Question 1

The fact of increasing opportunity costs means that a production possibilities frontier will

Accepted Answer

A)  be a straight line. 
B)  reach a maximum and then gradually decrease. 
C)  bow outward. 
D)  shift outward over time. 
A)  be a straight line. 
B)  reach a maximum and then gradually decrease. 
C)  bow outward. 
D)  shift outward over time.

Question 2

Country A Country B
  
-In the table above, country A is producing 4 units of X and 8 units of Y and country B is producing 4 units of X and 6 units of Y. The opportunity cost of producing more of

Accepted Answer

A)  good X is the same for both countries. 
B)  good Y is the same for both countries. 
C)  good X is lower in country A. 
D)  good Y is lower in country A. 
A)  good X is the same for both countries. 
B)  good Y is the same for both countries. 
C)  good X is lower in country A. 
D)  good Y is lower in country A.

Question 3

Resource use is allocatively efficient

Accepted Answer

A)  when marginal benefit equals marginal cost. 
B)  whenever marginal benefit exceeds marginal cost. 
C)  whenever marginal cost exceeds marginal benefit. 
D)  when the maximum possible quantity is being produced. 
A)  when marginal benefit equals marginal cost. 
B)  whenever marginal benefit exceeds marginal cost. 
C)  whenever marginal cost exceeds marginal benefit. 
D)  when the maximum possible quantity is being produced.

Question 4

-In the table above, the marginal benefit of the 4 millionth television set is

Accepted Answer

A)  negative 0.5 computers per television set. 
B)  0.25 computers per television set. 
C)  0.5 computers per television set. 
D)  1.0 computer per television set. 
A)  negative 0.5 computers per television set. 
B)  0.25 computers per television set. 
C)  0.5 computers per television set. 
D)  1.0 computer per television set.

Question 5

-In the figure above, the allocatively efficient output of computers is

Accepted Answer

A)  2 million per year. 
B)  3 million per year. 
C)  4 million per year. 
D)  the largest amount possible. 
A)  2 million per year. 
B)  3 million per year. 
C)  4 million per year. 
D)  the largest amount possible.

Question 6

-Employees at Bank of America are good at providing banking services and workers at Ben & Jerry's are good at making ice cream. The figure above shows the marginal cost and marginal benefit curves for ice cream. If 3 million gallons of ice cream are produced, marginal cost ________ marginal benefit and ________ produced.

Accepted Answer

A)  exceeds; too much ice cream is 
B)  is less than; too much ice cream is 
C)  exceeds; not enough ice cream is 
D)  is less than; not enough banking services are 
A)  exceeds; too much ice cream is 
B)  is less than; too much ice cream is 
C)  exceeds; not enough ice cream is 
D)  is less than; not enough banking services are

Question 7

Suppose that when NBC produces 1 new drama series in a season it gives up the chance to produce 3 new reality shows. This means that

Accepted Answer

A)  the opportunity cost of a new drama series is 1/3 of a new reality show. 
B)  the opportunity cost of a 1 new reality show is 1/3 of a new drama series. 
C)  NBC has a comparative advantage in producing new drama series. 
D)  NBC has a comparative advantage in producing new reality shows. 
A)  the opportunity cost of a new drama series is 1/3 of a new reality show. 
B)  the opportunity cost of a 1 new reality show is 1/3 of a new drama series. 
C)  NBC has a comparative advantage in producing new drama series. 
D)  NBC has a comparative advantage in producing new reality shows.

Question 8

-In the above figure, curve b shows the

Accepted Answer

A)  bottles of soda that people are willing to forgo to get another bicycle. 
B)  bottles of soda that people must forgo to get another bicycle. 
C)  benefits of producing more bicycles is greater than the benefits of producing more soda. 
D)  benefits of producing more soda is greater than the benefits of producing more bicycles. 
A)  bottles of soda that people are willing to forgo to get another bicycle. 
B)  bottles of soda that people must forgo to get another bicycle. 
C)  benefits of producing more bicycles is greater than the benefits of producing more soda. 
D)  benefits of producing more soda is greater than the benefits of producing more bicycles.

