Question 1

Moving from one point to another on a production possibilities frontier implies

Accepted Answer

A)  increasing the production of both goods. 
B)  decreasing the production of both goods. 
C)  increasing the production of one good and decreasing the production of another. 
D)  holding the production levels of both goods constant. 
E)  changing the amount of factors of production that are employed. 
A)  increasing the production of both goods. 
B)  decreasing the production of both goods. 
C)  increasing the production of one good and decreasing the production of another. 
D)  holding the production levels of both goods constant. 
E)  changing the amount of factors of production that are employed.

Question 2

-The figure above illustrates a small country's production possibilities frontier.Moving from point C to point B,the per unit opportunity cost of computers is ________ per computer.

Accepted Answer

A)  4 tablets 
B)  5/4 of a tablet 
C)  4/5 of a tablet 
D)  1/4 of a tablet 
E)  1 computer 
A)  4 tablets 
B)  5/4 of a tablet 
C)  4/5 of a tablet 
D)  1/4 of a tablet 
E)  1 computer

Question 3

-Suppose India and France have the same PPF,shown in the figure above.Based on their current production points,which is France's most likely future PPF?

Accepted Answer

A)  PPF₂ 
B)  PPF₁ 
C)  PPF₀ 
D)  either PPF₀ or PPF₁ 
E)  None of the above because economic growth will not happen in India. 
A)  PPF₂ 
B)  PPF₁ 
C)  PPF₀ 
D)  either PPF₀ or PPF₁ 
E)  None of the above because economic growth will not happen in India.

Question 4

-Suppose India and France have the same PPF,shown in the figure above.Based on their current production points,which is India's most likely future PPF?

Accepted Answer

A)  PPF₂ 
B)  PPF₁ 
C)  PPF₀ 
D)  either PPF₀ or PPF₁ 
E)  None of the above because economic growth will not happen in India. 
A)  PPF₂ 
B)  PPF₁ 
C)  PPF₀ 
D)  either PPF₀ or PPF₁ 
E)  None of the above because economic growth will not happen in India.

Question 5

On a production possibilities frontier,500 pounds of apples and 1,200 pounds of bananas can be produced while at another point on the same frontier,300 pounds of apples and 1,300 pounds of bananas can be produced.Between these points,what is the opportunity cost of producing a pound of bananas?

Accepted Answer

A)  2 pounds of bananas 
B)  200 pounds of apples 
C)  2 pounds of apples 
D)  0.5 a pound of apples 
E)  12/5 = 2.4 pounds of apples 
A)  2 pounds of bananas 
B)  200 pounds of apples 
C)  2 pounds of apples 
D)  0.5 a pound of apples 
E)  12/5 = 2.4 pounds of apples

Question 6

The figure above shows Liz's and Joe's production possibilities for Salads and Smoothies.
-Liz has a comparative advantage in ________ and an absolute advantage in ________.

Accepted Answer

A)  smoothies only; both goods 
B)  smoothies only; smoothies only 
C)  both goods; both goods 
D)  salads only; both goods 
E)  salads only; salads only 
A)  smoothies only; both goods 
B)  smoothies only; smoothies only 
C)  both goods; both goods 
D)  salads only; both goods 
E)  salads only; salads only

Question 7

-The figure above shows the production possibilities frontier for a country.The opportunity cost of a gallon of milk between combination point A and B is

Accepted Answer

A)  4 gallons of ice cream for a gallon of milk. 
B)  3 gallons of ice cream for a gallon of milk. 
C)  1 gallon of ice cream for a gallon of milk. 
D)  1/3 of a gallon of ice cream for a gallon of milk. 
E)  zero because at point A zero milk is being produced. 
A)  4 gallons of ice cream for a gallon of milk. 
B)  3 gallons of ice cream for a gallon of milk. 
C)  1 gallon of ice cream for a gallon of milk. 
D)  1/3 of a gallon of ice cream for a gallon of milk. 
E)  zero because at point A zero milk is being produced.

