Exam 2: Production Possibilities Opportunity Cost and Economic Growth

Using a production possibilities curve, a technological advance that increases the amount of output for the same amount of inputs would be illustrated as a(n):

The production possibilities curve shows that:

After the terrorist attacks on September 11, 2001, the United States began devoting substantial resources toward the War on Terrorism, homeland security, and relief efforts. As long as our resources were being used efficiently, the production possibilities curve would suggest that:

On a production possibilities curve diagram, greater entrepreneurship:

Exhibit 2-3 Production possibilities curve data

	A	B	C	D	E
Capital goods	0	1	2	3	4
Consumer goods	20	18	14	8	0

According to the data given in Exhibit 2-3, the production of 1 unit of capital goods and 20 units of consumer goods:

The question "Should children receive free lunch at school?" is an example of which fundamental economic question?

Adding more resources causes:

The law of increasing opportunity costs causes the production possibilities curve to:

When the opportunity cost of producing carrots increases as more carrots are produced, then:

According to marginal analysis, you should choose to do something if the extra benefit:

Exhibit 2-16 Production possibilities curve From the information in Exhibit 2-16, which of the following points on the production possibilities curve are attainable with the resources and technology currently available?

A rational decision maker always chooses the option for which marginal benefit is:

Exhibit 2-11 Production possibilities curves In Exhibit 2-11, which of the following could have caused the production possibilities curve of an economy to shift from the one labeled A to the one labeled B?

Exhibit 2-18 Production possibilities curves -In Exhibit 2-18, 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 point B in Year Y. This country:

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

Exhibit 2-4 Production possibilities curve data

	A	B	C	D	E
Capital goods	0	10	20	30	40
Consumer goods	200	180	140	80	0

According to the data in Exhibit 2-4, a total output of 140 units of consumer goods and 10 units of capital goods would:

Draw a graph of a production possibilities curve with consumption goods and capital goods that displays the law of increasing opportunity costs. What do points on, inside and outside the curve represent? What does a rightward shift of the curve represent? How is economic growth expressed in terms of the production possibilities model?

Which of the following sayings best reflects the concept of opportunity cost?

Why are all costs really "opportunity costs"? What is an opportunity cost of attending class?

Exhibit 2-8 Production possibilities curve data

	A	B	C	D	E	F
Capital goods	15	14	12	9	5	0
Consumer goods	0	2	4	6	8	10

As shown in Exhibit 2-8, the concept of increasing opportunity costs is reflected in the fact that: