Question 1

-The above figure shows the production possibility frontier for an economy.The point or points that are not attainable are

Accepted Answer

A) points B and C. 
B) points A, B, and C. 
C) point E. 
D) points A, B, C, and D. 
E) points A and D. 
A) points B and C. 
B) points A, B, and C. 
C) point E. 
D) points A, B, C, and D. 
E) points A and D.

Question 2

If there is unemployment in an economy, then the

Accepted Answer

A) production possibilities frontier will shift inwards. 
B) economy is operating at an unattainable point. 
C) production possibilities frontier will shift outwards. 
D) economy is producing at a point inside the production possibilities frontier. 
E) production possibilities frontier must be bowed inward. 
A) production possibilities frontier will shift inwards. 
B) economy is operating at an unattainable point. 
C) production possibilities frontier will shift outwards. 
D) economy is producing at a point inside the production possibilities frontier. 
E) production possibilities frontier must be bowed inward.

Question 3

The opportunity cost of producing one more unit of a good is calculated by dividing the

Accepted Answer

A) increase in the quantity of that good by the decrease in the quantity of other good. 
B) total quantity of that good by the total quantity of other good. 
C) decrease in the quantity of the other good by the increase in the quantity of the good whose opportunity cost we're calculating. 
D) total quantity of the other good by the total quantity of the good whose opportunity cost we're calculating. 
E) price of the good whose opportunity cost we are calculating by the number of units of the other good that are forgone. 
A) increase in the quantity of that good by the decrease in the quantity of other good. 
B) total quantity of that good by the total quantity of other good. 
C) decrease in the quantity of the other good by the increase in the quantity of the good whose opportunity cost we're calculating. 
D) total quantity of the other good by the total quantity of the good whose opportunity cost we're calculating. 
E) price of the good whose opportunity cost we are calculating by the number of units of the other good that are forgone.

Question 4

Consider a production possibility frontier with jeans on the vertical axis and shoes on the horizontal axis.As a country moves along the frontier closer to the vertical axis,

Accepted Answer

A) the opportunity cost of producing jeans increases. 
B) the opportunity cost of producing shoes increases. 
C) there are fewer tradeoffs. 
D) inefficient production occurs. 
E) the opportunity cost of producing jeans decreases. 
A) the opportunity cost of producing jeans increases. 
B) the opportunity cost of producing shoes increases. 
C) there are fewer tradeoffs. 
D) inefficient production occurs. 
E) the opportunity cost of producing jeans decreases.

Question 5

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.Cindy's opportunity cost of producing 1 taco is

Accepted Answer

A) 3/4 of a pizza. 
B) 1 pizza. 
C) 30 pizzas. 
D) 40 pizzas. 
E) 1 1/3 tacos. 
A) 3/4 of a pizza. 
B) 1 pizza. 
C) 30 pizzas. 
D) 40 pizzas. 
E) 1 1/3 tacos.

Question 6

-Omar and John can fix computers or write computer programs.The table above shows the number of computers they can fix and the lines of code they can write in a day.
a∙Who, if anyone, has the absolute advantage?
b∙Who has the comparative advantage in fixing computers? Why?
c∙Who has the comparative advantage in writing programs? Why?

Accepted Answer

a∙Omar has an absolute advantage in fixi

Question 7

-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, which country is most likely to expand its PPF to PPF₁?

Accepted Answer

A) France and Germany equally. 
B) India 
C) Estonia 
D) France 
E) Germany 
A) France and Germany equally. 
B) India 
C) Estonia 
D) France 
E) Germany

Question 8

-The figure above shows the production possibilities frontier for a country.In order for it to move from producing at point A to producing at point B, the country would need to

Accepted Answer

A) decrease SUV production by 1 million. 
B) decrease SUV production by 3 million. 
C) decrease SUV production by 4 million. 
D) decrease compact car production by 3 million. 
E) acquire more resources and/or more advanced technology. 
A) decrease SUV production by 1 million. 
B) decrease SUV production by 3 million. 
C) decrease SUV production by 4 million. 
D) decrease compact car production by 3 million. 
E) acquire more resources and/or more advanced technology.

Question 9

-The table above presents the production possibilities of Farmer Brown.Use these data to calculate Farmer Brown's opportunity cost of additional beef as Farmer Brown moves from point A to B to C to D.Also use the data to calculate Farmer Brown's opportunity cost of additional wheat as Farmer Brown moves from point D to C to B to A.Based on these costs, does Farmer Brown use resources that are more productive in one activity than the other or are they equally productive in both uses? Explain your answer.

