Question 1

Points inside the PPF are all

Accepted Answer

A) unattainable and have fully employed resources. 
B) attainable and have fully employed resources. 
C) unattainable and have some unemployed resources. 
D) attainable and have some unemployed resources. 
E) unaffordable. 
A) unattainable and have fully employed resources. 
B) attainable and have fully employed resources. 
C) unattainable and have some unemployed resources. 
D) attainable and have some unemployed resources. 
E) unaffordable.

Question 2

When Mik has an absolute advantage in the production of two goods over Tommy, Mik

Accepted Answer

A) is less productive than Tommy. 
B) is better off if he does not engage in specialization and trade with Tommy. 
C) is more productive in producing both goods than Tommy. 
D) always has a comparative advantage over Tommy in the production of both goods. 
E) cannot gain from trade with Tommy. 
A) is less productive than Tommy. 
B) is better off if he does not engage in specialization and trade with Tommy. 
C) is more productive in producing both goods than Tommy. 
D) always has a comparative advantage over Tommy in the production of both goods. 
E) cannot gain from trade with Tommy.

Question 3

The opportunity cost of economic growth is

Accepted Answer

A) 0, because it means an expansion of production possibilities. 
B) the decrease in the current production of productive factors. 
C) a slower accumulation of human capital. 
D) the decrease in the current production of consumption goods. 
E) the increase in the nation's capital stock and/or its technology. 
A) 0, because it means an expansion of production possibilities. 
B) the decrease in the current production of productive factors. 
C) a slower accumulation of human capital. 
D) the decrease in the current production of consumption goods. 
E) the increase in the nation's capital stock and/or its technology.

Question 4

-The figure above shows the production possibilities frontiers for the United Kingdom and France.What is the opportunity cost of one bushel of wheat in France?

Accepted Answer

A) 1/4 of a pound of fish 
B) 4 pounds of fish 
C) 1 pound of fish 
D) 100 pounds of fish 
E) 2 pounds of fish 
A) 1/4 of a pound of fish 
B) 4 pounds of fish 
C) 1 pound of fish 
D) 100 pounds of fish 
E) 2 pounds of fish

Question 5

A country has a comparative advantage in the production of a good if it can

Accepted Answer

A) produce more of the good than another country. 
B) produce more of the good most efficiently. 
C) produce the good on and remain on its production possibilities frontier. 
D) tradeoff producing the good for another good. 
E) produce the good at the lowest opportunity cost. 
A) produce more of the good than another country. 
B) produce more of the good most efficiently. 
C) produce the good on and remain on its production possibilities frontier. 
D) tradeoff producing the good for another good. 
E) produce the good at the lowest opportunity cost.

Question 6

While moving on the production possibilities frontier, if the opportunity cost of producing one good is 1/2, the opportunity cost of producing the other good (in the same range)is

Accepted Answer

A) 1/2. 
B) 1/4. 
C) 2. 
D) 4. 
E) an amount that cannot be calculated without more information. 
A) 1/2. 
B) 1/4. 
C) 2. 
D) 4. 
E) an amount that cannot be calculated without more information.

Question 7

Consider the United States' production of soy beans and running shoes.If the United States has an absolute advantage in the production of both goods compared to China,

Accepted Answer

A) both countries can gain from trade. 
B) only the United States can gain from trade. 
C) only China can gain from trade. 
D) each country will be able to produce at a point beyond its PPF. 
E) only the United States will be able to operate beyond its PPF. 
A) both countries can gain from trade. 
B) only the United States can gain from trade. 
C) only China can gain from trade. 
D) each country will be able to produce at a point beyond its PPF. 
E) only the United States will be able to operate beyond its PPF.

Question 8

The production possibilities frontier illustrates the

Accepted Answer

A) maximum combinations of goods and services that can be produced. 
B) resources the economy possess, but not its level of technology. 
C) goods and services that people want. 
D) limits to people's wants. 
E) amount of each good that people want to buy. 
A) maximum combinations of goods and services that can be produced. 
B) resources the economy possess, but not its level of technology. 
C) goods and services that people want. 
D) limits to people's wants. 
E) amount of each good that people want to buy.

