Question 1

Suppose Joe can prepare 20 sandwiches or 10 pizzas in an hour and Beth can produce 36 sandwiches or 27 pizzas. The concept of comparative advantage concludes that

Accepted Answer

A)  Beth should produce both goods because she can produce more of both goods in an hour than can Joe. 
B)  Beth should produce sandwiches and Joe should produce pizza. 
C)  Beth should produce pizza and Joe should produce sandwiches. 
D)  Beth should produce both goods and Joe should produce sandwiches. 
A)  Beth should produce both goods because she can produce more of both goods in an hour than can Joe. 
B)  Beth should produce sandwiches and Joe should produce pizza. 
C)  Beth should produce pizza and Joe should produce sandwiches. 
D)  Beth should produce both goods and Joe should produce sandwiches.

Question 2

-The table above shows the production possibilities frontier for the nation of Isolanda.
a) Find the marginal cost of a pound of fish using the above PPF.
b) How does the marginal cost of a pound of fish change as more fish are caught?

Accepted Answer

@#IMG-DLM& a) The table above shows the marginal c

Question 3

Individuals A and B both produce good X. A has a comparative advantage in the production of good X if A

Accepted Answer

A)  has a lower opportunity cost of producing good X than has B. 
B)  has a lower opportunity cost of producing good X than of producing good Y. 
C)  can produce more units of X in a given time period than can B. 
D)  can produce X using newer technology than can B. 
A)  has a lower opportunity cost of producing good X than has B. 
B)  has a lower opportunity cost of producing good X than of producing good Y. 
C)  can produce more units of X in a given time period than can B. 
D)  can produce X using newer technology than can B.

Question 4

Technological change

Accepted Answer

A)  generates economic growth. 
B)  shifts the PPF leftward. 
C)  creates inefficiency. 
D)  Both answers A and C are correct. 
A)  generates economic growth. 
B)  shifts the PPF leftward. 
C)  creates inefficiency. 
D)  Both answers A and C are correct.

Question 5

-Refer to the production possibilities frontier in the figure above. If the country moves from point a to point c, the opportunity cost of the move is

Accepted Answer

A)  30 million capital goods. 
B)  20 million capital goods. 
C)  10 million capital goods. 
D)  10 million consumption goods. 
A)  30 million capital goods. 
B)  20 million capital goods. 
C)  10 million capital goods. 
D)  10 million consumption goods.

Question 6

Economic growth

Accepted Answer

A)  leads to less consumption in the present and increased consumption in the future. 
B)  is free. 
C)  is the major reason we face scarcity. 
D)  allows us to increase our consumption in the present and in the future. 
A)  leads to less consumption in the present and increased consumption in the future. 
B)  is free. 
C)  is the major reason we face scarcity. 
D)  allows us to increase our consumption in the present and in the future.

Question 7

-The above figure illustrates Mary's production possibilities frontier. Which of the following movements show opportunity costs increasing?

Accepted Answer

A)  point a to point b to point c 
B)  point a to point f 
C)  point f to point a 
D)  point c to point f to point d 
A)  point a to point b to point c 
B)  point a to point f 
C)  point f to point a 
D)  point c to point f to point d

Question 8

"Allocative efficiency requires that the maximum number of people have access to all of the goods and services that our economy produces." Is this statement true or false? Explain your answer.

Accepted Answer

The statement is false. Allocative effic

Question 9

If a country must decrease current consumption to increase the amount of capital goods it produces today, then it must

Accepted Answer

A)  be using resources inefficiently today, but will be more efficient in the future. 
B)  be producing along the production possibilities frontier today and its production possibilities frontier will shift outward if it produces more capital goods. 
C)  must be producing outside the production possibilities frontier and will continue to do so in the future. 
D)  must not have private ownership of property and will have to follow planning authorities' decisions today and in the future. 
A)  be using resources inefficiently today, but will be more efficient in the future. 
B)  be producing along the production possibilities frontier today and its production possibilities frontier will shift outward if it produces more capital goods. 
C)  must be producing outside the production possibilities frontier and will continue to do so in the future. 
D)  must not have private ownership of property and will have to follow planning authorities' decisions today and in the future.