Accepted Answer

The opportunity cost of a pound of beef

Question 10

Production efficiency is represented by ________ a production possibilities frontier.

Accepted Answer

A) all points on 
B) all points inside 
C) all points outside 
D) a movement along 
E) only one point on 
A) all points on 
B) all points inside 
C) all points outside 
D) a movement along 
E) only one point on

Question 11

-The figure above shows how the PPF for cell phones and new cell-phone factories can expand.In the figure, if the economy chose the point on this year's PPF that is below point K, the next year's PPF would

Accepted Answer

A) shift outward along the horizontal axis farther than the new PPF shown in the figure. 
B) shift outward along the horizontal axis, but not as far as the new PPF shown in the figure. 
C) shift outward along the vertical axis, not along the horizontal axis. 
D) shift inward along the horizontal axis. 
E) shift inward along the vertical axis. 
A) shift outward along the horizontal axis farther than the new PPF shown in the figure. 
B) shift outward along the horizontal axis, but not as far as the new PPF shown in the figure. 
C) shift outward along the vertical axis, not along the horizontal axis. 
D) shift inward along the horizontal axis. 
E) shift inward along the vertical axis.

Question 12

To find the opportunity cost of producing one more unit of any product while on the production possibilities frontier requires

Accepted Answer

A) setting the amounts of the two products equal to each other. 
B) setting the change in one product equal to the change in the other product. 
C) dividing the amount of the product forgone by the amount of the product gained. 
D) subtracting the change in the product whose production increased from the change in the product whose production decreased. 
E) None of these describe how to find opportunity cost. 
A) setting the amounts of the two products equal to each other. 
B) setting the change in one product equal to the change in the other product. 
C) dividing the amount of the product forgone by the amount of the product gained. 
D) subtracting the change in the product whose production increased from the change in the product whose production decreased. 
E) None of these describe how to find opportunity cost.

Question 13

Hank requires 1 hour to cut the grass and 3 hours to clean the house.His sister Holly requires 1 hour to cut the grass and 4 hours to clean the house.Which of the following statements is true?

Accepted Answer

A) Hank has a comparative advantage in both cutting the grass and cleaning the house. 
B) Hank and Holly both have a comparative advantage in cutting the grass. 
C) Hank has a lower opportunity cost of cutting the grass. 
D) Hank has an absolute advantage in both cutting the grass and cleaning the house. 
E) Holly has a comparative advantage in cutting the grass. 
A) Hank has a comparative advantage in both cutting the grass and cleaning the house. 
B) Hank and Holly both have a comparative advantage in cutting the grass. 
C) Hank has a lower opportunity cost of cutting the grass. 
D) Hank has an absolute advantage in both cutting the grass and cleaning the house. 
E) Holly has a comparative advantage in cutting the grass.

Question 14

What does the vertical intercept of a production possibilities frontier represent?

Accepted Answer

The vertical intercept is the

Question 15

-The figure above shows how the PPF for cell phones and new cell-phone factories can expand.In the figure, if the economy chose the point on this year's PPF that is above point K, the next year's PPF would

Accepted Answer

A) shift outward along the horizontal axis farther than the new PPF shown in the figure. 
B) shift outward along the horizontal axis, but not as far as the new PPF shown in the figure. 
C) shift outward along the vertical axis, not along the horizontal axis. 
D) shift inward along the horizontal axis. 
E) shift inward along the vertical axis. 
A) shift outward along the horizontal axis farther than the new PPF shown in the figure. 
B) shift outward along the horizontal axis, but not as far as the new PPF shown in the figure. 
C) shift outward along the vertical axis, not along the horizontal axis. 
D) shift inward along the horizontal axis. 
E) shift inward along the vertical axis.

Question 16

-The figure above shows the production possibilities frontier for a country.If the country is producing at point D, then the

Accepted Answer

A) resources are being used efficiently. 
B) technology associated with producing SUVs and compact cars is advancing. 
C) resources are not being used efficiently and/or are unemployed. 
D) production of SUVs and compact cars is maximized. 
E) None of the above answers are correct because it is not possible to produce at point D. 
A) resources are being used efficiently. 
B) technology associated with producing SUVs and compact cars is advancing. 
C) resources are not being used efficiently and/or are unemployed. 
D) production of SUVs and compact cars is maximized. 
E) None of the above answers are correct because it is not possible to produce at point D.

