Exam 2: The Economic Problem

-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 1 million gallons of ice cream are being produced

Economic growth is the result of all of the following except

Mary takes 4 minutes to make a sandwich and 6 minutes to mix a cocktail. Her sister Ash takes 4 minutes to make a sandwich and 4 minutes to mix a cocktail. Calculate each sister's opportunity cost. Which of the two sisters has an absolute advantage in making sandwiches? In mixing cocktails? Which of the two has a comparative advantage in making sandwiches? In mixing cocktails?

Marginal cost is the ________ one more unit of a good and ________ of the good increases.

-The above table shows production combinations on a country's production possibilities frontier. What is the opportunity cost of one unit of Y when the production of good Y increases from 16 to 28 units?

A point inside a production possibilities frontier

-In the figure above, point E could be obtained if

When economic growth occurs, the

-The figure above illustrates Mary's production possibilities frontier. If Mary wants to move from point b to point c, she must

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

If the United States can increase its production of automobiles without decreasing its production of any other good, the United States must have been producing at a point

Which of the following statements regarding the production possibilities frontier is TRUE?

-Point C on the production possibilities frontier in the above diagram illustrates

Employees at Bank of America are good at providing banking services and workers at Ben & Jerry's are good at making ice cream. If some bankers are moved to making ice cream, we get a small increase in the amount of ice cream produced and a large decrease in the amount of banking services provided. If the PPF has banking services on the vertical axis and ice cream on the horizontal axis, the effect of the change reflects

Economic growth

Production efficiency occurs when production

Increasing opportunity cost implies that

In one day, Brandon can either plow 10 acres or plant 20 acres. In one day, Christopher can either plow 14 acres or plant 14 acres. Which of the following statements about comparative advantage is CORRECT?

Marginal benefit curves slope

A production possibilities frontier figure does NOT illustrate