Question 10

Most students attending college pay tuition and are unable to hold a full-time job. For these students, tuition is

Accepted Answer

A)  part of the opportunity cost of going to college. So are their forgone earnings from not holding a full-time job. 
B)  part of the opportunity cost of going to college. Their forgone earnings from not holding a full-time job are not part of the opportunity cost of attending college. 
C)  not part of the opportunity cost of going to college, but their forgone earnings from not holding a full-time job are part of the opportunity cost of attending college. 
D)  not part of the opportunity cost of going to college. Neither are their forgone earnings from not holding a full-time job. 
A)  part of the opportunity cost of going to college. So are their forgone earnings from not holding a full-time job. 
B)  part of the opportunity cost of going to college. Their forgone earnings from not holding a full-time job are not part of the opportunity cost of attending college. 
C)  not part of the opportunity cost of going to college, but their forgone earnings from not holding a full-time job are part of the opportunity cost of attending college. 
D)  not part of the opportunity cost of going to college. Neither are their forgone earnings from not holding a full-time job.

Question 11

BAE, a British defense company, has the contract to produce Tornado aircraft for the Royal Air Force. BAE is producing the aircraft at the lowest possible cost. If the RAF orders one more Tornado, there will be

Accepted Answer

A)  a decrease in opportunity costs as average costs decrease. 
B)  a misallocation of resources. 
C)  an increase in opportunity cost for Tornados. 
D)  an outward shift in the PPF. 
A)  a decrease in opportunity costs as average costs decrease. 
B)  a misallocation of resources. 
C)  an increase in opportunity cost for Tornados. 
D)  an outward shift in the PPF.

Question 12

-In the figure above, a point showing an inefficient production point is point

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  D. 
A)  A. 
B)  B. 
C)  C. 
D)  D.

Question 13

If production point is inside the production possibilities frontier

Accepted Answer

A)  it is not possible to produce more of both goods. 
B)  production is inefficient. 
C)  in order to produce more of one good, less of the other must be produced. 
D)  production is in the "unattainable" region. 
A)  it is not possible to produce more of both goods. 
B)  production is inefficient. 
C)  in order to produce more of one good, less of the other must be produced. 
D)  production is in the "unattainable" region.

Question 14

Any production point outside the production possibilities frontier is

Accepted Answer

A)  unattainable. 
B)  associated with unused resources. 
C)  attainable only if prices fall. 
D)  attainable only if prices rise. 
A)  unattainable. 
B)  associated with unused resources. 
C)  attainable only if prices fall. 
D)  attainable only if prices rise.

Question 15

-Refer to the production possibilities frontier in the figure above. Suppose a country is producing at point a. A movement to point ________ means that the country ________.

Accepted Answer

A)  d; must give up 20 million capital goods 
B)  e; is not operating efficiently 
C)  d; gives up 10 million consumer goods 
D)  b; is producing at an inefficient point 
A)  d; must give up 20 million capital goods 
B)  e; is not operating efficiently 
C)  d; gives up 10 million consumer goods 
D)  b; is producing at an inefficient point

Question 16

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

Accepted Answer

A)  bread, while Bob has a comparative advantage in the production of butter. 
B)  butter, while Bob has a comparative advantage in the production of bread. 
C)  bread and neither has a comparative advantage in the production of butter. 
D)  both bread and butter. 
A)  bread, while Bob has a comparative advantage in the production of butter. 
B)  butter, while Bob has a comparative advantage in the production of bread. 
C)  bread and neither has a comparative advantage in the production of butter. 
D)  both bread and butter.

Question 17

Which of the following does NOT help organize trade?

Accepted Answer

A)  property rights 
B)  markets 
C)  the production possibilities frontier 
D)  None of the above because all these answers given help organize trade. 
A)  property rights 
B)  markets 
C)  the production possibilities frontier 
D)  None of the above because all these answers given help organize trade.

Question 18

Marginal cost is the opportunity cost

Accepted Answer

A)  that your activity imposes on someone else. 
B)  that arises from producing one more unit of a good or service. 
C)  of a good or service that exceeds its benefit. 
D)  of a good or service divided by the number of units produced. 
A)  that your activity imposes on someone else. 
B)  that arises from producing one more unit of a good or service. 
C)  of a good or service that exceeds its benefit. 
D)  of a good or service divided by the number of units produced.