Question 9

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

Accepted Answer

A) 2 computers 
B) 4/3 of a computer 
C) 100 computers 
D) 1/2 of a computer 
E) 1 VCR 
A) 2 computers 
B) 4/3 of a computer 
C) 100 computers 
D) 1/2 of a computer 
E) 1 VCR

Question 10

-Gabriel operates a ranch in Idaho where he raises cattle and grows potatoes.The figure above illustrates his production possibilities frontier.What is Gabriel's opportunity cost of raising another 100 cows?

Accepted Answer

A) 1.25 tons of potatoes 
B) 5.0 tons of potatoes 
C) 3.0 tons of potatoes 
D) 1.0 ton of potatoes 
E) 100 cows 
A) 1.25 tons of potatoes 
B) 5.0 tons of potatoes 
C) 3.0 tons of potatoes 
D) 1.0 ton of potatoes 
E) 100 cows

Question 11

Suppose that after specializing according to comparative advantage, a country is trading with another nation that also specializes according to its comparative advantage.Which of the following statements are true for the first country?
i. It enjoys gains from trade.
ii. It must have an absolute advantage in the production of the good it produces.
iii. It is producing at a point beyond its PPF.

Accepted Answer

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

Question 12

Which of the following best describes comparative advantage?

Accepted Answer

A) being able to produce more output than any other country 
B) using the fewest number of resources to produce a given amount of output 
C) having the largest number of resources compared to other countries 
D) forgoing the fewest units of one product to produce a unit of another product 
E) It is the same as absolute advantage. 
A) being able to produce more output than any other country 
B) using the fewest number of resources to produce a given amount of output 
C) having the largest number of resources compared to other countries 
D) forgoing the fewest units of one product to produce a unit of another product 
E) It is the same as absolute advantage.

Question 13

Why is it likely that the United States has an absolute advantage in goods and yet it still ends up importing them from other countries?

Accepted Answer

The United States might have an absolute

Question 14

Describe the differences between tradeoffs and free lunches in terms of a PPF.

Accepted Answer

A tradeoff is a constraint or limit that

Question 15

Relative to Al, Joe has ________ if Joe can produce a good at a lower opportunity cost than Al.

Accepted Answer

A) a comparative advantage 
B) more production efficiency 
C) a comparative benefit 
D) a marginal benefit 
E) a free lunch 
A) a comparative advantage 
B) more production efficiency 
C) a comparative benefit 
D) a marginal benefit 
E) a free lunch

Question 16

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 17

Once you find the opportunity cost of producing one unit of a good, to find the opportunity cost of producing the other good, you must

Accepted Answer

A) take the inverse. 
B) multiply by the total amount produced of the second good. 
C) divide by the total amount produced of the second good. 
D) do nothing because the opportunity cost for the first good is the same as the opportunity cost for the second good. 
E) None of the answers is correct. 
A) take the inverse. 
B) multiply by the total amount produced of the second good. 
C) divide by the total amount produced of the second good. 
D) do nothing because the opportunity cost for the first good is the same as the opportunity cost for the second good. 
E) None of the answers is correct.

Question 18

-The figure above shows the production possibilities frontier for a country.How does the opportunity cost of compact cars forgone per SUV gained moving from point C to point B compare with the movement from point B to point A?

Accepted Answer

A) The opportunity cost of moving from point C to point B is greater than the movement from point B to point A. 
B) The opportunity cost of moving from point C to point B is the same as the movement from point B to point A. 
C) The opportunity cost of moving from point C to point B is less than the movement from point B to point A. 
D) The opportunity costs cannot be compared because the units of moving from point C to point B differ from the units of moving from point B to point A. 
E) More information is needed to determine how the two opportunity costs compare. 
A) The opportunity cost of moving from point C to point B is greater than the movement from point B to point A. 
B) The opportunity cost of moving from point C to point B is the same as the movement from point B to point A. 
C) The opportunity cost of moving from point C to point B is less than the movement from point B to point A. 
D) The opportunity costs cannot be compared because the units of moving from point C to point B differ from the units of moving from point B to point A. 
E) More information is needed to determine how the two opportunity costs compare.

