Question 1

Which of the following would be most likely to cause the production possibilities frontier for trucks and movies to shift outward?

Accepted Answer

A) A choice of more trucks and less movies. 
B) A choice of more movies and fewer trucks. 
C) A reduction in the labour force. 
D) An increase in the quantity of resources. 
A) A choice of more trucks and less movies. 
B) A choice of more movies and fewer trucks. 
C) A reduction in the labour force. 
D) An increase in the quantity of resources.

Question 2

Which of the following arguments are made in support of immigration?

Accepted Answer

A) It helps developing countries to achieve a higher PPF. 
B) It helps to increase the country's resources of labour and entrepreneurship. 
C) People bring their assets with them, thereby decreasing investment. 
D) Immigration should not be supported. 
A) It helps developing countries to achieve a higher PPF. 
B) It helps to increase the country's resources of labour and entrepreneurship. 
C) People bring their assets with them, thereby decreasing investment. 
D) Immigration should not be supported.

Question 3

In order for an economy to shift its production possibilities curve rightward,it must:

Accepted Answer

A) increase the rate of unemployment. 
B) attract more workers to the country. 
C) use its resources more efficiently. 
D) spend less on research and development. 
A) increase the rate of unemployment. 
B) attract more workers to the country. 
C) use its resources more efficiently. 
D) spend less on research and development.

Question 4

Exhibit 2-6 Production possibilities frontier data
  
-As shown in Exhibit 2-6,a total output of 6 units of consumer goods and 5 units of capital goods is:

Accepted Answer

A) the result of maximum use of the economy's labour force. 
B) an efficient way of using the economy's scarce resources. 
C) unobtainable in this economy. 
D) less than the maximum rate of output for this economy. 
A) the result of maximum use of the economy's labour force. 
B) an efficient way of using the economy's scarce resources. 
C) unobtainable in this economy. 
D) less than the maximum rate of output for this economy.

Question 5

Exhibit 2-2 Production possibilities frontier
  
-In Exhibit 2-2,the opportunity cost of coffee when moving from A to B is:

Accepted Answer

A) 2 million bushels of corn. 
B) 6 million bushels of corn. 
C) 8 million bushels of corn. 
D) 14 million bushels of corn. 
E) not possible to determine. 
A) 2 million bushels of corn. 
B) 6 million bushels of corn. 
C) 8 million bushels of corn. 
D) 14 million bushels of corn. 
E) not possible to determine.

Question 6

Exhibit 2-8 Production possibilities frontier data
  
-Suppose an economy is faced with the production possibilities table shown in Exhibit 2-8.As additional units of capital goods are being produced,the number of consumption goods produced must _____,because _____.

Accepted Answer

A) increase; the production possibility table shows only the maximum efficiency points 
B) increase; of the law of increasing costs 
C) decrease; of the law of decreasing costs 
D) decrease; of the finite nature of the resource base 
E) increase; capital goods will assist in the production of consumer goods 
A) increase; the production possibility table shows only the maximum efficiency points 
B) increase; of the law of increasing costs 
C) decrease; of the law of decreasing costs 
D) decrease; of the finite nature of the resource base 
E) increase; capital goods will assist in the production of consumer goods

Question 7

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

Accepted Answer

A) Unemployment and capital goods production. 
B) Number of resources and consumption goods production. 
C) Composition of the economy's output and number of resources. 
D) Capital and consumption goods production. 
E) Technology and number of resources. 
A) Unemployment and capital goods production. 
B) Number of resources and consumption goods production. 
C) Composition of the economy's output and number of resources. 
D) Capital and consumption goods production. 
E) Technology and number of resources.

Question 8

The rate of future economic growth will be greater if:

Accepted Answer

A) the economy is focused on the production of capital goods. 
B) the existing resources are employed in the production of consumer goods rather than capital goods. 
C) the existing resources are employed equally in the production of consumer goods and capital goods. 
D) the existing resources are saved for later use. 
A) the economy is focused on the production of capital goods. 
B) the existing resources are employed in the production of consumer goods rather than capital goods. 
C) the existing resources are employed equally in the production of consumer goods and capital goods. 
D) the existing resources are saved for later use.

Question 9

A nation can accelerate its economic growth by:

Accepted Answer

A) reducing the number of immigrants allowed into the country. 
B) adding to its stock of capital. 
C) printing more money. 
D) imposing tariffs and quotas on imported goods. 
A) reducing the number of immigrants allowed into the country. 
B) adding to its stock of capital. 
C) printing more money. 
D) imposing tariffs and quotas on imported goods.

