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

Exhibit 2-10  Production possibilities curve data Suppose an economy is faced with the production possibilities table shown in Exhibit 2-10. As additional units of capital goods are produced, the opportunity cost in terms of sacrificed units of consumption goods ____ because of ____.

The production possibilities curve depicts the various combinations of two goods that can be:

Using a production possibilities curve, an economy that produces an output combination less than the maximum possible is depicted by a point located:

Exhibit 2-1  Production possibilities curve data In Exhibit 2-1, according to the information, the opportunity cost of producing 3 units of capital is:

In economics terminology, the process of accumulating money is investment.

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

The production possibilities curve illustrates all of the following concepts except :

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:

Why are all costs really "opportunity costs"?

Opportunity cost represents the worst of the various alternatives that must be given up when a choice is made in the context of scarcity.

Which fundamental economic question is most closely related to the issues of income distribution and poverty?

Three basic decisions must be made by all economies. What are they?

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?

Exhibit 2-16  Production possibilities curve In Exhibit 2-16, which of the following points on the production possibilities curve are full-employment production points?

The opportunity cost of a purchase is:

Ralph wants to buy some milk and a box of cereal. If Ralph buys 2 quarts of milk at $1 per quart, the box of cereal costs 75 cents. If he buys 3 quarts of milk at $1 per quart, the box of cereal is free. For Ralph, the marginal cost of the third quart of milk is:

Which of the following would be least likely to cause the production possibilities curve to shift outward?

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

Exhibit 2-16  Production possibilities curve In Exhibit 2-16, which of the following points on the production possibilities curve are unattainable with the resources and technology currently available?

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