Question 1

-In the table above,Jack's opportunity cost for 1 pound of food is ________ and his opportunity cost for 1 pound of clothing is ________.

Accepted Answer

A)  1 pound of clothing; 4 pounds of food 
B)  1/2 of a pound of clothing; 2 pounds of food 
C)  1/3 of a pound of clothing; 3 pounds of food 
D)  2 pounds of clothing; 2 pounds of food 
E)  1 pound of food; 1 pound of clothing 
A)  1 pound of clothing; 4 pounds of food 
B)  1/2 of a pound of clothing; 2 pounds of food 
C)  1/3 of a pound of clothing; 3 pounds of food 
D)  2 pounds of clothing; 2 pounds of food 
E)  1 pound of food; 1 pound of clothing

Question 2

The figure above show Liz's and Joe's production possibilities for Salads and Smoothies.
-Given the information in the figure above,Joe can benefit from trade as far as the price at which he buys Liz's smoothies is

Accepted Answer

A)  below 5 salads per smoothie. 
B)  not higher than 2 salads per smoothie. 
C)  not lower than 2 salads per smoothie. 
D)  not lower than 1 salad per smoothie. 
E)  not higher than 4 salads per smoothie. 
A)  below 5 salads per smoothie. 
B)  not higher than 2 salads per smoothie. 
C)  not lower than 2 salads per smoothie. 
D)  not lower than 1 salad per smoothie. 
E)  not higher than 4 salads per smoothie.

Question 3

How is economic growth shown in a production possibilities frontier graph?

Accepted Answer

Economic growth is i

Question 4

A movement from a point inside the production possibilities frontier to a point on the production possibilities frontier represents

Accepted Answer

A)  a tradeoff. 
B)  a free lunch. 
C)  full employment of labor but not capital. 
D)  unemployment of labor but not capital. 
E)  an infinite opportunity cost. 
A)  a tradeoff. 
B)  a free lunch. 
C)  full employment of labor but not capital. 
D)  unemployment of labor but not capital. 
E)  an infinite opportunity cost.

Question 5

Suppose that in a PPF graph,wheat is on the vertical axis and jets are on the horizontal axis.Moving down along the PPF,the

Accepted Answer

A)  number of jets increases and the opportunity cost of jets increases. 
B)  amount of wheat increases and the opportunity cost of wheat increases. 
C)  number of jets increases and the opportunity cost of jets decreases. 
D)  amount of wheat increases and opportunity cost of wheat decreases. 
E)  opportunity cost of jets and wheat both increase. 
A)  number of jets increases and the opportunity cost of jets increases. 
B)  amount of wheat increases and the opportunity cost of wheat increases. 
C)  number of jets increases and the opportunity cost of jets decreases. 
D)  amount of wheat increases and opportunity cost of wheat decreases. 
E)  opportunity cost of jets and wheat both increase.

Question 6

To achieve gains from trade,a country

Accepted Answer

A)  needs to have an absolute advantage in the production of all goods. 
B)  specializes in the producing a good in which it has a lower opportunity cost. 
C)  must produce at a point beyond its PPF. 
D)  should produce at the midpoint of its PPF. 
E)  needs to have an absolute advantage in the production of at least one good. 
A)  needs to have an absolute advantage in the production of all goods. 
B)  specializes in the producing a good in which it has a lower opportunity cost. 
C)  must produce at a point beyond its PPF. 
D)  should produce at the midpoint of its PPF. 
E)  needs to have an absolute advantage in the production of at least one good.

Question 7

-The table above shows a production possibilities frontier for an economy.If the economy tried to produce a combination of 250 loaves of bread and 800 books,

Accepted Answer

A)  there is some unemployment. 
B)  there is full employment. 
C)  the tradeoff between bread and books is inefficient. 
D)  it cannot produce this combination because it lacks enough resources or technology. 
E)  it is enjoying a free lunch. 
A)  there is some unemployment. 
B)  there is full employment. 
C)  the tradeoff between bread and books is inefficient. 
D)  it cannot produce this combination because it lacks enough resources or technology. 
E)  it is enjoying a free lunch.