Question 10

Exhibit 2-10 Production possibilities frontier
  
-In Exhibit 2-10,which of the following points on the production possibilities curve are full-employment production points?

Accepted Answer

A) A, B, C, 
B) A, B, C, D, U. 
C) E, U, W. 
D) B, C, D, U. 
E)  A, B, C, U. 
A) A, B, C, 
B) A, B, C, D, U. 
C) E, U, W. 
D) B, C, D, U. 
E)  A, B, C, U.

Question 11

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

Accepted Answer

A) is proportional to the production of the good. 
B) is constant to the production of the good. 
C) increases as more of the good is produced. 
D) decreases as more of the good is produced. 
E) increases as less of the good is produced. 
A) is proportional to the production of the good. 
B) is constant to the production of the good. 
C) increases as more of the good is produced. 
D) decreases as more of the good is produced. 
E) increases as less of the good is produced.

Question 12

Exhibit 2-7 Production possibilities frontier
  
-Unattainable combination Z shown in Exhibit 2-7:

Accepted Answer

A) may be achieved by investing in research and development. 
B) can be achieved with using more of existing resources. 
C) will never be achieved. 
D) can easily be achieved by having full employment . 
A) may be achieved by investing in research and development. 
B) can be achieved with using more of existing resources. 
C) will never be achieved. 
D) can easily be achieved by having full employment .

Question 13

Exhibit 2-5 Production possibilities frontier
  
-For the economy shown in Exhibit 2-5,which of the following is true when the economy is at point A?

Accepted Answer

A) Not enough grain is being produced. 
B) There must be resources that are not being used fully. 
C) If the economy reallocates resources from A to D, it has to sacrifice some car production. 
D) Increased grain production would be impossible. 
A) Not enough grain is being produced. 
B) There must be resources that are not being used fully. 
C) If the economy reallocates resources from A to D, it has to sacrifice some car production. 
D) Increased grain production would be impossible.

Question 14

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

Accepted Answer

A) 3 units of consumption goods. 
B) 4 units of consumption goods. 
C) 6 units of consumption goods. 
D) 7 units of consumption goods. 
A) 3 units of consumption goods. 
B) 4 units of consumption goods. 
C) 6 units of consumption goods. 
D) 7 units of consumption goods.

Question 15

The production possibility curve is bowed outward from the origin because of:

Accepted Answer

A) the law of increasing opportunity costs. 
B) the finite nature of the resource base. 
C) inefficiency. 
D) an improper output mix. 
E) unemployment. 
A) the law of increasing opportunity costs. 
B) the finite nature of the resource base. 
C) inefficiency. 
D) an improper output mix. 
E) unemployment.

Question 16

The production possibilities frontier shows that:

Accepted Answer

A) scarcity can be eliminated. 
B) all output combinations are possible. 
C) an economy that is operating efficiently can have more of one good without giving up some of another good. 
D) some of one good must be given up to get more of another good in an economy that is operating efficiently. 
A) scarcity can be eliminated. 
B) all output combinations are possible. 
C) an economy that is operating efficiently can have more of one good without giving up some of another good. 
D) some of one good must be given up to get more of another good in an economy that is operating efficiently.

Question 17

Exhibit 2-1 Production possibilities frontier data
  
-In Exhibit 2-1,the opportunity cost of producing the fourth unit of capital goods is:

Accepted Answer

A) zero. 
B) 1 unit of consumption goods. 
C) 2 units of consumption goods. 
D) 4 units of consumption goods. 
E) not determinable from the information given. 
A) zero. 
B) 1 unit of consumption goods. 
C) 2 units of consumption goods. 
D) 4 units of consumption goods. 
E) not determinable from the information given.

Question 18

Assume Australia can use a given amount of its resources to produce either 20 caravans or 8 automobiles and Japan can employ the same amount of its resources to produce either 20 caravans or 10 automobiles.Australia should specialise in:

Accepted Answer

A) caravans. 
B) automobiles. 
C) both goods. 
D) neither good. 
A) caravans. 
B) automobiles. 
C) both goods. 
D) neither good.

Question 19

The most efficient point on the production possibilities curve is the midpoint on the curve.

Accepted Answer

A) True 
 B)False

Question 20

In order for an economy to shift its production possibilities curve rightward,it must:

Accepted Answer

A) utilise all existing resources. 
B) reduce expenditure on research and development. 
C) increase the unemployment rate. 
D) experience an improvement in its technology. 
A) utilise all existing resources. 
B) reduce expenditure on research and development. 
C) increase the unemployment rate. 
D) experience an improvement in its technology.

Which of the following would be most likely to cause the production possibilities frontier for trucks and movies to shift outward?

