Exam 2: Production Possibilities Opportunity Cost and Economic Growth

Exhibit 2-2 Production possibilities curve In Exhibit 2-2, the slope of the production possibilities curve indicates that the opportunity cost of:

The opportunity cost of watching television is:

If an economy could produce 0 capital goods and 200 consumption goods, or 10 capital goods and 180 consumption goods with full employment, construct two additional full employment production options that would exhibit the law of increasing opportunity costs.

Which of the following is an example of an organization using marginal analysis?

Exhibit 2-7 Production possibilities curve For the economy shown in Exhibit 2-7 to operate at point C, it must:

Exhibit 2-15 Production possibilities curve In Exhibit 2-15, if the economy moves from point L to point M, the opportunity cost of producing 10 more capital goods is:

Because of the problem of scarcity, the choice to produce:

Exhibit 2-19 Production possibilities curves In Exhibit 2-19, the production possibilities curves for a country are shown for the years Year X and Year Y. Suppose this country was located at point A in Year X and would like to get to point B in Year Y. Construct a plan this country to activate in Year X to achieve this growth.

Along a production possibilities curve showing capital and consumption goods production, which of the following pairs are being held fixed?

Exhibit 2-15 Production possibilities curve In Exhibit 2-15, evidence of the law of increasing opportunity costs is:

The law of increasing costs indicates that the opportunity cost of producing a good:

Compare two economies A and B that start out with identical production possibilities curves. Economy A chooses an efficient point with 6 consumption goods and 3 capital goods, while economy B also chooses an efficient point, but with 4 consumption goods and 5 capital goods. In the future we can predict:

Which of the following would be most likely to cause the production possibilities curve for computers and education to shift outward?

While waiting in line to buy a cheeseburger for $2 and a drink for 75 cents, Aaron notices that the restaurant has a value meal containing a cheeseburger, drink, and French fries for $3. For Aaron, the marginal cost of purchasing the French fries:

The opportunity cost of an action is:

Exhibit 2-12 Production possibilities curve In Exhibit 2-12, suppose an economy with the given production possibilities curve is currently located at point A in the figure. Which of the following statements is false ?

	A	B	C	D	E
Capital goods	0	1	2	3	4
Consumption goods	25	23	19	13	0

Suppose an economy is faced with the production possibilities table shown in Exhibit 2-10. As additional units of capital goods are being produced, the number of consumption goods produced must:

Exhibit 2-13 Production possibilities curve -In Exhibit 2-13, point H is:

The opportunity cost of an activity means the:

In Europe during the 14th century, the Black Plague killed 24 million people or close to 37 percent of the population. How would this affect the production possibilities curves for the countries of Europe at that time?