Question 1

Exhibit 2-13 Production possibilities curve   In Exhibit 2-13, point D:

Accepted Answer

A) is preferred to point A. 
B) is a point of maximum production for this economy this year. 
C) is not achievable this year because of limited resources. 
D) could result from some degree of unemployment of inefficiency. 
E) is preferred to point H. 
A) is preferred to point A. 
B) is a point of maximum production for this economy this year. 
C) is not achievable this year because of limited resources. 
D) could result from some degree of unemployment of inefficiency. 
E) is preferred to point H.

Question 2

Exhibit 2-13 Production possibilities curve   In Exhibit 2-13, in terms of efficiency:

Accepted Answer

A) point A is preferred to point B. 
B) point A is preferred to point E. 
C) point A is preferred to point D. 
D) point B is preferred to point A. 
E) point B is preferred to point C. 
A) point A is preferred to point B. 
B) point A is preferred to point E. 
C) point A is preferred to point D. 
D) point B is preferred to point A. 
E) point B is preferred to point C.

Question 3

Exhibit 2-15 Production possibilities curve   In Exhibit 2-15, the economy will experience the most future economic growth if it chooses what point now?

Accepted Answer

A) J. 
B) K. 
C) M. 
D) N. 
E) P. 
A) J. 
B) K. 
C) M. 
D) N. 
E) P.

Question 4

Exhibit 2-4 Production possibilities curve data   According to the data given in Exhibit 2-4, the production of 140 units of consumer goods and 10 units of capital goods:

Accepted Answer

A) is possible but would be inefficient. 
B) may be a result of unemployment. 
C) may be a result of unused natural resources. 
D) all of the above. 
E) none of the above. 
A) is possible but would be inefficient. 
B) may be a result of unemployment. 
C) may be a result of unused natural resources. 
D) all of the above. 
E) none of the above.

Question 5

The opportunity cost of attending a movie is the purchase price of a ticket.

Accepted Answer

A) True 
 B)False

Question 6

While waiting in line to buy two tacos at 80 cents each and a medium drink for 90 cents, Jordan notices that the restaurant has a value meal containing three tacos and a medium drink all for $3. For Jordan, the marginal cost of the third taco would be:

Accepted Answer

A) zero. 
B) 50 cents. 
C) 80 cents. 
D) $1. 
A) zero. 
B) 50 cents. 
C) 80 cents. 
D) $1.

Question 7

The production possibilities curve for the nation of Economagic shifts to the left. This could have been caused by:

Accepted Answer

A) an increase in Economagic's labor supply. 
B) innovation in the production of goods in Economagic. 
C) a war that destroyed some of Economagic's resource base. 
D) unemployment among Economagic's workers. 
E) Economagic's choice of more consumption and less capital last period. 
A) an increase in Economagic's labor supply. 
B) innovation in the production of goods in Economagic. 
C) a war that destroyed some of Economagic's resource base. 
D) unemployment among Economagic's workers. 
E) Economagic's choice of more consumption and less capital last period.

Question 8

On the production possibilities curve, a movement between points that yields a loss of one good in order to raise the output of another good will maintain efficient production.

Accepted Answer

A) True 
 B)False

Question 9

Mikki decides to work five hours the night before her economics exam. She earns an extra $75, but her exam score is 10 points lower than it would have been had she stayed home and studied. Her opportunity cost is the:

Accepted Answer

A) five hours she worked. 
B) $75 she earned. 
C) 10 points she lost on her exam. 
D) time she could have spent watching television. 
E) guilt she feels about neglecting her economics studies. 
A) five hours she worked. 
B) $75 she earned. 
C) 10 points she lost on her exam. 
D) time she could have spent watching television. 
E) guilt she feels about neglecting her economics studies.

Question 10

Exhibit 2-3 Production possibilities curve data
  According to the data given in Exhibit 2-3, the production of 1 unit of capital goods and 14 units of consumer goods:

Accepted Answer

A) is possible but would be inefficient. 
B) may be a result of unemployment. 
C) may be a result of unused natural resources. 
D) all of these. 
A) is possible but would be inefficient. 
B) may be a result of unemployment. 
C) may be a result of unused natural resources. 
D) all of these.

Question 11

A nation can accelerate its economic growth by:

Accepted Answer

A) reducing the number of immigrants allowed into the country. 
B) adding to its stock of capital. 
C) printing more money. 
D) imposing tariffs and quotas on imported goods. 
A) reducing the number of immigrants allowed into the country. 
B) adding to its stock of capital. 
C) printing more money. 
D) imposing tariffs and quotas on imported goods.

Question 12

Exhibit 2-8 Production possibilities curve data
  As shown in Exhibit 2-8, a total output of 14 units of consumer goods and 1 unit of capital goods is:

Accepted Answer

A) the result of maximum use of the economy's labor force. 
B) an efficient way of using the economy's scarce resources. 
C) unobtainable in this economy. 
D) less than the maximum rate of output for this economy. 
A) the result of maximum use of the economy's labor force. 
B) an efficient way of using the economy's scarce resources. 
C) unobtainable in this economy. 
D) less than the maximum rate of output for this economy.

Question 13

The highest valued alternative that must be given up in order to choose an option is called the:

Accepted Answer

A) opportunity cost. 
B) utility cost. 
C) scarcity expense. 
D) disutility option. 
A) opportunity cost. 
B) utility cost. 
C) scarcity expense. 
D) disutility option.

