Question 1

-In the figure above, if 4 million computers are produced per year then the ________ should be produced to achieve the allocatively efficient use of resources.

Accepted Answer

A)  marginal cost of a computer exceeds the marginal benefit of a computer, so more computers 
B)  marginal cost of a computer exceeds the marginal benefit of a computer, so fewer computers 
C)  marginal benefit of a computer exceeds the marginal cost of a computer, so more computers 
D)  marginal benefit of a computer exceeds the marginal cost of a computer, so fewer computers 
A)  marginal cost of a computer exceeds the marginal benefit of a computer, so more computers 
B)  marginal cost of a computer exceeds the marginal benefit of a computer, so fewer computers 
C)  marginal benefit of a computer exceeds the marginal cost of a computer, so more computers 
D)  marginal benefit of a computer exceeds the marginal cost of a computer, so fewer computers

Question 2

-In the figure above, suppose that Mac and Izzie trade and reach point c. Then

Accepted Answer

A)  Mac and Izzie should both produce at point a. 
B)  Mac should produce at point b and Izzie should produce at point d. 
C)  Mac should produce at point d and Izzie should produce at point b. 
D)  Mac and Izzie should both produce at point c. 
A)  Mac and Izzie should both produce at point a. 
B)  Mac should produce at point b and Izzie should produce at point d. 
C)  Mac should produce at point d and Izzie should produce at point b. 
D)  Mac and Izzie should both produce at point c.

Question 3

Marginal cost

Accepted Answer

A)  increases as more is produced. 
B)  remains constant as more is produced. 
C)  decreases as more is produced. 
D)  decreases as marginal benefits decrease. 
A)  increases as more is produced. 
B)  remains constant as more is produced. 
C)  decreases as more is produced. 
D)  decreases as marginal benefits decrease.

Question 4

-The above table shows production points on Sweet-Tooth Land's production possibilities frontier. What is the opportunity cost of one can of cola if Sweet-tooth Land moves from point C to point B?

Accepted Answer

A)  20 chocolate bars per can of cola 
B)  10 chocolate bars per can of cola 
C)  2 chocolate bars per can of cola 
D)  1/2 chocolate bars per can of cola 
A)  20 chocolate bars per can of cola 
B)  10 chocolate bars per can of cola 
C)  2 chocolate bars per can of cola 
D)  1/2 chocolate bars per can of cola

Question 5

Missouri can produce 10,000 tons of pecans per year or 5,000 tons of pears per year. Washington can produce 12,000 tons of pecans per year or 48,000 tons of pears per year. Which of the following statements about opportunity cost is CORRECT?

Accepted Answer

A)  The opportunity cost of a ton of pecans is 2 tons of pears per ton of pecans for Missouri and 1/4 ton of pears per ton of pecans for Washington. 
B)  The opportunity cost of a ton of pears is 2 tons of pecans per ton of pears for Missouri and 1/4 ton of pecans per ton of pears for Washington. 
C)  The opportunity cost of a ton of pecans is 1/2 ton of pears per ton of pecans for Missouri and 4 tons of pears per ton of pecans for Washington. 
D)  Both answers B and C are correct. 
A)  The opportunity cost of a ton of pecans is 2 tons of pears per ton of pecans for Missouri and 1/4 ton of pears per ton of pecans for Washington. 
B)  The opportunity cost of a ton of pears is 2 tons of pecans per ton of pears for Missouri and 1/4 ton of pecans per ton of pears for Washington. 
C)  The opportunity cost of a ton of pecans is 1/2 ton of pears per ton of pecans for Missouri and 4 tons of pears per ton of pecans for Washington. 
D)  Both answers B and C are correct.

Question 6

As a person consumes more of a good, the

Accepted Answer

A)  marginal benefit increases. 
B)  marginal benefit decreases. 
C)  marginal benefit increases or decreases depending whether or not the economy is on the PPF. 
D)  price of the good falls. 
A)  marginal benefit increases. 
B)  marginal benefit decreases. 
C)  marginal benefit increases or decreases depending whether or not the economy is on the PPF. 
D)  price of the good falls.

Question 7

When producing at a production efficient point

Accepted Answer

A)  our choice of the goods can be either on or within the production possibilities frontier. 
B)  we can satisfy our all wants. 
C)  the opportunity cost of another good is zero. 
D)  we face a tradeoff and incur an opportunity cost. 
A)  our choice of the goods can be either on or within the production possibilities frontier. 
B)  we can satisfy our all wants. 
C)  the opportunity cost of another good is zero. 
D)  we face a tradeoff and incur an opportunity cost.

Question 8

Betty and Ann live on a desert island. With a day's labor, Ann can produce 6 fish or 4 coconuts; Betty can produce 3 fish or 1 coconut. Betty's opportunity cost of producing 1 fish is ________, and she should specialize in the production of ________.

