Exam 2: The Economic Problem

A situation in which some resources are NOT fully utilized is represented in a production possibilities frontier diagram by

In an eight-hour day, Andy can produce either 24 loaves of bread or 8 pounds of butter. In an eight-hour day, Bob can produce either 8 loaves of bread or 8 pounds of butter. Andy has a comparative advantage in the production of

Increasing opportunity cost while moving along a production possibilities frontier is the result of

-In 2012, Country X and Country Y had the same production possibilities, illustrated in the figure above. Country X chose to produce at point A, while country Y chose to produce at point B. In 2018, most likely, Country X will be at point such as ________ while Country Y will be at point such as ________.

-In the above figure, if 2 million computers are produced per year then the ________ should be produced to achieve the allocatively efficient use of resources.

In one week Alice can produce 5 pairs of shoes or 4 bookshelves while Roger can produce 10 pairs of shoes or 6 bookshelves. Alice should specialize in the production of

Country A is a high income country, Country B is a middle income country, and Country C is a low income country. Which of the following is most likely to be true?

The most anyone is willing to pay for another purse is $30. Currently the price of a purse is $40, and the cost of producing another purse is $50. The marginal benefit of a purse is

When the production possibilities frontier is bowed outwards, the opportunity cost of producing more of one good

When the opportunity cost of producing more of a good is increasing, the marginal cost of producing more of the good is

Two social institutions that are essential for trade to be organized are

Resource use is allocatively efficient when marginal benefit is

-The above table shows production combinations on a country's production possibilities frontier. A movement from ________ involves the greatest opportunity cost of increasing the production of good Y.

The kitchen manager at an Italian restaurant is deciding what assignments he should give to his two cooks, John and David. John can make 25 pizzas or 40 servings of pasta per hour and David can make 20 pizzas or 30 servings of pasta. Which of the following should be the manager's choice?

-The opportunity cost of moving from point a to point b in the above figure is

-In the figure above, the point labeled C in the production possibilities frontier

Suppose that in an hour Joe can prepare 10 sandwiches or 5 pizzas. The opportunity cost of Joe producing one sandwich is

-The above table shows production combinations on a country's production possibilities frontier. Which of the following points signifies efficient production?

Resource use is allocatively efficient

-In the above figure, when 2,000 bicycles are produced each month, we can see that