Question 1

The production possibilities frontier is a graph showing the

Accepted Answer

A) exact point of greatest efficiency for producing goods and services. 
B) tradeoff between free lunches. 
C) maximum combinations of goods and services that can be produced. 
D) minimum combinations of goods and services that can be produced. 
E) resources available for the economy's production use. 
A) exact point of greatest efficiency for producing goods and services. 
B) tradeoff between free lunches. 
C) maximum combinations of goods and services that can be produced. 
D) minimum combinations of goods and services that can be produced. 
E) resources available for the economy's production use.

Question 2

-Robinson Crusoe divides his time between catching fish and gathering fruit.Part of his production possibilities frontier is given in the above table.Mr.Crusoe, while lonesome, is efficient and always stays on his PPF.Mr.Crusoe is consuming 20 pounds of fish.Then he decides to slowly become a vegetarian and decrease his consumption of fish to 9 pounds.This decision means that Mr.Crusoe will

Accepted Answer

A) incur an opportunity cost of 9 pounds of fruit. 
B) incur an opportunity cost of 20 pounds of fish. 
C) be able to enjoy a gain of 9 pounds of fruit. 
D) incur an opportunity cost of 99 pounds of fruit. 
E) incur an opportunity cost of 9 pounds of fish. 
A) incur an opportunity cost of 9 pounds of fruit. 
B) incur an opportunity cost of 20 pounds of fish. 
C) be able to enjoy a gain of 9 pounds of fruit. 
D) incur an opportunity cost of 99 pounds of fruit. 
E) incur an opportunity cost of 9 pounds of fish.

Question 3

-The table above gives the production possibilities frontier for two countries, Anaconda and Bear.The opportunity cost of moving from ________ is greater for ________.

Accepted Answer

A) point A to point B; Anaconda 
B) point B to point A; Bear 
C) point D to point E; Bear 
D) point E to point D; Bear 
E) any point to any other point; Bear 
A) point A to point B; Anaconda 
B) point B to point A; Bear 
C) point D to point E; Bear 
D) point E to point D; Bear 
E) any point to any other point; Bear

Question 4

-The figure above shows the production possibilities frontier for a country.In order for it to produce at point E, the

Accepted Answer

A) country would need to acquire more resources and/or more advanced technology. 
B) production of compact cars would need to decrease. 
C) production of SUVs would need to decrease. 
D) country would need to use its resources more efficiently. 
E) country would need to determine that compact cars and SUVs are equally important to it. 
A) country would need to acquire more resources and/or more advanced technology. 
B) production of compact cars would need to decrease. 
C) production of SUVs would need to decrease. 
D) country would need to use its resources more efficiently. 
E) country would need to determine that compact cars and SUVs are equally important to it.

Question 5

-The figure above shows the production possibilities frontier for a country.If the economy is operating at point B, then the opportunity cost of another million gallons of milk is

Accepted Answer

A) 4 gallons of ice cream for a gallon of milk. 
B) 3 gallons of ice cream for a gallon of milk. 
C) 1 gallon of ice cream for a gallon of milk. 
D) 1/3 of a gallon of ice cream for a gallon of milk. 
E) zero because after producing another million gallons of milk then zero gallons of ice cream are produced. 
A) 4 gallons of ice cream for a gallon of milk. 
B) 3 gallons of ice cream for a gallon of milk. 
C) 1 gallon of ice cream for a gallon of milk. 
D) 1/3 of a gallon of ice cream for a gallon of milk. 
E) zero because after producing another million gallons of milk then zero gallons of ice cream are produced.

Question 6

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 7

-The table above shows a nation's production possibilities frontier.If the nation chooses to increase the production of robots from 2 to 3 and it is on its PPF, it will have to forgo ________ pizzas.

Accepted Answer

A) 37 
B) 34 
C) 3 
D) 35.5 
E) None of the above answers is correct. 
A) 37 
B) 34 
C) 3 
D) 35.5 
E) None of the above answers is correct.

