Question 1

-In the above figure, Jill's opportunity cost of producing 1 gallon of bottled water is ________ of soda.

Accepted Answer

A)  2 gallons 
B)  1/2 of a gallon 
C)  4 gallons 
D)  1 gallon 
E)  1/4 of a gallon 
A)  2 gallons 
B)  1/2 of a gallon 
C)  4 gallons 
D)  1 gallon 
E)  1/4 of a gallon

Question 2

-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 3

-The figure above shows a production possibilities frontier.In the figure, when the economy moves from point C to point B, what is the opportunity cost of a DVD?

Accepted Answer

A)  0.5 cell phones. 
B)  2 cell phones. 
C)  0.5 million cell phones. 
D)  2 million cell phones. 
E)  zero. 
A)  0.5 cell phones. 
B)  2 cell phones. 
C)  0.5 million cell phones. 
D)  2 million cell phones. 
E)  zero.

Question 4

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.

Question 5

-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 6

-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 7

Why does the production possibilities frontier have a bowed out shape rather than being a straight line?

Accepted Answer

The fact that as the production of one g

Question 8

Mac can bake more cookies than Monica per hour.It must be true that

Accepted Answer

A)  Monica has an absolute advantage in cookie baking. 
B)  Mac has an absolute advantage in baking cookies. 
C)  Mac has a comparative advantage in baking cookies. 
D)  Monica has a comparative advantage in baking cookies. 
E)  Mac cannot benefit by trade between the two of them. 
A)  Monica has an absolute advantage in cookie baking. 
B)  Mac has an absolute advantage in baking cookies. 
C)  Mac has a comparative advantage in baking cookies. 
D)  Monica has a comparative advantage in baking cookies. 
E)  Mac cannot benefit by trade between the two of them.

Question 9

Explain why specialization and trade increases a country's overall level of consumption.

Accepted Answer

A country specializes in the activities

Question 10

The above figure shows the PPF for a country that produces computers and computer factories. The nation's production possibilities frontier is PPF₀ .At which of the following production points would the economy grow most rapidly?

Accepted Answer

A)  Point A. 
B)  Point B. 
C)  Point C. 
D)  It makes no difference among the three points because they are all production efficient. 
E)  More information is needed to answer the question. 
A)  Point A. 
B)  Point B. 
C)  Point C. 
D)  It makes no difference among the three points because they are all production efficient. 
E)  More information is needed to answer the question.

Question 11

The United States is one of the richest nations in the world,

Accepted Answer

A)  so does not need to trade with poor nations in order to achieve any gains from trade. 
B)  so might not have a comparative advantage in producing any goods. 
C)  but it can still benefit from specialization and trade. 
D)  so it must have a comparative advantage in the production of all goods. 
E)  so it must have an absolute advantage in the production of all goods. 
A)  so does not need to trade with poor nations in order to achieve any gains from trade. 
B)  so might not have a comparative advantage in producing any goods. 
C)  but it can still benefit from specialization and trade. 
D)  so it must have a comparative advantage in the production of all goods. 
E)  so it must have an absolute advantage in the production of all goods.

Question 12

When a tradeoff does NOT exist between two goods, the situation is known as

Accepted Answer

A)  opportunity cost. 
B)  scarcity. 
C)  a free lunch. 
D)  zero cost production. 
E)  efficient production. 
A)  opportunity cost. 
B)  scarcity. 
C)  a free lunch. 
D)  zero cost production. 
E)  efficient production.

Question 13

How is economic growth shown in a production possibilities frontier graph?

Accepted Answer

Economic growth is i

Question 14

In the production possibilities model, the vertical axis measures ________ and the horizontal axis measures ________.

Accepted Answer

A)  the quantity of a good or service; the quantity of another good or service 
B)  the price of a good or service; the quantity of the good or service 
C)  the price of a good or service; the price of another good or service 
D)  the quantity of a good or service; time 
E)  people's wants; the quantity of a good or service 
A)  the quantity of a good or service; the quantity of another good or service 
B)  the price of a good or service; the quantity of the good or service 
C)  the price of a good or service; the price of another good or service 
D)  the quantity of a good or service; time 
E)  people's wants; the quantity of a good or service

Question 15

What is comparative advantage?
 Give an example.

Accepted Answer

Comparative advantage is the ability of

Question 16

The production possibilities frontier is the

Accepted Answer

A)  maximum output that can be produced at an opportunity cost of zero. 
B)  minimum output that can be produced when resources are used inefficiently. 
C)  boundary between the combinations of goods and services that can be produced and the combinations that cannot be produced, given the available factors of production and the state of technology. 
D)  boundary between the combinations of goods and services that can be produced and the combinations that cannot be produced when technology is changing. 
E)  maximum opportunity cost combinations of goods and services. 
A)  maximum output that can be produced at an opportunity cost of zero. 
B)  minimum output that can be produced when resources are used inefficiently. 
C)  boundary between the combinations of goods and services that can be produced and the combinations that cannot be produced, given the available factors of production and the state of technology. 
D)  boundary between the combinations of goods and services that can be produced and the combinations that cannot be produced when technology is changing. 
E)  maximum opportunity cost combinations of goods and services.