Question 8

As we move along the production possibilities frontier,

Accepted Answer

A)  the production of one good increases as the production of the other good decreases. 
B)  the possibilities of tradeoffs diminish. 
C)  a tradeoff is not possible because nations need all goods. 
D)  more of both goods can be produced. 
E)  less of both goods can be produced. 
A)  the production of one good increases as the production of the other good decreases. 
B)  the possibilities of tradeoffs diminish. 
C)  a tradeoff is not possible because nations need all goods. 
D)  more of both goods can be produced. 
E)  less of both goods can be produced.

Question 9

Suppose a country operates on its production possibility frontier when it produces 1000 books and 1000 tables.The combination of _________ reflects ____________

Accepted Answer

A)  500 books and 1000 tables; an inefficient but attainable point. 
B)  1000 books and 500 tables; an efficient point. 
C)  1000 books and 1000 tables; a free lunch. 
D)  500 books and 500 tables; an attainable and efficient point. 
E)  1000 books and 1500 tables; a free lunch. 
A)  500 books and 1000 tables; an inefficient but attainable point. 
B)  1000 books and 500 tables; an efficient point. 
C)  1000 books and 1000 tables; a free lunch. 
D)  500 books and 500 tables; an attainable and efficient point. 
E)  1000 books and 1500 tables; a free lunch.

Question 10

-The figure above shows a nation's production possibilities frontier.In the figure,point B shows

Accepted Answer

A)  an unattainable point. 
B)  an attainable point. 
C)  a point with a free lunch. 
D)  a point with no trade off. 
E)  a point at which there are unemployed resources. 
A)  an unattainable point. 
B)  an attainable point. 
C)  a point with a free lunch. 
D)  a point with no trade off. 
E)  a point at which there are unemployed resources.

Question 11

Economic growth depends upon which of the following?
i.Improving the quality of labor
ii.Technological advancement
iii.Increasing the amount of capital

Accepted Answer

A)  i only 
B)  ii only 
C)  iii only 
D)  i and iii 
E)  i, ii, and iii 
A)  i only 
B)  ii only 
C)  iii only 
D)  i and iii 
E)  i, ii, and iii

Question 12

When production efficiency does NOT occur,
i.an economy is producing at a point within its PPF.
ii.there are unemployed resources.
iii.allocative efficiency can not occur.

Accepted Answer

A)  i only 
B)  i and ii 
C)  iii only 
D)  i and iii 
E)  i, ii, and iii 
A)  i only 
B)  i and ii 
C)  iii only 
D)  i and iii 
E)  i, ii, and iii

Question 13

When a nation is producing on its production possibilities frontier,if more resources are used to produce one good,then the production of other goods

Accepted Answer

A)  must increase. 
B)  must decrease. 
C)  must remain the same. 
D)  must change but they might increase or decrease. 
E)  might increase if the nation can produce more efficiently. 
A)  must increase. 
B)  must decrease. 
C)  must remain the same. 
D)  must change but they might increase or decrease. 
E)  might increase if the nation can produce more efficiently.

Question 14

As an economy grows,

Accepted Answer

A)  its PPF shifts outward. 
B)  it can eliminate scarcity. 
C)  the opportunity cost of production will approach 0. 
D)  the opportunity cost of production will increase. 
E)  its PPF does not shift; instead, the production point moves from inside the PPF to be closer to the PPF. 
A)  its PPF shifts outward. 
B)  it can eliminate scarcity. 
C)  the opportunity cost of production will approach 0. 
D)  the opportunity cost of production will increase. 
E)  its PPF does not shift; instead, the production point moves from inside the PPF to be closer to the PPF.

