Exam 2: The Economic Problem

-The country whose production possibilities frontier is illustrated above is currently at position A on the production possibilities frontier. If it wishes to move to position B, it will

Economic growth can be represented by

Opportunity cost is represented on the production possibilities frontier by

-The table above lists six points on the production possibilities frontier for grain and cars. What is the opportunity cost of producing the 26th car?

In March a factory used new technology to produce its output. Then in August a fire destroys half the factory. The new technology shifted the factory's PPF ________ and the fire shifted it ________.

-The table above shows the marginal benefit from pizza and the marginal cost of pizza in cans of soda forgone. The allocatively efficient quantity of pizza is ________ pizzas per day.

The production possibilities frontier separates

A country that has an absolute advantage in producing all goods will

Agnes can produce either 1 unit of X or 1 unit of Y in an hour, while Brenda can produce either 2 units of X or 4 units of Y in an hour.

The tradeoff between current consumption and the production of capital goods also reflects a tradeoff between

Households are buyers in factor markets and sellers in goods markets.

At one point along a PPF, 50 tons of coffee and 100 tons of bananas are produced. At another point along the same PPF, 30 tons of coffee and 140 tons of bananas are produced. The opportunity cost of a ton of coffee between these points is

The production possibilities frontier

-In the production possibilities frontier depicted in the figure above, which of the following combinations of hats and bananas is inefficient?

Assuming farmers can plant either corn or soybeans, as U.S. farmers plant more corn to meet rising global demand

President Obama has proposed a goal that everyone complete at least one year of formal education or training beyond high school. This policy would ________ the production of current consumption goods and services and ________ the future production of consumption goods and services.

A president of the United States promises to produce more defense goods without any decreases in the production of other goods. This promise can be valid

-The figure above illustrates that if this country wishes to have F₂ - F₁ additional food by moving from point A to point B, it will

-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 ________.

The opportunity cost of producing one ton of wheat for Country Gamma is 4 tons of corn. The opportunity cost of producing one ton of wheat for Country Beta is 8 tons of corn. Which country has the comparative advantage in the production of wheat?