Exam 3: The Economic Problem

David takes 10 minutes to process a customer, and 20 minutes to stock the shelves.Danny takes 15 minutes to process a customer, and 15 minutes to stock the shelves.Which of the following statements is true?

The sustained expansion of production possibilities is called

-The figure above shows a nation's production possibilities frontier for apples and oranges. a∙What combination of goods is represented by point A? b∙What combination of goods is represented by point B? c∙Which point represents an unattainable combination of goods? d∙The movement from point C to point D results in a free lunch.What is the free lunch?

What does it mean when a "free lunch" is available? Relate your answer to the production possibilities frontier.

-The figure above shows a production possibilities frontier.In the figure, the economy faces a tradeoff when ________ cell phones and ________ DVDs.are produced.

To calculate the opportunity cost per unit, you divide the decrease in the quantity of the forgone item by the

If the production possibilities frontier between two goods were a straight line, then the opportunity cost of one good in terms of another would be

-The table above gives the production possibilities frontier for two countries, Anaconda and Bear.This table shows that

As an economy increasingly specializes in producing one good, the opportunity cost of that good increases.The opportunity cost increases because

-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.Which of the following statements is correct?

-The table above shows the production possibilities for an economy.Drawing a PPF with books on the vertical axis and bread on the horizontal axis, a movement from possibility B to possibility C to possibility D shows the opportunity cost of ________ moving down along the PPF.

The opportunity cost of economic growth is ________ and the benefit of economic growth is ________.

A country produces only cans of soup and ink pens.If the country produces on its bowed outward PPF and increases the production of cans of soup, the opportunity cost of additional

-The above figure shows the production possibility frontier for a country.Suppose the country is producing at point D.What is the opportunity cost of increasing the production of rice to 15 tons?

What is the relationship between the bowed out shape of the production possibilities frontier and the increasing opportunity cost of a good as more of it is produced?

-The table above gives the production possibilities frontier for a nation that produces wheat and soybeans.Use the information in that table to complete the table below, which has in it the opportunity costs of moving from one production point to another.Do not forget to note the units of the opportunity costs.

If there is increasing opportunity cost, then when moving downward on a production possibilities frontier, the opportunity cost of the good on the horizontal axis ________ as more of the good is produced.

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

If a nation has an absolute advantage in producing a good, then it

-The figure above shows a nation's production possibilities frontier.In the figure, point A shows