Question 17

Which of the following statements is correct?

Accepted Answer

A) If capital is idle, the economy is producing at its full potential. 
B) The production possibilities frontier shows that there are no limits to production. 
C) A tradeoff is a limit that forces an exchange or a substitution of one thing for something else. 
D) Any point on or within the PPF is production efficient. 
E) None of the above answers are correct. 
A) If capital is idle, the economy is producing at its full potential. 
B) The production possibilities frontier shows that there are no limits to production. 
C) A tradeoff is a limit that forces an exchange or a substitution of one thing for something else. 
D) Any point on or within the PPF is production efficient. 
E) None of the above answers are correct.

Question 18

A movement from one point on a production possibilities frontier to another represents

Accepted Answer

A) a tradeoff. 
B) a free lunch. 
C) full employment of labor but not capital. 
D) unemployment. 
E) an advance in technology. 
A) a tradeoff. 
B) a free lunch. 
C) full employment of labor but not capital. 
D) unemployment. 
E) an advance in technology.

Question 19

A production point beyond the production possibilities frontier represents what?

Accepted Answer

A production point beyond the

Question 20

What economic concepts are represented in the production possibilities model?

Accepted Answer

There are a large number of economic con

-The above figure shows the production possibility frontier for an economy.The point or points that are not attainable are

If there is unemployment in an economy, then the

The opportunity cost of producing one more unit of a good is calculated by dividing the

Consider a production possibility frontier with jeans on the vertical axis and shoes on the horizontal axis.As a country moves along the frontier closer to the vertical axis,

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.Cindy's opportunity cost of producing 1 taco is

-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, which country is most likely to expand its PPF to PPF₁?

-The figure above shows the production possibilities frontier for a country.In order for it to move from producing at point A to producing at point B, the country would need to

Production efficiency is represented by ________ a production possibilities frontier.

-The figure above shows how the PPF for cell phones and new cell-phone factories can expand.In the figure, if the economy chose the point on this year's PPF that is below point K, the next year's PPF would

To find the opportunity cost of producing one more unit of any product while on the production possibilities frontier requires

Hank requires 1 hour to cut the grass and 3 hours to clean the house.His sister Holly requires 1 hour to cut the grass and 4 hours to clean the house.Which of the following statements is true?

What does the vertical intercept of a production possibilities frontier represent?

-The figure above shows how the PPF for cell phones and new cell-phone factories can expand.In the figure, if the economy chose the point on this year's PPF that is above point K, the next year's PPF would

-The figure above shows the production possibilities frontier for a country.If the country is producing at point D, then the

Which of the following statements is correct?

A movement from one point on a production possibilities frontier to another represents

A production point beyond the production possibilities frontier represents what?

What economic concepts are represented in the production possibilities model?

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

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Exam 3: The Economic Problem

-The above figure shows the production possibility frontier for an economy.The point or points that are not attainable are

If there is unemployment in an economy, then the

The opportunity cost of producing one more unit of a good is calculated by dividing the

Consider a production possibility frontier with jeans on the vertical axis and shoes on the horizontal axis.As a country moves along the frontier closer to the vertical axis,

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.Cindy's opportunity cost of producing 1 taco is

-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, which country is most likely to expand its PPF to PPF₁?

-The figure above shows the production possibilities frontier for a country.In order for it to move from producing at point A to producing at point B, the country would need to

Production efficiency is represented by ________ a production possibilities frontier.

-The figure above shows how the PPF for cell phones and new cell-phone factories can expand.In the figure, if the economy chose the point on this year's PPF that is below point K, the next year's PPF would

To find the opportunity cost of producing one more unit of any product while on the production possibilities frontier requires

Hank requires 1 hour to cut the grass and 3 hours to clean the house.His sister Holly requires 1 hour to cut the grass and 4 hours to clean the house.Which of the following statements is true?

What does the vertical intercept of a production possibilities frontier represent?

-The figure above shows how the PPF for cell phones and new cell-phone factories can expand.In the figure, if the economy chose the point on this year's PPF that is above point K, the next year's PPF would

-The figure above shows the production possibilities frontier for a country.If the country is producing at point D, then the

Which of the following statements is correct?

A movement from one point on a production possibilities frontier to another represents

A production point beyond the production possibilities frontier represents what?

What economic concepts are represented in the production possibilities model?

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