Question 8

$$\begin{array} { c c c } 
\hline \text { Possibility } & \text { Capital goods } & \text { Consumption goods } \
\hline \text { A } & 0 & 60 \
\text { B } & 2 & 55 \
\text { C } & 4 & 45 \
\text { D } & 6 & 25 \
\text { E } & 8 & 0
\end{array}$$
-The table above presents the production possibilities frontier for a nation.Using the information in the table,moving from possibility C to B means that

Accepted Answer

A)  4 units of capital goods are given up to get 55 units of consumption goods. 
B)  2 units of capital goods are given up to get 55 additional units of consumption goods. 
C)  4 units of capital goods are given up to get 10 additional units of consumption goods. 
D)  4 units of capital goods are given up to get 45 units of consumption goods. 
E)  2 units of capital goods are given up to get 10 additional units of consumption goods. 
A)  4 units of capital goods are given up to get 55 units of consumption goods. 
B)  2 units of capital goods are given up to get 55 additional units of consumption goods. 
C)  4 units of capital goods are given up to get 10 additional units of consumption goods. 
D)  4 units of capital goods are given up to get 45 units of consumption goods. 
E)  2 units of capital goods are given up to get 10 additional units of consumption goods.

Question 9

$\begin{array}{c}
\begin{array}{lc}
\text { Nation A's production in } 1 \text { day } \
\hline \text { Computers } & 100 \
\text { Software } & 140
\end{array}
\begin{array}{lc}
\text { Nation B's production in } 1 \text { day } \
\hline \text { Computers } & 120 \
\text { Software } & 150 
\end{array}
\end{array}$
-Two nations can produce computers and software in the amounts given in the table above.Does either nation have an absolute advantage in producing the products? Which nation has a comparative advantage in computers? Which nation has a comparative advantage in software? Explain your answers.

Accepted Answer

Nation B has an absolute advantage in pr

Question 10

Japan can use all of its resources to produce 100 videos or 400 shoes.China can use all of its resources to produce 25 videos or 200 shoes.Which nation has the comparative advantage in shoes and which nation has the comparative advantage in videos?

Accepted Answer

In Japan,the opportunity cost of produci

Question 11

The production possibilities frontier is a graph showing the

Accepted Answer

A)  exact point of greatest efficiency for producing goods and services. 
B)  tradeoff between free lunches. 
C)  maximum combinations of goods and services that can be produced. 
D)  minimum combinations of goods and services that can be produced. 
E)  resources available for the economy's production use. 
A)  exact point of greatest efficiency for producing goods and services. 
B)  tradeoff between free lunches. 
C)  maximum combinations of goods and services that can be produced. 
D)  minimum combinations of goods and services that can be produced. 
E)  resources available for the economy's production use.

Question 12

The production possibilities frontier is a boundary that separates

Accepted Answer

A)  the combinations of goods that can be produced from the combinations of services. 
B)  attainable combinations of goods and services that can be produced from unattainable ones. 
C)  equitable combinations of goods and services that can be produced from inequitable ones. 
D)  fair combinations of goods and services that can be consumed from unfair ones. 
E)  affordable production points from unaffordable points. 
A)  the combinations of goods that can be produced from the combinations of services. 
B)  attainable combinations of goods and services that can be produced from unattainable ones. 
C)  equitable combinations of goods and services that can be produced from inequitable ones. 
D)  fair combinations of goods and services that can be consumed from unfair ones. 
E)  affordable production points from unaffordable points.

Question 13

-The above figure shows the production possibility frontier for a country.What is the opportunity cost to move from point D to point E?

Accepted Answer

A)  6 thousand bottles of wine 
B)  15 thousand bottles of wine 
C)  6 tons of rice 
D)  9 thousand bottles of wine 
E)  Nothing, it is a free lunch. 
A)  6 thousand bottles of wine 
B)  15 thousand bottles of wine 
C)  6 tons of rice 
D)  9 thousand bottles of wine 
E)  Nothing, it is a free lunch.

Question 14

Scott and Cindy both produce only pizza and tacos.In one hour,Scott can produce 20 pizzas or 40 tacos.In one hour,Cindy can produce 30 pizzas or 40 tacos.Based on these data,

Accepted Answer

A)  Cindy has a comparative advantage at producing tacos. 
B)  Scott has a comparative advantage at producing tacos. 
C)  Cindy and Scott have the same comparative advantage in producing tacos. 
D)  neither Cindy nor Scott has a comparative advantage in producing tacos. 
E)  Cindy and Scott have the same comparative advantage in producing pizzas. 
A)  Cindy has a comparative advantage at producing tacos. 
B)  Scott has a comparative advantage at producing tacos. 
C)  Cindy and Scott have the same comparative advantage in producing tacos. 
D)  neither Cindy nor Scott has a comparative advantage in producing tacos. 
E)  Cindy and Scott have the same comparative advantage in producing pizzas.