Question 19

Moving from a point inside the production possibilities frontier to a point on the production possibilities frontier, the opportunity cost of producing more of the good on the horizontal axis

Accepted Answer

A) increases. 
B) decreases. 
C) is constant. 
D) is 0. 
E) is infinite. 
A) increases. 
B) decreases. 
C) is constant. 
D) is 0. 
E) is infinite.

Question 20

-The table above shows a production possibilities frontier for an economy.Which of the following combinations is unattainable?

Accepted Answer

A) 0 loaves of bread and 800 books 
B) 100 loaves of bread and 800 books 
C) 200 loaves of bread and 800 books 
D) 300 loaves of bread and 200 books 
E) 0 loaves of bread and 0 books 
A) 0 loaves of bread and 800 books 
B) 100 loaves of bread and 800 books 
C) 200 loaves of bread and 800 books 
D) 300 loaves of bread and 200 books 
E) 0 loaves of bread and 0 books

Points inside the PPF are all

When Mik has an absolute advantage in the production of two goods over Tommy, Mik

The opportunity cost of economic growth is

-The figure above shows the production possibilities frontiers for the United Kingdom and France.What is the opportunity cost of one bushel of wheat in France?

A country has a comparative advantage in the production of a good if it can

While moving on the production possibilities frontier, if the opportunity cost of producing one good is 1/2, the opportunity cost of producing the other good (in the same range)is

Consider the United States' production of soy beans and running shoes.If the United States has an absolute advantage in the production of both goods compared to China,

The production possibilities frontier illustrates the

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

-Gabriel operates a ranch in Idaho where he raises cattle and grows potatoes.The figure above illustrates his production possibilities frontier.What is Gabriel's opportunity cost of raising another 100 cows?

Which of the following best describes comparative advantage?

Why is it likely that the United States has an absolute advantage in goods and yet it still ends up importing them from other countries?

Describe the differences between tradeoffs and free lunches in terms of a PPF.

Relative to Al, Joe has ________ if Joe can produce a good at a lower opportunity cost than Al.

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.

Once you find the opportunity cost of producing one unit of a good, to find the opportunity cost of producing the other good, you must

-The figure above shows the production possibilities frontier for a country.How does the opportunity cost of compact cars forgone per SUV gained moving from point C to point B compare with the movement from point B to point A?

Moving from a point inside the production possibilities frontier to a point on the production possibilities frontier, the opportunity cost of producing more of the good on the horizontal axis

-The table above shows a production possibilities frontier for an economy.Which of the following combinations is unattainable?

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

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Economic Inequality

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Exam 3: The Economic Problem

Points inside the PPF are all

When Mik has an absolute advantage in the production of two goods over Tommy, Mik

The opportunity cost of economic growth is

-The figure above shows the production possibilities frontiers for the United Kingdom and France.What is the opportunity cost of one bushel of wheat in France?

A country has a comparative advantage in the production of a good if it can

While moving on the production possibilities frontier, if the opportunity cost of producing one good is 1/2, the opportunity cost of producing the other good (in the same range)is

Consider the United States' production of soy beans and running shoes.If the United States has an absolute advantage in the production of both goods compared to China,

The production possibilities frontier illustrates the

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

-Gabriel operates a ranch in Idaho where he raises cattle and grows potatoes.The figure above illustrates his production possibilities frontier.What is Gabriel's opportunity cost of raising another 100 cows?

Which of the following best describes comparative advantage?

Why is it likely that the United States has an absolute advantage in goods and yet it still ends up importing them from other countries?

Describe the differences between tradeoffs and free lunches in terms of a PPF.

Relative to Al, Joe has ________ if Joe can produce a good at a lower opportunity cost than Al.

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.

Once you find the opportunity cost of producing one unit of a good, to find the opportunity cost of producing the other good, you must

-The figure above shows the production possibilities frontier for a country.How does the opportunity cost of compact cars forgone per SUV gained moving from point C to point B compare with the movement from point B to point A?

Moving from a point inside the production possibilities frontier to a point on the production possibilities frontier, the opportunity cost of producing more of the good on the horizontal axis

-The table above shows a production possibilities frontier for an economy.Which of the following combinations is unattainable?

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