Accepted Answer

A)  1/3 coconut per fish; fish 
B)  2/3 coconut per fish; coconuts 
C)  1 coconut per fish; fish 
D)  4 coconuts per fish; fish 
A)  1/3 coconut per fish; fish 
B)  2/3 coconut per fish; coconuts 
C)  1 coconut per fish; fish 
D)  4 coconuts per fish; fish

Question 9

Jake takes 40 minutes to fry a chicken and 10 minutes to toast a slice of bread. His brother Elwood takes 60 minutes to fry a chicken and 4 minutes to toast a slice of bread. Calculate each brother's opportunity cost. Who has a comparative advantage in which activity? Explain. Will the brothers gain if they specialize?

Accepted Answer

Jake can spend an hour to fry 1.5 chicke

Question 10

At one point along a PPF 40 tons of wheat are produced while 80 tons of rice are produced. At another point along the same PPF, 41 tons of wheat are produced while 70 tons of rice are produced. The opportunity cost of producing a ton of wheat between these points is ________ per ton of wheat.

Accepted Answer

A)  1/2 ton of rice 
B)  10 tons of rice 
C)  1/10 ton of rice 
D)  4/7 ton of rice 
A)  1/2 ton of rice 
B)  10 tons of rice 
C)  1/10 ton of rice 
D)  4/7 ton of rice

Question 11

Opportunity cost is illustrated in a production possibilities frontier (PPF) by a movement

Accepted Answer

A)  from the region within the PPF to a point on the PPF. 
B)  from the region within the PPF to the region outside of the PPF. 
C)  from the region outside of the PPF to a point on the PPF. 
D)  along the PPF where to gain more of one good it is necessary to give some of another good. 
A)  from the region within the PPF to a point on the PPF. 
B)  from the region within the PPF to the region outside of the PPF. 
C)  from the region outside of the PPF to a point on the PPF. 
D)  along the PPF where to gain more of one good it is necessary to give some of another good.

Question 12

As residents of developing countries increase their chocolate consumption, the increased production of cocoa results in

Accepted Answer

A)  increased opportunity cost of cocoa production. 
B)  decreased opportunity cost of cocoa production. 
C)  no change in production of other goods and services. 
D)  increased production of other goods and services. 
A)  increased opportunity cost of cocoa production. 
B)  decreased opportunity cost of cocoa production. 
C)  no change in production of other goods and services. 
D)  increased production of other goods and services.

Question 13

Which of the following describes comparative advantage?

Accepted Answer

A)  To produce a bushel of wheat Farmer John must give up 2 bushels of corn whereas Farmer Ben must give up 3 bushels of corn. 
B)  Company A can produce 4 boxes of cereal in a day whereas Company B can produce 5 boxes of cereal in a day. 
C)  Firm A can produce a good at a cost of $3 and Firm B can produce the good at a cost of $4. 
D)  Jane can type 50 words per minute and Joe can type 60 words per minute. 
A)  To produce a bushel of wheat Farmer John must give up 2 bushels of corn whereas Farmer Ben must give up 3 bushels of corn. 
B)  Company A can produce 4 boxes of cereal in a day whereas Company B can produce 5 boxes of cereal in a day. 
C)  Firm A can produce a good at a cost of $3 and Firm B can produce the good at a cost of $4. 
D)  Jane can type 50 words per minute and Joe can type 60 words per minute.

Question 14

A reduction in the amount of unemployment

Accepted Answer

A)  shifts the production possibilities frontier outward. 
B)  moves the economy's point of production closer to the production possibilities frontier. 
C)  moves the economy's point of production along the production possibilities frontier. 
D)  moves the economy's point of production further away from the production possibilities frontier. 
A)  shifts the production possibilities frontier outward. 
B)  moves the economy's point of production closer to the production possibilities frontier. 
C)  moves the economy's point of production along the production possibilities frontier. 
D)  moves the economy's point of production further away from the production possibilities frontier.

Question 15

Explain how the production possibilities frontier illustrates scarcity.

Accepted Answer

The PPF illustrates

Question 16

Using a production possibilities frontier, economic growth is illustrated by a

Accepted Answer

A)  point inside the curve. 
B)  point on the curve. 
C)  movement from one point on the curve to another point on the curve. 
D)  rightward shift of the curve. 
A)  point inside the curve. 
B)  point on the curve. 
C)  movement from one point on the curve to another point on the curve. 
D)  rightward shift of the curve.

Question 17

Intellectual property

Accepted Answer

A)  is protected by common law rather than by written laws. 
B)  is protected by people's sense of decency rather than by written laws. 
C)  belongs to everyone with the necessary human capital to use it. 
D)  is often protected by copyrights and patents. 
A)  is protected by common law rather than by written laws. 
B)  is protected by people's sense of decency rather than by written laws. 
C)  belongs to everyone with the necessary human capital to use it. 
D)  is often protected by copyrights and patents.