Question 15

-Suppose Puerto Rico and Hawaii currently have the same production possibilities so that the above figure is the PPF for hotels and consumption goods in the two areas.Hotels are a capital good that,once built,will help produce still more consumption goods.If Puerto Rico produces more hotels than Hawaii,

Accepted Answer

A)  Hawaii's PPF will shift outward further than Puerto Rico's PPF. 
B)  Hawaii's PPF will shift inward. 
C)  Puerto Rico's PPF will not shift. 
D)  Puerto Rico's and Hawaii's PPF will shift outward by the same amount. 
E)  Puerto Rico's PPF will shift outward further than Hawaii's PPF. 
A)  Hawaii's PPF will shift outward further than Puerto Rico's PPF. 
B)  Hawaii's PPF will shift inward. 
C)  Puerto Rico's PPF will not shift. 
D)  Puerto Rico's and Hawaii's PPF will shift outward by the same amount. 
E)  Puerto Rico's PPF will shift outward further than Hawaii's PPF.

Question 16

$$\begin{array} { l | c c c } 
& \begin{array} { l } 
\text { Potatoes } \
\text { (pounds) }
\end{array} & \begin{array} { c } 
 \text { Tomatoes } \
\text { (pounds) }
\end{array} \
\hline \text { Huey } & 12 & \text { or } & 8 \
\text { Steve } & 6 & \text { or } & 2
\end{array}$$
-Huey and Steve can grow potatoes or tomatoes.The table above shows the pounds of potatoes and tomatoes Huey and Steve can grow in a week.Based on the table,Huey's opportunity cost of producing one pound of tomatoes is

Accepted Answer

A)  1.5 pounds of potatoes. 
B)  0.66 pound of potatoes. 
C)  0, because he has an absolute advantage in it. 
D)  0, because he has a comparative advantage in it. 
E)  1.0 pound of potatoes. 
A)  1.5 pounds of potatoes. 
B)  0.66 pound of potatoes. 
C)  0, because he has an absolute advantage in it. 
D)  0, because he has a comparative advantage in it. 
E)  1.0 pound of potatoes.

Question 17

A country produces only cans of soup and ink pens.If the country produces on its bowed outward PPF and increases the production of cans of soup,the opportunity cost of additional

Accepted Answer

A)  cans of soup is increasing. 
B)  cans of soup is decreasing. 
C)  cans of soup remains unchanged. 
D)  ink pens is increasing. 
E)  More information is needed to determine what happens to the opportunity cost. 
A)  cans of soup is increasing. 
B)  cans of soup is decreasing. 
C)  cans of soup remains unchanged. 
D)  ink pens is increasing. 
E)  More information is needed to determine what happens to the opportunity cost.

Question 18

-The above figure shows the production possibility frontier for an economy.The point or points that are attainable are

Accepted Answer

A)  points B and C. 
B)  points A, B, and C. 
C)  point E. 
D)  points A, B, C, and D. 
E)  points A and D. 
A)  points B and C. 
B)  points A, B, and C. 
C)  point E. 
D)  points A, B, C, and D. 
E)  points A and D.

Question 19

-The figure above shows the production possibilities frontier for a country.In order for it to move from producing at point A to producing at point B,the country would need to incur an opportunity cost of

Accepted Answer

A)  1 million SUVs. 
B)  3 million SUVs. 
C)  4 million SUVs. 
D)  3 million compact cars. 
E)  0 because the gain in compact cars exceeds the loss in SUVs. 
A)  1 million SUVs. 
B)  3 million SUVs. 
C)  4 million SUVs. 
D)  3 million compact cars. 
E)  0 because the gain in compact cars exceeds the loss in SUVs.

Question 20

As technology advances,

Accepted Answer

A)  all opportunity costs decrease. 
B)  the PPF shifts outward. 
C)  a country moves toward the midpoint along its PPF and can produce more of both goods. 
D)  all opportunity costs increase. 
E)  the PPF shifts inward because unemployment occurs. 
A)  all opportunity costs decrease. 
B)  the PPF shifts outward. 
C)  a country moves toward the midpoint along its PPF and can produce more of both goods. 
D)  all opportunity costs increase. 
E)  the PPF shifts inward because unemployment occurs.

Moving from one point to another on a production possibilities frontier implies

-The figure above illustrates a small country's production possibilities frontier.Moving from point C to point B,the per unit opportunity cost of computers is ________ per computer.

-Suppose India and France have the same PPF,shown in the figure above.Based on their current production points,which is France's most likely future PPF?

-Suppose India and France have the same PPF,shown in the figure above.Based on their current production points,which is India's most likely future PPF?

On a production possibilities frontier,500 pounds of apples and 1,200 pounds of bananas can be produced while at another point on the same frontier,300 pounds of apples and 1,300 pounds of bananas can be produced.Between these points,what is the opportunity cost of producing a pound of bananas?

