Exam 1: Foundations of Economics

Use the figure The Production Possibilities Frontier I. If this economy is currently producing a combination of output represented by point F, what is the opportunity cost of producing three more lamps? ​ Figure: The Production Possibilities Frontier I

Use the table How Pam Likes to Spend Her Time. Pam's preferences are ranked 1 to 4 from her favorite activity (1) to her least favorite activity (4). What is her opportunity cost of going to dinner with friends? ​ What is the opportunity cost of going to dinner with friends?

As more salads are produced, increasing amounts of hamburgers must be given up to produce them. What is the shape of the production possibilities frontier (PPF) for salads and hamburgers?

When producers answer the economic question "How should a good be produced?," they are ensuring that:

Use the table Possible Output Combinations Using All Available Resources II. What is true about the opportunity cost of banana muffins as you move from left to right across this table? What is true about the opportunity cost of lattes as you move from left to right across this table?

Which of the following is a macroeconomic topic?

Use the figure Production Possibilities Frontier I. What kind of opportunity costs does the shape of the PPF indicate? ​ Figure: The Production Possibilities Frontier I

Use the figure The Production Possibilities Frontier I. If this economy is currently producing a combination of output represented by point A, what is the opportunity cost of producing three more lamps? ​ Figure: The Production Possibilities Frontier I

Use Figure: The Production Possibilities Frontier for Bouvia III. What happens to the production possibilities frontier (PPF) if there is technological progress that affected only windmill production? How does this affect the opportunity cost of producing windmills? ​ Figure: The Production Possibilities Frontier for Bouvia III ​

Which of the following is true of markets?

Use the figure The Production Possibilities Frontier II. Which point is unattainable? ​ Figure: The Production Possibilities Frontier II ​

Use the figure The Production Possibilities Frontier III. Which point is unattainable given the current availability of resources? ​ Figure: The Production Possibilities Frontier III

Which of the following is a microeconomic topic?

Use the figure Production Possibilities Frontier II. What kind of opportunity costs does the shape of the PPF indicate? ​ Figure: The Production Possibilities Frontier II ​

Economics as a discipline is fundamentally about:

Use the table Possible Output Combinations Using All Available Resources II. If this economy is currently producing two lattes and 18 banana muffins, how many banana muffins must be given up to make two more lattes? ​

Whatever quantity of croissants Stephen bakes, the quantity of kolaches that he gives up baking is identical. What is the shape of Stephen's production possibilities frontier (PPF)?

Use the table Possible Output Combinations Using All Available Resources II. At what combination of production is the opportunity cost of producing lattes the lowest? ​

Use the table Possible Output Combinations Using All Available Resources I. If this economy is currently producing one ukelele and eight wooden bowls, what must happen if it wants to produce one more ukulele? ​

Several households in a neighborhood are cooperating to hold a large weekend yard sale for a variety of unwanted possessions. Most of the items being sold include clothing, books, toys, and tools. Does this satisfy the definition of a market? Explain.