Question 1

Moving between two points on a PPF, a country gains 6 automobiles and forgoes 3 trucks.The opportunity cost of 1 automobile is

Accepted Answer

A) 3 trucks. 
B) 6 automobiles - 3 trucks. 
C) 2 trucks. 
D) 1/2 of a truck. 
E) 1 automobile. 
A) 3 trucks. 
B) 6 automobiles - 3 trucks. 
C) 2 trucks. 
D) 1/2 of a truck. 
E) 1 automobile.

Question 2

If a country is operating at a point of production efficiency,

Accepted Answer

A) it enjoys a free lunch when increasing production. 
B) it produces on its production possibilities frontier. 
C) it must specialize in the production of a good. 
D) it operates on its trade line. 
E) it cannot be producing at its point of comparative advantage. 
A) it enjoys a free lunch when increasing production. 
B) it produces on its production possibilities frontier. 
C) it must specialize in the production of a good. 
D) it operates on its trade line. 
E) it cannot be producing at its point of comparative advantage.

Question 3

How can a combination of goods be unattainable?

Accepted Answer

A combination of goods can be

Question 4

While moving along a production possibilities frontier, the amount of labor ________, the amount of capital ________, and the level of technology ________.

Accepted Answer

A) is fixed; is fixed; varies 
B) varies; is fixed; varies 
C) varies; is fixed; is fixed 
D) is fixed; is fixed; is fixed 
E) varies; varies; varies 
A) is fixed; is fixed; varies 
B) varies; is fixed; varies 
C) varies; is fixed; is fixed 
D) is fixed; is fixed; is fixed 
E) varies; varies; varies

Question 5

-The table above gives four production possibilities for airplanes and cruise ships.In possibility A, how many resources are devoted to the production of airplanes?

Accepted Answer

A) 0 
B) few 
C) most 
D) all 
E) It is impossible to tell without more information about the prices of airplanes and cruise ships. 
A) 0 
B) few 
C) most 
D) all 
E) It is impossible to tell without more information about the prices of airplanes and cruise ships.

Question 6

The idea of increasing opportunity cost is reflected in the

Accepted Answer

A) bowed out shape of the production possibilities frontier. 
B) bowed in shape of the production possibilities frontier. 
C) linear shape of the production possibilities frontier. 
D) positive slope of the production possibilities frontier. 
E) fact that the PPF shows there are unattainable production points. 
A) bowed out shape of the production possibilities frontier. 
B) bowed in shape of the production possibilities frontier. 
C) linear shape of the production possibilities frontier. 
D) positive slope of the production possibilities frontier. 
E) fact that the PPF shows there are unattainable production points.

Question 7

The figure above show Liz's and Joe's production possibilities for Salads and Smoothies.
-Liz has a comparative advantage in ________ because ________.

Accepted Answer

A) smoothies; her opportunity cost of producing smoothies is lower than Joe's 
B) salads; her opportunity cost of producing salads is lower than Joe's 
C) smoothies; she can produce more smoothies per hour than Joe can 
D) salads; she can produce more salads per hour than Joe can 
E) both goods; she can produce more of both goods per hour than Joe can 
A) smoothies; her opportunity cost of producing smoothies is lower than Joe's 
B) salads; her opportunity cost of producing salads is lower than Joe's 
C) smoothies; she can produce more smoothies per hour than Joe can 
D) salads; she can produce more salads per hour than Joe can 
E) both goods; she can produce more of both goods per hour than Joe can

Question 8

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

Accepted Answer

A) 1/4 of a pound of fish 
B) 1/2 of a pound of fish 
C) 1 pound of fish 
D) 200 pounds of fish 
E) 2 pounds of fish 
A) 1/4 of a pound of fish 
B) 1/2 of a pound of fish 
C) 1 pound of fish 
D) 200 pounds of fish 
E) 2 pounds of fish

Question 9

Alice and Gene work in the mailroom, sorting and delivering mail.In order for them to benefit from specialization and trade, Alice must

Accepted Answer

A) be able to both sort and deliver faster than Gene. 
B) be equally productive in both sorting and delivering. 
C) have a comparative advantage in both sorting and delivering. 
D) have a comparative advantage in one task and Gene must have a comparative advantage in the other task. 
E) be equally productive as Gene in both sorting and delivering. 
A) be able to both sort and deliver faster than Gene. 
B) be equally productive in both sorting and delivering. 
C) have a comparative advantage in both sorting and delivering. 
D) have a comparative advantage in one task and Gene must have a comparative advantage in the other task. 
E) be equally productive as Gene in both sorting and delivering.

