Exam 2: The Economic Problem

Choose the correct statements. 1. Opportunity cost of a good is the increase in the quantity produced of one good divided by the decrease in the quantity produced of another good as we move along the PPF. 2. The opportunity cost of an action is the highest-valued alternative forgone. 3. Opportunity cost is a ratio. 4. There is no relationship between the opportunity cost of producing an additional good measured on the x-axis and the opportunity cost of producing an additional good measured on the y-axis.

If Harold must decrease production of some other good to increase production of good X, then Harold

A medical clinic has 10 workers. Each worker can produce a maximum of either 2 units of medical services or 5 units of secretarial services a day. One day, the firm decides it would like to produce 10 units of medical services and 30 units of secretarial services. This output level is

The fact that resources are not equally productive in all activities

In general, if country A is accumulating capital at a faster rate than country B, then country A

Use the table below to answer the following questions. Table 2.1.2 Production Possibilities -Refer to Table 2.1.2. According to this production possibilities frontier,

If Harold can increase production of good X without decreasing production of any other good, then Harold

As we move down the bowed-out production possibilities frontier, opportunity cost

Ted chooses to study for his economics exam instead of going to the concert. The concert he will miss is Ted's ________ of studying for the exam.

Use the figure below to answer the following questions. Figure 2.1.2 -Refer to the production possibilities frontier in Figure 2.1.2. At point A, the opportunity cost of increasing production of Y to 80 units is

Tom and Don have different opportunity costs of producing two goods. If Tom and Don specialize in producing the goods in which each has a comparative advantage and they exchange goods, then

When the market achieves allocative efficiency,

Use the figure below to answer the following questions. Figure 2.1.2 -Refer to the production possibilities frontier in Figure 2.1.2. At point C, the opportunity cost of producing one more unit of X is

Table 2.1.1 The following table gives points on the production possibilities frontier for goods X and Y. -From the data in Table 2.1.1, the production of 10 units of X and 28 units of Y is

Complete the following sentence. As you consume more and more of a good,

A medical clinic has 10 workers. Each worker can produce a maximum of either 2 units of medical services or 5 units of secretarial services a day. One day, the firm decides it would like to produce 16 units of medical services and 5 units of secretarial services. This output level is

A point inside a production possibilities frontier

The concept of opportunity cost

A production possibilities frontier is negatively sloped because

Consider Toyota's PPF, which measures cars on the x-axis and new skills and new technology on the y-axis. Toyota's opportunity cost of upgrading workers' skills and creating new technology is