The figure above shows Liz's and Joe's production possibilities for Salads and Smoothies. -Liz has a comparative advantage in and an absolute advantage in .

-The figure above shows the production possibilities frontier for a country.The opportunity cost of a gallon of milk between combination point A and B is

Possibility Capital goods Consumption goods A 0 60 B 2 55 C 4 45 D 6 25 E 8 0 -The table above presents the production possibilities frontier for a nation.Using the information in the table,moving from possibility C to B means that

Japan can use all of its resources to produce 100 videos or 400 shoes.China can use all of its resources to produce 25 videos or 200 shoes.Which nation has the comparative advantage in shoes and which nation has the comparative advantage in videos?

The production possibilities frontier is a graph showing the

The production possibilities frontier is a boundary that separates

-The above figure shows the production possibility frontier for a country.What is the opportunity cost to move from point D to point E?

Scott and Cindy both produce only pizza and tacos.In one hour,Scott can produce 20 pizzas or 40 tacos.In one hour,Cindy can produce 30 pizzas or 40 tacos.Based on these data,

Potatoes (pounds) Tomatoes (pounds) Huey 12 or 8 Steve 6 or 2 -Huey and Steve can grow potatoes or tomatoes.The table above shows the pounds of potatoes and tomatoes Huey and Steve can grow in a week.Based on the table,Huey's opportunity cost of producing one pound of tomatoes is

A country produces only cans of soup and ink pens.If the country produces on its bowed outward PPF and increases the production of cans of soup,the opportunity cost of additional

-The above figure shows the production possibility frontier for an economy.The point or points that are attainable are

-The figure above shows the production possibilities frontier for a country.In order for it to move from producing at point A to producing at point B,the country would need to incur an opportunity cost of

As technology advances,

Getting Started

The U.S.and Global Economies

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 3: The Economic Problem

Moving from one point to another on a production possibilities frontier implies

-The figure above illustrates a small country's production possibilities frontier.Moving from point C to point B,the per unit opportunity cost of computers is ________ per computer.

-Suppose India and France have the same PPF,shown in the figure above.Based on their current production points,which is France's most likely future PPF?

-Suppose India and France have the same PPF,shown in the figure above.Based on their current production points,which is India's most likely future PPF?

On a production possibilities frontier,500 pounds of apples and 1,200 pounds of bananas can be produced while at another point on the same frontier,300 pounds of apples and 1,300 pounds of bananas can be produced.Between these points,what is the opportunity cost of producing a pound of bananas?

The figure above shows Liz's and Joe's production possibilities for Salads and Smoothies. -Liz has a comparative advantage in ________ and an absolute advantage in ________.

-The figure above shows the production possibilities frontier for a country.The opportunity cost of a gallon of milk between combination point A and B is

Possibility Capital goods Consumption goods A 0 60 B 2 55 C 4 45 D 6 25 E 8 0 -The table above presents the production possibilities frontier for a nation.Using the information in the table,moving from possibility C to B means that

Japan can use all of its resources to produce 100 videos or 400 shoes.China can use all of its resources to produce 25 videos or 200 shoes.Which nation has the comparative advantage in shoes and which nation has the comparative advantage in videos?

The production possibilities frontier is a graph showing the

The production possibilities frontier is a boundary that separates

-The above figure shows the production possibility frontier for a country.What is the opportunity cost to move from point D to point E?

Scott and Cindy both produce only pizza and tacos.In one hour,Scott can produce 20 pizzas or 40 tacos.In one hour,Cindy can produce 30 pizzas or 40 tacos.Based on these data,

Potatoes (pounds) Tomatoes (pounds) Huey 12 or 8 Steve 6 or 2 -Huey and Steve can grow potatoes or tomatoes.The table above shows the pounds of potatoes and tomatoes Huey and Steve can grow in a week.Based on the table,Huey's opportunity cost of producing one pound of tomatoes is

A country produces only cans of soup and ink pens.If the country produces on its bowed outward PPF and increases the production of cans of soup,the opportunity cost of additional

-The above figure shows the production possibility frontier for an economy.The point or points that are attainable are

-The figure above shows the production possibilities frontier for a country.In order for it to move from producing at point A to producing at point B,the country would need to incur an opportunity cost of

As technology advances,

Getting Started

The U.S.and Global Economies

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

The figure above shows Liz's and Joe's production possibilities for Salads and Smoothies. -Liz has a comparative advantage in and an absolute advantage in .