Question 17

-The above figure shows the production possibility frontier for a country. Suppose the country is producing at point D. What would be the opportunity cost to move to point C?

Accepted Answer

A)  6 thousand bottles of wine 
B)  15 thousand bottles of wine 
C)  Nothing, it is a free lunch 
D)  This movement is not possible without economic growth. 
E)  12 tons of rice 
A)  6 thousand bottles of wine 
B)  15 thousand bottles of wine 
C)  Nothing, it is a free lunch 
D)  This movement is not possible without economic growth. 
E)  12 tons of rice

Question 18

$\begin{array}{ccc}
\text { Possibility } & \text { Robots } & \text { Pizza } \
\hline A & 0 & 40 \
B & 1 & 39 \
C & 2 & 37 \
D & 3 & 34 \
E & 4 & 30 \
F & 5 & 20 \
G & 6 & 0
\end{array}$
-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 19

When economists state that the opportunity cost of a product increases as more of it is produced, what do they mean?
 For instance, what is the opportunity cost?
 And, where in a PPF diagram does this statement apply and where does it not apply?

Accepted Answer

In general, the opportunity cost of incr

Question 20

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.

-In the above figure, Jill's opportunity cost of producing 1 gallon of bottled water is ________ of soda.

-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?

-The figure above shows a production possibilities frontier.In the figure, when the economy moves from point C to point B, what is the opportunity cost of a DVD?

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

-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

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

Why does the production possibilities frontier have a bowed out shape rather than being a straight line?

Mac can bake more cookies than Monica per hour.It must be true that

Explain why specialization and trade increases a country's overall level of consumption.

The above figure shows the PPF for a country that produces computers and computer factories. The nation's production possibilities frontier is PPF₀ .At which of the following production points would the economy grow most rapidly?

The United States is one of the richest nations in the world,

When a tradeoff does NOT exist between two goods, the situation is known as

How is economic growth shown in a production possibilities frontier graph?

In the production possibilities model, the vertical axis measures and the horizontal axis measures .

What is comparative advantage? Give an example.

The production possibilities frontier is the

-The above figure shows the production possibility frontier for a country. Suppose the country is producing at point D. What would be the opportunity cost to move to point C?

Possibility Robots Pizza A 0 40 B 1 39 C 2 37 D 3 34 E 4 30 F 5 20 G 6 0 -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.

When economists state that the opportunity cost of a product increases as more of it is produced, what do they mean? For instance, what is the opportunity cost? And, where in a PPF diagram does this statement apply and where does it not apply?

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

Getting Started

The Usand Global Economies

Demand and Supply

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and the Natural Unemployment Rate

Economic Growth

Finance, Saving, and Investment

The Monetary System

Money, Interest, and Inflation

Aggregate Supply and Aggregate Demand

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters

Exam 3: The Economic Problem

-In the above figure, Jill's opportunity cost of producing 1 gallon of bottled water is ________ of soda.

-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?

-The figure above shows a production possibilities frontier.In the figure, when the economy moves from point C to point B, what is the opportunity cost of a DVD?

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

-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

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

Why does the production possibilities frontier have a bowed out shape rather than being a straight line?

Mac can bake more cookies than Monica per hour.It must be true that

Explain why specialization and trade increases a country's overall level of consumption.

The above figure shows the PPF for a country that produces computers and computer factories. The nation's production possibilities frontier is PPF₀ .At which of the following production points would the economy grow most rapidly?

The United States is one of the richest nations in the world,

When a tradeoff does NOT exist between two goods, the situation is known as

How is economic growth shown in a production possibilities frontier graph?

In the production possibilities model, the vertical axis measures ________ and the horizontal axis measures ________.

What is comparative advantage? Give an example.

The production possibilities frontier is the

-The above figure shows the production possibility frontier for a country. Suppose the country is producing at point D. What would be the opportunity cost to move to point C?

Possibility Robots Pizza A 0 40 B 1 39 C 2 37 D 3 34 E 4 30 F 5 20 G 6 0 -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.

When economists state that the opportunity cost of a product increases as more of it is produced, what do they mean? For instance, what is the opportunity cost? And, where in a PPF diagram does this statement apply and where does it not apply?

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

Getting Started

The Usand Global Economies

Demand and Supply

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and the Natural Unemployment Rate

Economic Growth

Finance, Saving, and Investment

The Monetary System

Money, Interest, and Inflation

Aggregate Supply and Aggregate Demand

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters

In the production possibilities model, the vertical axis measures and the horizontal axis measures .