Question 10

If the production possibilities frontier between two goods is a straight line, then the

Accepted Answer

A) opportunity cost is not a ratio. 
B) resources are equally productive in both goods. 
C) line does not qualify as a production possibilities frontier because the unattainable production points are too close to the inefficient production points. 
D) Both answers A and C are correct. 
E) Both answers A and B are correct. 
A) opportunity cost is not a ratio. 
B) resources are equally productive in both goods. 
C) line does not qualify as a production possibilities frontier because the unattainable production points are too close to the inefficient production points. 
D) Both answers A and C are correct. 
E) Both answers A and B are correct.

Question 11

Moving between two points on a PPF, a country gains 8 desktop computers and forgoes 4 laptop computers.The opportunity cost of 1 desktop computer is

Accepted Answer

A) 4 laptops. 
B) 8 desktops. 
C) 1 desktop. 
D) 2 laptops. 
E) 1/2 of a laptop. 
A) 4 laptops. 
B) 8 desktops. 
C) 1 desktop. 
D) 2 laptops. 
E) 1/2 of a laptop.

Question 12

The opportunity cost of a good increases as more of it is produced because

Accepted Answer

A) there is no such thing as a free lunch. 
B) resources are not equally productive in all activities. 
C) producing more of a good requires additional resources. 
D) the number of forgone alternatives also increases. 
E) people want the good less as more is produced. 
A) there is no such thing as a free lunch. 
B) resources are not equally productive in all activities. 
C) producing more of a good requires additional resources. 
D) the number of forgone alternatives also increases. 
E) people want the good less as more is produced.

Question 13

-Two nations can produce computers and software in the amounts given in the table above.Does either nation have an absolute advantage in producing the products? Which nation has a comparative advantage in computers? Which nation has a comparative advantage in software? Explain your answers.

Accepted Answer

Nation B has an absolute advantage in pr

Question 14

Economic growth depends upon which of the following?
I∙Increasing the quantity of labor
Ii∙Lowering the prices of goods and services
Iii∙Advancing technology

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 15

Specialization and trade

Accepted Answer

A) does not benefit anyone. 
B) allows nations to produce inside their individual production possibilities frontier. 
C) allows nations to consume combinations of products that are outside their individual production possibilities frontier. 
D) shifts the production possibilities frontier inward. 
E) shifts the production possibilities frontier outward. 
A) does not benefit anyone. 
B) allows nations to produce inside their individual production possibilities frontier. 
C) allows nations to consume combinations of products that are outside their individual production possibilities frontier. 
D) shifts the production possibilities frontier inward. 
E) shifts the production possibilities frontier outward.

Question 16

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 17

Scott and Cindy both produce only pizza and tacos.In one hour, Scott can produce 20 pizzas or 40 tacos.In one hour, Cindy can produce 30 pizzas or 40 tacos.Based on these data,

Accepted Answer

A) Cindy has a comparative advantage at producing tacos. 
B) Scott has a comparative advantage at producing tacos. 
C) Cindy and Scott have the same comparative advantage in producing tacos. 
D) neither Cindy nor Scott has a comparative advantage in producing tacos. 
E) Cindy and Scott have the same comparative advantage in producing pizzas. 
A) Cindy has a comparative advantage at producing tacos. 
B) Scott has a comparative advantage at producing tacos. 
C) Cindy and Scott have the same comparative advantage in producing tacos. 
D) neither Cindy nor Scott has a comparative advantage in producing tacos. 
E) Cindy and Scott have the same comparative advantage in producing pizzas.

Question 18

A bowed out PPF reflects which of the following ideas?
I∙increasing opportunity cost
Ii∙resources are not equally productive in all activities
Iii∙prices of goods increase over time

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 19

-Deb and Pete have volunteered to help their favorite charity mail out fundraiser information.The figure above shows their production possibilities frontiers for assembling packets and stuffing envelopes.If Deb and Pete specialize and trade, how many packets will be assembled?

Accepted Answer

A) 40 
B) more than 40 and less than 80 
C) 80 
D) 160 
E) more than 80 and less than 160 
A) 40 
B) more than 40 and less than 80 
C) 80 
D) 160 
E) more than 80 and less than 160

Question 20

In order for Ireland to grow more potatoes, wool production must decrease.This situation is an example of

Accepted Answer

A) producing at a point that lies beyond the PPF. 
B) zero opportunity cost. 
C) opportunity benefit. 
D) a free lunch. 
E) a tradeoff. 
A) producing at a point that lies beyond the PPF. 
B) zero opportunity cost. 
C) opportunity benefit. 
D) a free lunch. 
E) a tradeoff.