Question 8

-The above figure shows the production possibility frontier for an economy.The point or points that are 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 9

-Using the figure above, if Jack and Jill specialize and gain from trade, then

Accepted Answer

A) Jack produces equal amounts of gallons of water and bottled water. 
B) Jack specializes in the production of bottled water. 
C) Jack and Jill produce beyond their PPF. 
D) Jack specializes in the production of soda. 
E) Jack specializes on the production of soda and water. 
A) Jack produces equal amounts of gallons of water and bottled water. 
B) Jack specializes in the production of bottled water. 
C) Jack and Jill produce beyond their PPF. 
D) Jack specializes in the production of soda. 
E) Jack specializes on the production of soda and water.

Question 10

-The above figure shows the production possibility frontier for a country.Suppose the country is producing at point A.What is the opportunity cost of increasing the production of rice to 12 tons?

Accepted Answer

A) 15 thousand bottles of wine 
B) 6 thousand bottles of wine 
C) 9 thousand bottles of wine 
D) 12 tons of rice 
E) Nothing, it is a free lunch. 
A) 15 thousand bottles of wine 
B) 6 thousand bottles of wine 
C) 9 thousand bottles of wine 
D) 12 tons of rice 
E) Nothing, it is a free lunch.

Question 11

-In the table above, Jill's opportunity cost for 1 pound of food is ________ and her 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 12

-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 PPF₃?

Accepted Answer

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

Question 13

-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 spends all her time assembling packets, how many can she assemble?

Accepted Answer

A) 32 
B) 40 
C) 64 
D) 160 
E) 22 
A) 32 
B) 40 
C) 64 
D) 160 
E) 22

Question 14

-Suppose India and France have the same PPF, shown in the figure above.Based on their current production points, which is France's most likely future PPF?

Accepted Answer

A) PPF₂ 
B) PPF₁ 
C) PPF₀ 
D) Either PPF₀ or PPF₁ 
E) None of the above because economic growth will not happen in India. 
A) PPF₂ 
B) PPF₁ 
C) PPF₀ 
D) Either PPF₀ or PPF₁ 
E) None of the above because economic growth will not happen in India.

Question 15

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 16

The fact of increasing opportunity cost when moving on the PPF means that

Accepted Answer

A) to increase the production of one product requires larger and larger sacrifices of the other good. 
B) to decrease the production of one product requires smaller and smaller sacrifices of the other good. 
C) to increase the production of one product requires smaller and smaller sacrifices of the other good. 
D) when the government forces a movement from one point on the PPF to another point, no production is lost. 
E) the PPF will be a negatively sloped straight line. 
A) to increase the production of one product requires larger and larger sacrifices of the other good. 
B) to decrease the production of one product requires smaller and smaller sacrifices of the other good. 
C) to increase the production of one product requires smaller and smaller sacrifices of the other good. 
D) when the government forces a movement from one point on the PPF to another point, no production is lost. 
E) the PPF will be a negatively sloped straight line.

Question 17

Consider a production possibility frontier with books and tables.A combination of 1000 books and 500 tables is on the frontier.Which of the following are true?
i. Production of 700 books and 400 tables is attainable but inefficient.
ii. Production of 1000 books and 600 tables is unattainable.
iii. Production of 500 books and 1000 tables is inside the frontier.

Accepted Answer

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

Question 18

-The figure above shows Prakash's and Gail's production possibilities frontiers for writing books and magazine articles.
a∙What is Prakash's opportunity cost of a book? What is Gail's opportunity cost? Who has the comparative advantage in writing books?
b∙Who has the comparative advantage in writing magazine articles?
c∙According to their comparative advantages, who should write books and who should write magazine articles?

Accepted Answer

a∙In a year, Prakash can write 2 books o

Question 19

-The table above presents the production possibilities frontier for a nation.Using the information in the table, when moving from possibility C to D, the cost of 1 unit of a capital good in terms of the consumption goods forgone is ________ consumption goods per capital good.