Question 19

The principle of increasing opportunity cost leads to

Accepted Answer

A)  a production possibilities frontier (PPF) that is bowed inward from the origin. 
B)  a production possibilities frontier (PPF) that is bowed outward from the origin. 
C)  an inward shift of the production possibilities frontier (PPF). 
D)  an outward shift of the production possibilities frontier (PPF). 
A)  a production possibilities frontier (PPF) that is bowed inward from the origin. 
B)  a production possibilities frontier (PPF) that is bowed outward from the origin. 
C)  an inward shift of the production possibilities frontier (PPF). 
D)  an outward shift of the production possibilities frontier (PPF).

Question 20

Production points inside the PPF are

Accepted Answer

A)  efficient but not attainable. 
B)  efficient and attainable. 
C)  inefficient and not attainable. 
D)  inefficient and attainable. 
A)  efficient but not attainable. 
B)  efficient and attainable. 
C)  inefficient and not attainable. 
D)  inefficient and attainable.

Suppose Joe can prepare 20 sandwiches or 10 pizzas in an hour and Beth can produce 36 sandwiches or 27 pizzas. The concept of comparative advantage concludes that

-The table above shows the production possibilities frontier for the nation of Isolanda. a) Find the marginal cost of a pound of fish using the above PPF. b) How does the marginal cost of a pound of fish change as more fish are caught?

Individuals A and B both produce good X. A has a comparative advantage in the production of good X if A

Technological change

-Refer to the production possibilities frontier in the figure above. If the country moves from point a to point c, the opportunity cost of the move is

Economic growth

-The above figure illustrates Mary's production possibilities frontier. Which of the following movements show opportunity costs increasing?

"Allocative efficiency requires that the maximum number of people have access to all of the goods and services that our economy produces." Is this statement true or false? Explain your answer.

If a country must decrease current consumption to increase the amount of capital goods it produces today, then it must

Most students attending college pay tuition and are unable to hold a full-time job. For these students, tuition is

BAE, a British defense company, has the contract to produce Tornado aircraft for the Royal Air Force. BAE is producing the aircraft at the lowest possible cost. If the RAF orders one more Tornado, there will be

-In the figure above, a point showing an inefficient production point is point

If production point is inside the production possibilities frontier

Any production point outside the production possibilities frontier is

-Refer to the production possibilities frontier in the figure above. Suppose a country is producing at point a. A movement to point means that the country .

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

Which of the following does NOT help organize trade?

Marginal cost is the opportunity cost

The principle of increasing opportunity cost leads to

Production points inside the PPF are

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

Suppose Joe can prepare 20 sandwiches or 10 pizzas in an hour and Beth can produce 36 sandwiches or 27 pizzas. The concept of comparative advantage concludes that

-The table above shows the production possibilities frontier for the nation of Isolanda. a) Find the marginal cost of a pound of fish using the above PPF. b) How does the marginal cost of a pound of fish change as more fish are caught?

Individuals A and B both produce good X. A has a comparative advantage in the production of good X if A

Technological change

-Refer to the production possibilities frontier in the figure above. If the country moves from point a to point c, the opportunity cost of the move is

Economic growth

-The above figure illustrates Mary's production possibilities frontier. Which of the following movements show opportunity costs increasing?

"Allocative efficiency requires that the maximum number of people have access to all of the goods and services that our economy produces." Is this statement true or false? Explain your answer.

If a country must decrease current consumption to increase the amount of capital goods it produces today, then it must

Most students attending college pay tuition and are unable to hold a full-time job. For these students, tuition is

BAE, a British defense company, has the contract to produce Tornado aircraft for the Royal Air Force. BAE is producing the aircraft at the lowest possible cost. If the RAF orders one more Tornado, there will be

-In the figure above, a point showing an inefficient production point is point

If production point is inside the production possibilities frontier

Any production point outside the production possibilities frontier is

-Refer to the production possibilities frontier in the figure above. Suppose a country is producing at point a. A movement to point ________ means that the country ________.

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

Which of the following does NOT help organize trade?

Marginal cost is the opportunity cost

The principle of increasing opportunity cost leads to

Production points inside the PPF are

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

-Refer to the production possibilities frontier in the figure above. Suppose a country is producing at point a. A movement to point means that the country .