Question 9

"If an economy is producing at a point on its PPF, it has achieved allocative efficiency." True or false? Explain.

Accepted Answer

If an economy is producing at a point on

Question 10

Moving from one point on the production possibilities frontier to another

Accepted Answer

A)  involves a tradeoff but does not incur an opportunity cost. 
B)  involves an opportunity cost but no tradeoff. 
C)  involves a tradeoff and incurs an opportunity cost. 
D)  involves no tradeoff but it does incur an opportunity cost. 
A)  involves a tradeoff but does not incur an opportunity cost. 
B)  involves an opportunity cost but no tradeoff. 
C)  involves a tradeoff and incurs an opportunity cost. 
D)  involves no tradeoff but it does incur an opportunity cost.

Question 11

When the production possibilities frontier bows outward from the origin

Accepted Answer

A)  some of society's resources are unemployed. 
B)  opportunity costs are constant. 
C)  opportunity costs are increasing. 
D)  opportunity costs are decreasing. 
A)  some of society's resources are unemployed. 
B)  opportunity costs are constant. 
C)  opportunity costs are increasing. 
D)  opportunity costs are decreasing.

Question 12

Marginal benefit is the benefit

Accepted Answer

A)  that your activity provides to someone else. 
B)  of producing a good or service when the total benefit from the good or service exceeds its total cost. 
C)  that is received from consuming one more unit of a good or service. 
D)  of consuming another good or service divided by the total number of goods or services produced. 
A)  that your activity provides to someone else. 
B)  of producing a good or service when the total benefit from the good or service exceeds its total cost. 
C)  that is received from consuming one more unit of a good or service. 
D)  of consuming another good or service divided by the total number of goods or services produced.

Question 13

An expansion of the production possibilities frontier is

Accepted Answer

A)  called economic growth. 
B)  proof that scarcity is not a binding constraint. 
C)  a free gift of nature. 
D)  something that has occurred only rarely in history. 
A)  called economic growth. 
B)  proof that scarcity is not a binding constraint. 
C)  a free gift of nature. 
D)  something that has occurred only rarely in history.

Question 14

-The table above lists seven points on the production possibilities frontier for pizza and CDs. Graph the PPF. What is the opportunity cost of producing the first four pizzas? What is the opportunity cost of producing the 10th pizza. What is the opportunity cost of producing the first 12 CDs? What is the opportunity cost of producing the 26th CD?

Accepted Answer

@#IMG-DLM& The PPF graph is shown above. The oppor

Question 15

In an hour, Andy can make either 5 pizzas or 12 pies and Chris can make either 6 pizzas or 18 pies. ________ advantage in making pizzas.

Accepted Answer

A)  Andy has an absolute 
B)  Andy has a comparative 
C)  Chris has a comparative 
D)  None of the above answers is correct. 
A)  Andy has an absolute 
B)  Andy has a comparative 
C)  Chris has a comparative 
D)  None of the above answers is correct.

Question 16

When resources are assigned to inappropriate tasks, that is, tasks for which they are not the best match, the result will be producing at a point

Accepted Answer

A)  where the slope of the PPF is positive. 
B)  where the slope of the PPF is zero. 
C)  inside the PPF. 
D)  outside the PPF. 
A)  where the slope of the PPF is positive. 
B)  where the slope of the PPF is zero. 
C)  inside the PPF. 
D)  outside the PPF.

Question 17

-In the figure above, Joe is producing at point A. Joe's opportunity cost of producing one shirt is

Accepted Answer

A)  5/3 of a pair of pants per shirt. 
B)  3/5 of a pair of pants per shirt. 
C)  5 pairs of pants per shirt. 
D)  2 pairs of pants per shirt. 
A)  5/3 of a pair of pants per shirt. 
B)  3/5 of a pair of pants per shirt. 
C)  5 pairs of pants per shirt. 
D)  2 pairs of pants per shirt.