Accepted Answer

A) 25 
B) 15 
C) 20 
D) 10 
E) an undefined amount of 
A) 25 
B) 15 
C) 20 
D) 10 
E) an undefined amount of

Question 20

If a society moves from a period of time with significant unemployment to a time with full employment, its production possibilities frontier will

Accepted Answer

A) shift leftward. 
B) shift rightward. 
C) not shift because the society moves from one point on the frontier to a point inside the frontier. 
D) not shift because the society moves from a point inside the frontier to a point on the frontier. 
E) not shift because the society moves from one point on the frontier to a point outside the frontier. 
A) shift leftward. 
B) shift rightward. 
C) not shift because the society moves from one point on the frontier to a point inside the frontier. 
D) not shift because the society moves from a point inside the frontier to a point on the frontier. 
E) not shift because the society moves from one point on the frontier to a point outside the frontier.

The production possibilities frontier is a graph showing the

-The table above gives the production possibilities frontier for two countries, Anaconda and Bear.The opportunity cost of moving from is greater for .

-The figure above shows the production possibilities frontier for a country.In order for it to produce at point E, the

-The figure above shows the production possibilities frontier for a country.If the economy is operating at point B, then the opportunity cost of another million gallons of milk is

As we move along the production possibilities frontier,

-The table above shows a nation's production possibilities frontier.If the nation chooses to increase the production of robots from 2 to 3 and it is on its PPF, it will have to forgo ________ pizzas.

-The above figure shows the production possibility frontier for an economy.The point or points that are attainable are

-Using the figure above, if Jack and Jill specialize and gain from trade, then

-The above figure shows the production possibility frontier for a country.Suppose the country is producing at point A.What is the opportunity cost of increasing the production of rice to 12 tons?

-In the table above, Jill's opportunity cost for 1 pound of food is and her opportunity cost for 1 pound of clothing 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 PPF₃?

-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 spends all her time assembling packets, how many can she assemble?

-Suppose India and France have the same PPF, shown in the figure above.Based on their current production points, which is France's most likely future PPF?

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?

The fact of increasing opportunity cost when moving on the PPF means that

-The table above presents the production possibilities frontier for a nation.Using the information in the table, when moving from possibility C to D, the cost of 1 unit of a capital good in terms of the consumption goods forgone is ________ consumption goods per capital good.

If a society moves from a period of time with significant unemployment to a time with full employment, its production possibilities frontier will

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

The production possibilities frontier is a graph showing the

-The table above gives the production possibilities frontier for two countries, Anaconda and Bear.The opportunity cost of moving from ________ is greater for ________.

-The figure above shows the production possibilities frontier for a country.In order for it to produce at point E, the

-The figure above shows the production possibilities frontier for a country.If the economy is operating at point B, then the opportunity cost of another million gallons of milk is

As we move along the production possibilities frontier,

-The table above shows a nation's production possibilities frontier.If the nation chooses to increase the production of robots from 2 to 3 and it is on its PPF, it will have to forgo ________ pizzas.

-The above figure shows the production possibility frontier for an economy.The point or points that are attainable are

-Using the figure above, if Jack and Jill specialize and gain from trade, then

-The above figure shows the production possibility frontier for a country.Suppose the country is producing at point A.What is the opportunity cost of increasing the production of rice to 12 tons?

-In the table above, Jill's opportunity cost for 1 pound of food is ________ and her opportunity cost for 1 pound of clothing 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 PPF₃?

-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 spends all her time assembling packets, how many can she assemble?

-Suppose India and France have the same PPF, shown in the figure above.Based on their current production points, which is France's most likely future PPF?

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?

The fact of increasing opportunity cost when moving on the PPF means that

-The table above presents the production possibilities frontier for a nation.Using the information in the table, when moving from possibility C to D, the cost of 1 unit of a capital good in terms of the consumption goods forgone is ________ consumption goods per capital good.

If a society moves from a period of time with significant unemployment to a time with full employment, its production possibilities frontier will

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

-The table above gives the production possibilities frontier for two countries, Anaconda and Bear.The opportunity cost of moving from is greater for .

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