Question 15

A free lunch (the absence of a tradeoff)when the production of a good is increased is possible for the entire economy only if

Accepted Answer

A)  less of some product is produced. 
B)  prices are decreased. 
C)  prices are increased. 
D)  resources are used inefficiently. 
E)  there is a movement along the PPF. 
A)  less of some product is produced. 
B)  prices are decreased. 
C)  prices are increased. 
D)  resources are used inefficiently. 
E)  there is a movement along the PPF.

Question 16

-Suppose that Germany,France,Estonia,and India all have the same production possibilities,illustrated in the figure above.Based on the production points in the figure,Germany is most likely to expand its PPF to

Accepted Answer

A)  PPF₃ or PPF₂. 
B)  PPF₃. 
C)  PPF₁. 
D)  PPF₁. or PPF₂. 
E)  PPF₂. 
A)  PPF₃ or PPF₂. 
B)  PPF₃. 
C)  PPF₁. 
D)  PPF₁. or PPF₂. 
E)  PPF₂.

Question 17

-In the above figure,Jill's opportunity cost of producing 1 gallon of bottled water is ________ of soda.

Accepted Answer

A)  2 gallons 
B)  1/2 of a gallon 
C)  4 gallons 
D)  1 gallon 
E)  1/4 of a gallon 
A)  2 gallons 
B)  1/2 of a gallon 
C)  4 gallons 
D)  1 gallon 
E)  1/4 of a gallon

Question 18

The figure above show Liz's and Joe's production possibilities for Salads and Smoothies.
-Given the information in the figure above,Liz ________ benefit from trade with Joe because ________.

Accepted Answer

A)  can; each of them has a comparative advantage in one of the goods 
B)  can; each of them has an absolute advantage in one of the goods 
C)  cannot; she has an absolute advantage in both goods 
D)  cannot; she has a comparative advantage in both goods 
E)  can; Joe is more productive in producing one of the goods 
A)  can; each of them has a comparative advantage in one of the goods 
B)  can; each of them has an absolute advantage in one of the goods 
C)  cannot; she has an absolute advantage in both goods 
D)  cannot; she has a comparative advantage in both goods 
E)  can; Joe is more productive in producing one of the goods

Question 19

If John can produce 10 chairs or 20 lamps during a week while Mary can produce 12 chairs or 22 lamps in the same time,who has the absolute advantage in producing each good?

Accepted Answer

A)  Mary in producing both goods 
B)  John in producing both goods 
C)  Mary in producing chairs, John in producing lamps 
D)  John in producing chairs, Mary in producing lamps 
E)  Both Mary and John in both goods 
A)  Mary in producing both goods 
B)  John in producing both goods 
C)  Mary in producing chairs, John in producing lamps 
D)  John in producing chairs, Mary in producing lamps 
E)  Both Mary and John in both goods

Question 20

Mac can bake more cookies than Monica per hour.It must be true that

Accepted Answer

A)  Monica has an absolute advantage in cookie baking. 
B)  Mac has an absolute advantage in baking cookies. 
C)  Mac has a comparative advantage in baking cookies. 
D)  Monica has a comparative advantage in baking cookies. 
E)  Mac cannot benefit by trade between the two of them. 
A)  Monica has an absolute advantage in cookie baking. 
B)  Mac has an absolute advantage in baking cookies. 
C)  Mac has a comparative advantage in baking cookies. 
D)  Monica has a comparative advantage in baking cookies. 
E)  Mac cannot benefit by trade between the two of them.

-In the table above,Jack's opportunity cost for 1 pound of food is and his opportunity cost for 1 pound of clothing is .

The figure above show Liz's and Joe's production possibilities for Salads and Smoothies. -Given the information in the figure above,Joe can benefit from trade as far as the price at which he buys Liz's smoothies is

How is economic growth shown in a production possibilities frontier graph?