Which of the following arguments are made in support of immigration?

In order for an economy to shift its production possibilities curve rightward,it must:

Exhibit 2-6 Production possibilities frontier data -As shown in Exhibit 2-6,a total output of 6 units of consumer goods and 5 units of capital goods is:

Exhibit 2-2 Production possibilities frontier -In Exhibit 2-2,the opportunity cost of coffee when moving from A to B is:

Exhibit 2-8 Production possibilities frontier data -Suppose an economy is faced with the production possibilities table shown in Exhibit 2-8.As additional units of capital goods are being produced,the number of consumption goods produced must _,because _.

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

The rate of future economic growth will be greater if:

A nation can accelerate its economic growth by:

Exhibit 2-10 Production possibilities frontier -In Exhibit 2-10,which of the following points on the production possibilities curve are full-employment production points?

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

Exhibit 2-7 Production possibilities frontier -Unattainable combination Z shown in Exhibit 2-7:

Exhibit 2-5 Production possibilities frontier -For the economy shown in Exhibit 2-5,which of the following is true when the economy is at point A?

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

The production possibility curve is bowed outward from the origin because of:

The production possibilities frontier shows that:

Exhibit 2-1 Production possibilities frontier data -In Exhibit 2-1,the opportunity cost of producing the fourth unit of capital goods is:

Assume Australia can use a given amount of its resources to produce either 20 caravans or 8 automobiles and Japan can employ the same amount of its resources to produce either 20 caravans or 10 automobiles.Australia should specialise in:

The most efficient point on the production possibilities curve is the midpoint on the curve.

In order for an economy to shift its production possibilities curve rightward,it must:

Thinking like an economist

Market demand and supply

Markets in action

Elasticity of demand and supply

Production costs

Perfect competition

Monopoly

Monopolistic competition and oligopoly

Policy issues: resource taxes and climate change

Measuring the size of the economy

Business cycles and economic growth

Inflation and unemployment

A simple model of the macro economy

The monetary and financial system

Macroeconomic policy I: monetary policy

Macroeconomic policy II: fiscal policy

International trade and finance

Applying graphs to economics

Filters

Exam 2: Production possibilities and opportunity cost

Which of the following would be most likely to cause the production possibilities frontier for trucks and movies to shift outward?

Which of the following arguments are made in support of immigration?

In order for an economy to shift its production possibilities curve rightward,it must:

Exhibit 2-6 Production possibilities frontier data -As shown in Exhibit 2-6,a total output of 6 units of consumer goods and 5 units of capital goods is:

Exhibit 2-2 Production possibilities frontier -In Exhibit 2-2,the opportunity cost of coffee when moving from A to B is:

Exhibit 2-8 Production possibilities frontier data -Suppose an economy is faced with the production possibilities table shown in Exhibit 2-8.As additional units of capital goods are being produced,the number of consumption goods produced must _____,because _____.

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

The rate of future economic growth will be greater if:

A nation can accelerate its economic growth by:

Exhibit 2-10 Production possibilities frontier -In Exhibit 2-10,which of the following points on the production possibilities curve are full-employment production points?

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

Exhibit 2-7 Production possibilities frontier -Unattainable combination Z shown in Exhibit 2-7:

Exhibit 2-5 Production possibilities frontier -For the economy shown in Exhibit 2-5,which of the following is true when the economy is at point A?

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

The production possibility curve is bowed outward from the origin because of:

The production possibilities frontier shows that:

Exhibit 2-1 Production possibilities frontier data -In Exhibit 2-1,the opportunity cost of producing the fourth unit of capital goods is:

Assume Australia can use a given amount of its resources to produce either 20 caravans or 8 automobiles and Japan can employ the same amount of its resources to produce either 20 caravans or 10 automobiles.Australia should specialise in:

The most efficient point on the production possibilities curve is the midpoint on the curve.

In order for an economy to shift its production possibilities curve rightward,it must:

Thinking like an economist

Market demand and supply

Markets in action

Elasticity of demand and supply

Production costs

Perfect competition

Monopoly

Monopolistic competition and oligopoly

Policy issues: resource taxes and climate change

Measuring the size of the economy

Business cycles and economic growth

Inflation and unemployment

A simple model of the macro economy

The monetary and financial system

Macroeconomic policy I: monetary policy

Macroeconomic policy II: fiscal policy

International trade and finance

Applying graphs to economics

Filters

Exhibit 2-8 Production possibilities frontier data -Suppose an economy is faced with the production possibilities table shown in Exhibit 2-8.As additional units of capital goods are being produced,the number of consumption goods produced must _,because _.