Exam 2: Choice, Opportunity Costs, and Specialization

Increasing marginal opportunity costs indicate that if a nation wants to produce more of one product, it may do so by giving up greater and greater amounts of another product.

The figure given below represents the production possibilities curves [PPC] of a country producing wine and cars. Figure 2.1 -Refer to Figure 2.1. If the country's PPC curve is curve II, then:

The table given below represents the output per hour of cookies and chilies in Ohio and Iowa. Table 2.4 Output per Hour Iowa Cookies Chilies Ohid 6 24 Iowa 12 96 -Refer to Table 2.4. If trade were to occur, what would be the most Ohio would be willing to pay for 1 chili?

The reason why South Korea flourished economically relative to North Korea was that the former retained a strong version of communism and totalitarianism post World War II.

Julio makes wine and beer. Last year he made 20 bottles of wine and 20 cases of beer. If the price of grapes goes down (making wine cheaper to make), Julio will be able to make the same amount of wine and more beer.

Economists refer to the ability of one person or nation to do something with a lower opportunity cost than another as _____.

Specialization and trade can take place only if a country is endowed with more of something compared to other countries.

The figure given below represents an economy producing corn and planes under different economic situations. Figure 2.2 -Refer to Figure 2.2. Assume that the economy experiences a 20% drop in the work force. Which of the following graph(s) in the figure describe(s) the change in the economy's production possibilities curve [PPC]?

When there is a choice between the consumption of bundle X and bundle Y, the opportunity cost of consuming bundle X is bundle Y.

The figure given below represents the production possibilities curves [PPC] of a country producing wine and cars. Figure 2.1 -Refer to Figure 2.1. Identify the correct statement.

A point lying inside the production possibilities curve [PPC] is not an attainable combination.

Given below is the production possibilities schedule for capital goods and consumer goods. Table 2.3 Production Possibilities Schedule Combination Capital Goods Consumer Goods A 4 0 B 3 4 C 2 7 D 1 9 E 0 10 -Consider Table 2.3. The production possibilities curve [PPC] representing this schedule would be:

Bob and Bill can make 16 toys each if they devote 8 working hours in a day. Further, Bob can repair 4 cars and Bill can repair 2 cars, if they devote 8 working hours in a day. What is the opportunity cost of repairing one car to Bill?

If the general education level within a country rises significantly over time, it is likely that:

Assume that a doctor makes $200 per hour, a lawyer $250 per hour, an architect $140 per hour, a professor $50 per hour, and a waiter $35 per hour. Which of these professionals is most likely to spend time to negotiate with a car dealer?

Given below is the production possibilities schedule for capital goods and consumer goods. Table 2.3 Production Possibilities Schedule Combination Capital Goods Consumer Goods A 4 0 B 3 4 C 2 7 D 1 9 E 0 10 -A decrease in the quantity of available resources would be represented by:

Specialization and trade do not allow individuals, firms, or even nations to acquire goods that lie beyond their production capabilities.

According to economists, human activity is unresponsive to changes in costs.

Assume that the United States uses 20 worker-hours to produce 1 computer and 5 worker-hours to produce 1 unit of food; assume also that Japan uses 10 worker-hours to produce 1 computer and 30 worker-hours to produce 1 unit of food. Which of the following statements is true?

Betty goes out to enjoy a bouffe with her friend instead of practicing calculus problems for her maths examination that is due the following day. This implies that the opportunity cost of the bouffe to Betty is zero.