Question 14

People in poor countries may have difficulties achieving economic growth because:

Accepted Answer

A) their production possibilities curves slope upward instead of downward. 
B) they must cut back on current consumption to increase capital goods. 
C) they have a solid consumption base already in place. 
D) their resource bases are fully developed. 
E) the law of increasing costs makes it hard to produce more goods. 
A) their production possibilities curves slope upward instead of downward. 
B) they must cut back on current consumption to increase capital goods. 
C) they have a solid consumption base already in place. 
D) their resource bases are fully developed. 
E) the law of increasing costs makes it hard to produce more goods.

Question 15

The opportunity cost of your college education is:

Accepted Answer

A) c and d. 
B) d and e. 
C) the actual dollar cost of your college education. 
D) your best alternative use of the money you spend for a college education. 
E) money you could have earned working instead of going to college. 
A) c and d. 
B) d and e. 
C) the actual dollar cost of your college education. 
D) your best alternative use of the money you spend for a college education. 
E) money you could have earned working instead of going to college.

Question 16

Unemployment or underemployment of labor might explain why an economy would be operating inside its production possibilities curve (PPC).

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is true about the production possibilities curve when a technological progress occurs? The curve:

Accepted Answer

A) shifts inwards to the left. 
B) becomes flatter at one end and steeper at the other end. 
C) becomes steeper. 
D) shifts outward to the right. 
E) does not change. 
A) shifts inwards to the left. 
B) becomes flatter at one end and steeper at the other end. 
C) becomes steeper. 
D) shifts outward to the right. 
E) does not change.

Question 18

A rightward (an outward)shift of a nation's production possibilities curve could be caused by:

Accepted Answer

A) a decrease in technology. 
B) an increase in resources. 
C) producing more consumer and fewer capital goods. 
D) a decline in the labor force's level of education and skills. 
A) a decrease in technology. 
B) an increase in resources. 
C) producing more consumer and fewer capital goods. 
D) a decline in the labor force's level of education and skills.

Question 19

Efficient production means producing:

Accepted Answer

A) less than feasible output for a given amount of resources. 
B) more than feasible output for a given amount of resources. 
C) the maximum feasible output for a given amount of resources. 
D) no more than what is needed. 
E) in excess of what is needed. 
A) less than feasible output for a given amount of resources. 
B) more than feasible output for a given amount of resources. 
C) the maximum feasible output for a given amount of resources. 
D) no more than what is needed. 
E) in excess of what is needed.

Question 20

Exhibit 2-9 Production possibilities curve   Movement along this production possibilities curve shown in Exhibit 2-9 indicates:

Accepted Answer

A) that labor is not equally productive or homogeneous (nonhomogeneous). 
B) decreasing opportunity costs. 
C) all inputs are homogeneous. 
D) all of these. 
A) that labor is not equally productive or homogeneous (nonhomogeneous). 
B) decreasing opportunity costs. 
C) all inputs are homogeneous. 
D) all of these.

Exam 2: Production Possibilities, Opportunity Cost, and Economic Growth

Exhibit 2-13 Production possibilities curve In Exhibit 2-13, point D:

Exhibit 2-13 Production possibilities curve In Exhibit 2-13, in terms of efficiency:

Exhibit 2-15 Production possibilities curve In Exhibit 2-15, the economy will experience the most future economic growth if it chooses what point now?

Exhibit 2-4 Production possibilities curve data According to the data given in Exhibit 2-4, the production of 140 units of consumer goods and 10 units of capital goods:

The opportunity cost of attending a movie is the purchase price of a ticket.

While waiting in line to buy two tacos at 80 cents each and a medium drink for 90 cents, Jordan notices that the restaurant has a value meal containing three tacos and a medium drink all for $3. For Jordan, the marginal cost of the third taco would be:

The production possibilities curve for the nation of Economagic shifts to the left. This could have been caused by:

On the production possibilities curve, a movement between points that yields a loss of one good in order to raise the output of another good will maintain efficient production.

Mikki decides to work five hours the night before her economics exam. She earns an extra $75, but her exam score is 10 points lower than it would have been had she stayed home and studied. Her opportunity cost is the:

Exhibit 2-3 Production possibilities curve data According to the data given in Exhibit 2-3, the production of 1 unit of capital goods and 14 units of consumer goods:

A nation can accelerate its economic growth by:

Exhibit 2-8 Production possibilities curve data As shown in Exhibit 2-8, a total output of 14 units of consumer goods and 1 unit of capital goods is:

The highest valued alternative that must be given up in order to choose an option is called the:

People in poor countries may have difficulties achieving economic growth because:

The opportunity cost of your college education is:

Unemployment or underemployment of labor might explain why an economy would be operating inside its production possibilities curve (PPC).

Which of the following is true about the production possibilities curve when a technological progress occurs? The curve:

A rightward (an outward)shift of a nation's production possibilities curve could be caused by:

Efficient production means producing:

Exhibit 2-9 Production possibilities curve Movement along this production possibilities curve shown in Exhibit 2-9 indicates:

Introducing the Economic Way of Thinking

Market Demand and Supply

Markets in Action

Gross Domestic Product

Business Cycles and Unemployment

Inflation

The Keynesian Model

The Keynesian Model in Action

Aggregate Demand and Supply

Fiscal Policy

The Public Sector

Federal Deficits, Surpluses, and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

The Phillips Curve and Expectations Theory

International Trade and Finance

Economies in Transition

Growth and the Less-Developed Countries

Applying Graphs to Economics

Consumer Surplus, Producer Surplus, and Market Efficiency

the Self-Correcting Aggregate Demand and Supply Model

Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

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