A movement from a point inside the production possibilities frontier to a point on the production possibilities frontier represents

Suppose that in a PPF graph,wheat is on the vertical axis and jets are on the horizontal axis.Moving down along the PPF,the

To achieve gains from trade,a country

-The table above shows a production possibilities frontier for an economy.If the economy tried to produce a combination of 250 loaves of bread and 800 books,

As we move along the production possibilities frontier,

Suppose a country operates on its production possibility frontier when it produces 1000 books and 1000 tables.The combination of _ reflects ____

-The figure above shows a nation's production possibilities frontier.In the figure,point B shows

Economic growth depends upon which of the following? i.Improving the quality of labor ii.Technological advancement iii.Increasing the amount of capital

When production efficiency does NOT occur, i.an economy is producing at a point within its PPF. ii.there are unemployed resources. iii.allocative efficiency can not occur.

When a nation is producing on its production possibilities frontier,if more resources are used to produce one good,then the production of other goods

As an economy grows,

A free lunch (the absence of a tradeoff)when the production of a good is increased is possible for the entire economy only if

-Suppose that Germany,France,Estonia,and India all have the same production possibilities,illustrated in the figure above.Based on the production points in the figure,Germany is most likely to expand its PPF to

-In the above figure,Jill's opportunity cost of producing 1 gallon of bottled water is ________ of soda.

The figure above show Liz's and Joe's production possibilities for Salads and Smoothies. -Given the information in the figure above,Liz benefit from trade with Joe because .

If John can produce 10 chairs or 20 lamps during a week while Mary can produce 12 chairs or 22 lamps in the same time,who has the absolute advantage in producing each good?

Mac can bake more cookies than Monica per hour.It must be true that

Getting Started

The Usand 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

-In the table above,Jack's opportunity cost for 1 pound of food is ________ and his opportunity cost for 1 pound of clothing is ________.

The figure above show Liz's and Joe's production possibilities for Salads and Smoothies. -Given the information in the figure above,Joe can benefit from trade as far as the price at which he buys Liz's smoothies is

How is economic growth shown in a production possibilities frontier graph?

A movement from a point inside the production possibilities frontier to a point on the production possibilities frontier represents

Suppose that in a PPF graph,wheat is on the vertical axis and jets are on the horizontal axis.Moving down along the PPF,the

To achieve gains from trade,a country

-The table above shows a production possibilities frontier for an economy.If the economy tried to produce a combination of 250 loaves of bread and 800 books,

As we move along the production possibilities frontier,

Suppose a country operates on its production possibility frontier when it produces 1000 books and 1000 tables.The combination of _________ reflects ____________

-The figure above shows a nation's production possibilities frontier.In the figure,point B shows

Economic growth depends upon which of the following? i.Improving the quality of labor ii.Technological advancement iii.Increasing the amount of capital

When production efficiency does NOT occur, i.an economy is producing at a point within its PPF. ii.there are unemployed resources. iii.allocative efficiency can not occur.

When a nation is producing on its production possibilities frontier,if more resources are used to produce one good,then the production of other goods

As an economy grows,

A free lunch (the absence of a tradeoff)when the production of a good is increased is possible for the entire economy only if

-Suppose that Germany,France,Estonia,and India all have the same production possibilities,illustrated in the figure above.Based on the production points in the figure,Germany is most likely to expand its PPF to

-In the above figure,Jill's opportunity cost of producing 1 gallon of bottled water is ________ of soda.

The figure above show Liz's and Joe's production possibilities for Salads and Smoothies. -Given the information in the figure above,Liz ________ benefit from trade with Joe because ________.

If John can produce 10 chairs or 20 lamps during a week while Mary can produce 12 chairs or 22 lamps in the same time,who has the absolute advantage in producing each good?

Mac can bake more cookies than Monica per hour.It must be true that

Getting Started

The Usand 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

-In the table above,Jack's opportunity cost for 1 pound of food is and his opportunity cost for 1 pound of clothing is .

Suppose a country operates on its production possibility frontier when it produces 1000 books and 1000 tables.The combination of _ reflects ____

The figure above show Liz's and Joe's production possibilities for Salads and Smoothies. -Given the information in the figure above,Liz benefit from trade with Joe because .