Moving between two points on a PPF, a country gains 6 automobiles and forgoes 3 trucks.The opportunity cost of 1 automobile is

If a country is operating at a point of production efficiency,

How can a combination of goods be unattainable?

While moving along a production possibilities frontier, the amount of labor , the amount of capital , and the level of technology .

-The table above gives four production possibilities for airplanes and cruise ships.In possibility A, how many resources are devoted to the production of airplanes?

The idea of increasing opportunity cost is reflected in the

The figure above show Liz's and Joe's production possibilities for Salads and Smoothies. -Liz has a comparative advantage in because .

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

Alice and Gene work in the mailroom, sorting and delivering mail.In order for them to benefit from specialization and trade, Alice must

If the production possibilities frontier between two goods is a straight line, then the

Moving between two points on a PPF, a country gains 8 desktop computers and forgoes 4 laptop computers.The opportunity cost of 1 desktop computer is

The opportunity cost of a good increases as more of it is produced because

-Two nations can produce computers and software in the amounts given in the table above.Does either nation have an absolute advantage in producing the products? Which nation has a comparative advantage in computers? Which nation has a comparative advantage in software? Explain your answers.

Economic growth depends upon which of the following? I∙Increasing the quantity of labor Ii∙Lowering the prices of goods and services Iii∙Advancing technology

Specialization and trade

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 .

Scott and Cindy both produce only pizza and tacos.In one hour, Scott can produce 20 pizzas or 40 tacos.In one hour, Cindy can produce 30 pizzas or 40 tacos.Based on these data,

A bowed out PPF reflects which of the following ideas? I∙increasing opportunity cost Ii∙resources are not equally productive in all activities Iii∙prices of goods increase over time

-Deb and Pete have volunteered to help their favorite charity mail out fundraiser information.The figure above shows their production possibilities frontiers for assembling packets and stuffing envelopes.If Deb and Pete specialize and trade, how many packets will be assembled?

In order for Ireland to grow more potatoes, wool production must decrease.This situation is an example of

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

Moving between two points on a PPF, a country gains 6 automobiles and forgoes 3 trucks.The opportunity cost of 1 automobile is

If a country is operating at a point of production efficiency,

How can a combination of goods be unattainable?

While moving along a production possibilities frontier, the amount of labor ________, the amount of capital ________, and the level of technology ________.

-The table above gives four production possibilities for airplanes and cruise ships.In possibility A, how many resources are devoted to the production of airplanes?

The idea of increasing opportunity cost is reflected in the

The figure above show Liz's and Joe's production possibilities for Salads and Smoothies. -Liz has a comparative advantage in ________ because ________.

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

Alice and Gene work in the mailroom, sorting and delivering mail.In order for them to benefit from specialization and trade, Alice must

If the production possibilities frontier between two goods is a straight line, then the

Moving between two points on a PPF, a country gains 8 desktop computers and forgoes 4 laptop computers.The opportunity cost of 1 desktop computer is

The opportunity cost of a good increases as more of it is produced because

-Two nations can produce computers and software in the amounts given in the table above.Does either nation have an absolute advantage in producing the products? Which nation has a comparative advantage in computers? Which nation has a comparative advantage in software? Explain your answers.

Economic growth depends upon which of the following? I∙Increasing the quantity of labor Ii∙Lowering the prices of goods and services Iii∙Advancing technology

Specialization and trade

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 ________.

Scott and Cindy both produce only pizza and tacos.In one hour, Scott can produce 20 pizzas or 40 tacos.In one hour, Cindy can produce 30 pizzas or 40 tacos.Based on these data,

A bowed out PPF reflects which of the following ideas? I∙increasing opportunity cost Ii∙resources are not equally productive in all activities Iii∙prices of goods increase over time

-Deb and Pete have volunteered to help their favorite charity mail out fundraiser information.The figure above shows their production possibilities frontiers for assembling packets and stuffing envelopes.If Deb and Pete specialize and trade, how many packets will be assembled?

In order for Ireland to grow more potatoes, wool production must decrease.This situation is an example of

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

While moving along a production possibilities frontier, the amount of labor , the amount of capital , and the level of technology .

The figure above show Liz's and Joe's production possibilities for Salads and Smoothies. -Liz has a comparative advantage in because .

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 .