2-1
  
-Refer to Exhibit 2-1. The PPF illustrates

Accepted Answer

A) constant opportunity costs between guns and butter. 
B) that guns are more important than butter. 
C) increasing opportunity costs between guns and butter. 
D) the opportunity cost of one unit of guns is four units of butter. 
E) none of the above 
A) constant opportunity costs between guns and butter. 
B) that guns are more important than butter. 
C) increasing opportunity costs between guns and butter. 
D) the opportunity cost of one unit of guns is four units of butter. 
E) none of the above

Question 12

The economy can produce 15X and 15Y, 10X and 20Y, 5X and 25Y, or 0X and 30Y. It follows that opportunity cost of 1X is ___Y.

Accepted Answer

A) 4.0 
B) 5.0 
C) 2.5 
D) 1.0 
E) none of the above 
A) 4.0 
B) 5.0 
C) 2.5 
D) 1.0 
E) none of the above

Question 13

​
Exhibit 2-10
​
   ​
​
   ​
-Refer Exhibit 2-10. Person A has the comparative advantage in the production of _____________ and person B has the comparative advantage in the production of __________________.

Accepted Answer

A) X; Y 
B) Y; X 
C) neither good X nor good Y; neither good X nor good Y 
D) both good X and good Y; neither good X nor good Y 
E) ​neither good X nor good Y; both good X and good Y 
A) X; Y 
B) Y; X 
C) neither good X nor good Y; neither good X nor good Y 
D) both good X and good Y; neither good X nor good Y 
E) ​neither good X nor good Y; both good X and good Y

Question 14

Country 1 produces two goods, A and B. Country 2 produces the same two goods. Currently, country 1 produces 100A and 200B and country 2 produces 300A and 700B. Which of the following statements is true?

Accepted Answer

A) If country 1 is on its production possibilities frontier, then country 2 must be on its PPF, too. 
B) The PPF for country 1 is necessarily closer to the origin (or further to the left) than the PPF for country 2. 
C) If country 1 is productive inefficient, then so is country 2. 
D) Country 2 is operating on its PPF, but country 1 is clearly not operating on its PPF. 
E) none of the above 
A) If country 1 is on its production possibilities frontier, then country 2 must be on its PPF, too. 
B) The PPF for country 1 is necessarily closer to the origin (or further to the left) than the PPF for country 2. 
C) If country 1 is productive inefficient, then so is country 2. 
D) Country 2 is operating on its PPF, but country 1 is clearly not operating on its PPF. 
E) none of the above

Question 15

A productive efficient society

Accepted Answer

A) produces at a point on its PPF. 
B) can produce more of one good only by giving up some of another good. 
C) cannot produce unlimited amounts of a good. 
D) still has to make choices. 
E) all of the above 
A) produces at a point on its PPF. 
B) can produce more of one good only by giving up some of another good. 
C) cannot produce unlimited amounts of a good. 
D) still has to make choices. 
E) all of the above

Question 16

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

Accepted Answer

A) 15,000 televisions. 
B) 15,000 fax machines. 
C) 10,000 televisions. 
D) 20,000 fax machines. 
A) 15,000 televisions. 
B) 15,000 fax machines. 
C) 10,000 televisions. 
D) 20,000 fax machines.

Question 17

Consider two points on a PPF: point A, at which there are 500 oranges and 100 apricots, and point B, at which there are 501 oranges and 95 apricots. If the economy is currently at point B, the opportunity cost of moving to point A is

Accepted Answer

A) 5 apricots. 
B) 1 orange. 
C) 95 apricots. 
D) 500 oranges. 
A) 5 apricots. 
B) 1 orange. 
C) 95 apricots. 
D) 500 oranges.

Question 18

Exhibit 2-5
  
-Refer to Exhibit 2-5. The economy is currently operating at point F. The opportunity cost of moving to point E is approximately ____________ televisions.

Accepted Answer

A) 35 
B) 55 
C) zero 
D) 40 
A) 35 
B) 55 
C) zero 
D) 40

Question 19

Exhibit 2-9
  
-Refer to Exhibit 2-9. For Adam, 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 20

Suppose Andrea is taking just two courses and is at a point inside (or below) her PPF of grades for those two courses. If Andrea changes her work habits then it is impossible for

Accepted Answer

A) either one of her grades to rise. 
B) both of her grades to rise. 
C) both of her grades to fall. 
D) either one of her grades to rise while the other grade remains constant. 
E) none of the above is impossible in this situation 
A) either one of her grades to rise. 
B) both of her grades to rise. 
C) both of her grades to fall. 
D) either one of her grades to rise while the other grade remains constant. 
E) none of the above is impossible in this situation

Exam 2: Production Possibilities Frontier Framework

Exhibit 2-9 -Refer to Exhibit 2-9. Who has the comparative advantage in the production of good B?

Production possibilities frontiers (PPFs) can shift outward, but they do not shift inward.

If a society's unemployment rate rises from 5 percent to 8 percent, the result will be a leftward shift of the society's PPF.

Suppose Andrea is taking just two courses and is at a point on her PPF of grades for those two courses. Now this PPF shifts inward and Andrea moves to a point on the new PPF. Which of the following would be impossible after her PPF has shifted inward compared to before the PPF shifted?

Exhibit 2-1 -Refer to Exhibit 2-1. The movement from point A to point B is a movement from

A society is productive inefficient when

What is the reason for the law of increasing opportunity costs?

Through war, many of the factories in country 1 are destroyed and many of its people are killed. As a result, the country's

If there is an increase in the amount of good B foregone as every additional unit of good A is produced, the PPF between goods A and B would

The endpoints of an economy's production possibilities frontier (PPF) for goods X and Y are: (2,000X, 0Y) and (0X, 500Y). Furthermore, the opportunity cost between these two goods is always constant. Which of the following combinations of the two goods, X and Y, lies on the economy's PPF?

Exhibit 2-1 -Refer to Exhibit 2-1. The PPF illustrates

The economy can produce 15X and 15Y, 10X and 20Y, 5X and 25Y, or 0X and 30Y. It follows that opportunity cost of 1X is ___Y.

​ Exhibit 2-10 ​ ​ ​ ​ -Refer Exhibit 2-10. Person A has the comparative advantage in the production of _____________ and person B has the comparative advantage in the production of __________________.

Country 1 produces two goods, A and B. Country 2 produces the same two goods. Currently, country 1 produces 100A and 200B and country 2 produces 300A and 700B. Which of the following statements is true?

A productive efficient society

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

Consider two points on a PPF: point A, at which there are 500 oranges and 100 apricots, and point B, at which there are 501 oranges and 95 apricots. If the economy is currently at point B, the opportunity cost of moving to point A is

Exhibit 2-5 -Refer to Exhibit 2-5. The economy is currently operating at point F. The opportunity cost of moving to point E is approximately ____________ televisions.

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

Suppose Andrea is taking just two courses and is at a point inside (or below) her PPF of grades for those two courses. If Andrea changes her work habits then it is impossible for

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Exhibit 2-10 -Refer Exhibit 2-10. Person A has the comparative advantage in the production of _ and person B has the comparative advantage in the production of ______.