Question 18

Claire and Dag are farmers who produce beef and corn. In a year, Claire can produce 16 tons of beef or 40 bushels of corn, while Dag can produce 5 tons of beef or 25 bushels of corn. The opportunity cost of producing a ton of beef is

Accepted Answer

A)  10 bushels of corn for Dag and 8 bushels of corn for Claire. 
B)  5 bushels of corn for Dag and 2.5 bushels of corn for Claire. 
C)  20 bushels of corn for Dag and 50 bushels of corn for Claire. 
D)  36.5 days for Dag and 45.6 days for Claire. 
A)  10 bushels of corn for Dag and 8 bushels of corn for Claire. 
B)  5 bushels of corn for Dag and 2.5 bushels of corn for Claire. 
C)  20 bushels of corn for Dag and 50 bushels of corn for Claire. 
D)  36.5 days for Dag and 45.6 days for Claire.

Question 19

Markets

Accepted Answer

A)  facilitate trade. 
B)  allow traders to enjoy gains from trade. 
C)  coordinate price information between buyers and sellers. 
D)  All of the above answers are correct. 
A)  facilitate trade. 
B)  allow traders to enjoy gains from trade. 
C)  coordinate price information between buyers and sellers. 
D)  All of the above answers are correct.

Question 20

Each point on the production possibilities frontier achieves allocative efficiency.

Accepted Answer

A) True 
 B)False

-In the figure above, if 4 million computers are produced per year then the ________ should be produced to achieve the allocatively efficient use of resources.

-In the figure above, suppose that Mac and Izzie trade and reach point c. Then

Marginal cost

-The above table shows production points on Sweet-Tooth Land's production possibilities frontier. What is the opportunity cost of one can of cola if Sweet-tooth Land moves from point C to point B?

Missouri can produce 10,000 tons of pecans per year or 5,000 tons of pears per year. Washington can produce 12,000 tons of pecans per year or 48,000 tons of pears per year. Which of the following statements about opportunity cost is CORRECT?

As a person consumes more of a good, the

When producing at a production efficient point

Betty and Ann live on a desert island. With a day's labor, Ann can produce 6 fish or 4 coconuts; Betty can produce 3 fish or 1 coconut. Betty's opportunity cost of producing 1 fish is , and she should specialize in the production of .

At one point along a PPF 40 tons of wheat are produced while 80 tons of rice are produced. At another point along the same PPF, 41 tons of wheat are produced while 70 tons of rice are produced. The opportunity cost of producing a ton of wheat between these points is ________ per ton of wheat.

Opportunity cost is illustrated in a production possibilities frontier (PPF) by a movement

As residents of developing countries increase their chocolate consumption, the increased production of cocoa results in

Which of the following describes comparative advantage?

A reduction in the amount of unemployment

Explain how the production possibilities frontier illustrates scarcity.

Using a production possibilities frontier, economic growth is illustrated by a

Intellectual property

Claire and Dag are farmers who produce beef and corn. In a year, Claire can produce 16 tons of beef or 40 bushels of corn, while Dag can produce 5 tons of beef or 25 bushels of corn. The opportunity cost of producing a ton of beef is

Markets

Each point on the production possibilities frontier achieves allocative efficiency.

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

-In the figure above, if 4 million computers are produced per year then the ________ should be produced to achieve the allocatively efficient use of resources.

-In the figure above, suppose that Mac and Izzie trade and reach point c. Then

Marginal cost

-The above table shows production points on Sweet-Tooth Land's production possibilities frontier. What is the opportunity cost of one can of cola if Sweet-tooth Land moves from point C to point B?

Missouri can produce 10,000 tons of pecans per year or 5,000 tons of pears per year. Washington can produce 12,000 tons of pecans per year or 48,000 tons of pears per year. Which of the following statements about opportunity cost is CORRECT?

As a person consumes more of a good, the

When producing at a production efficient point

Betty and Ann live on a desert island. With a day's labor, Ann can produce 6 fish or 4 coconuts; Betty can produce 3 fish or 1 coconut. Betty's opportunity cost of producing 1 fish is ________, and she should specialize in the production of ________.

At one point along a PPF 40 tons of wheat are produced while 80 tons of rice are produced. At another point along the same PPF, 41 tons of wheat are produced while 70 tons of rice are produced. The opportunity cost of producing a ton of wheat between these points is ________ per ton of wheat.

Opportunity cost is illustrated in a production possibilities frontier (PPF) by a movement

As residents of developing countries increase their chocolate consumption, the increased production of cocoa results in

Which of the following describes comparative advantage?

A reduction in the amount of unemployment

Explain how the production possibilities frontier illustrates scarcity.

Using a production possibilities frontier, economic growth is illustrated by a

Intellectual property

Claire and Dag are farmers who produce beef and corn. In a year, Claire can produce 16 tons of beef or 40 bushels of corn, while Dag can produce 5 tons of beef or 25 bushels of corn. The opportunity cost of producing a ton of beef is

Markets

Each point on the production possibilities frontier achieves allocative efficiency.

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

Betty and Ann live on a desert island. With a day's labor, Ann can produce 6 fish or 4 coconuts; Betty can produce 3 fish or 1 coconut. Betty's opportunity cost of producing 1 fish is , and she should specialize in the production of .