Question 18

A nation can produce at a point outside its PPF

Accepted Answer

A)  when it trades with other nations. 
B)  when it produces inefficiently. 
C)  when its PPF is bowed out. 
D)  never. 
A)  when it trades with other nations. 
B)  when it produces inefficiently. 
C)  when its PPF is bowed out. 
D)  never.

Question 19

-The above table shows production points on Sweet-Tooth Land's production possibilities frontier. A movement from ________ represents the greatest opportunity cost of increasing cola production.

Accepted Answer

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

Question 20

Markets are best defined as

Accepted Answer

A)  arrangements where buyers and sellers get together to buy and sell. 
B)  specific geographic locations where people get together to buy and sell. 
C)  hypothetical constructs used to analyze how people form their tastes and preferences. 
D)  places where people can inspect goods and services carefully. 
A)  arrangements where buyers and sellers get together to buy and sell. 
B)  specific geographic locations where people get together to buy and sell. 
C)  hypothetical constructs used to analyze how people form their tastes and preferences. 
D)  places where people can inspect goods and services carefully.

The fact of increasing opportunity costs means that a production possibilities frontier will

Country A Country B -In the table above, country A is producing 4 units of X and 8 units of Y and country B is producing 4 units of X and 6 units of Y. The opportunity cost of producing more of

Resource use is allocatively efficient

-In the table above, the marginal benefit of the 4 millionth television set is

-In the figure above, the allocatively efficient output of computers is

Suppose that when NBC produces 1 new drama series in a season it gives up the chance to produce 3 new reality shows. This means that

-In the above figure, curve b shows the

"If an economy is producing at a point on its PPF, it has achieved allocative efficiency." True or false? Explain.

Moving from one point on the production possibilities frontier to another

When the production possibilities frontier bows outward from the origin

Marginal benefit is the benefit

An expansion of the production possibilities frontier is

In an hour, Andy can make either 5 pizzas or 12 pies and Chris can make either 6 pizzas or 18 pies. ________ advantage in making pizzas.

When resources are assigned to inappropriate tasks, that is, tasks for which they are not the best match, the result will be producing at a point

-In the figure above, Joe is producing at point A. Joe's opportunity cost of producing one shirt is

A nation can produce at a point outside its PPF

-The above table shows production points on Sweet-Tooth Land's production possibilities frontier. A movement from ________ represents the greatest opportunity cost of increasing cola production.

Markets are best defined as

What Is Economics

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 2: The Economic Problem

The fact of increasing opportunity costs means that a production possibilities frontier will

Country A Country B -In the table above, country A is producing 4 units of X and 8 units of Y and country B is producing 4 units of X and 6 units of Y. The opportunity cost of producing more of

Resource use is allocatively efficient

-In the table above, the marginal benefit of the 4 millionth television set is

-In the figure above, the allocatively efficient output of computers is

Suppose that when NBC produces 1 new drama series in a season it gives up the chance to produce 3 new reality shows. This means that

-In the above figure, curve b shows the

"If an economy is producing at a point on its PPF, it has achieved allocative efficiency." True or false? Explain.

Moving from one point on the production possibilities frontier to another

When the production possibilities frontier bows outward from the origin

Marginal benefit is the benefit

An expansion of the production possibilities frontier is

In an hour, Andy can make either 5 pizzas or 12 pies and Chris can make either 6 pizzas or 18 pies. ________ advantage in making pizzas.

When resources are assigned to inappropriate tasks, that is, tasks for which they are not the best match, the result will be producing at a point

-In the figure above, Joe is producing at point A. Joe's opportunity cost of producing one shirt is

A nation can produce at a point outside its PPF

-The above table shows production points on Sweet-Tooth Land's production possibilities frontier. A movement from ________ represents the greatest opportunity cost of increasing cola production.

Markets are best defined as

What Is Economics

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters