Question 1

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 2

In the movie Cast Away, Tom Hanks plays a FedEx efficiency expert stranded on a deserted island. While on the island, he divides his time between catching fish, gathering coconuts, painting, and building a raft. Suppose that these were Mr. Hanks' only activities. Did he face an opportunity cost from pursuing any of these activities?
 Why or why not?

Accepted Answer

Yes, Mr. Hanks faces an opportunity cost

Question 3

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

Accepted Answer

A) 1/4 of a pound of fish 
B) 4 pounds of fish 
C) 1 pound of fish 
D) 100 pounds of fish 
E) 2 pounds of fish 
A) 1/4 of a pound of fish 
B) 4 pounds of fish 
C) 1 pound of fish 
D) 100 pounds of fish 
E) 2 pounds of fish

Question 4

Moving on a bowed out PPF, what happens to the opportunity cost of its production as a nation specializes more in one product?

Accepted Answer

The bowed out PPF indicates th

Question 5

When one person's opportunity cost of producing a good is lower than another person's opportunity cost of producing the same good, it is called

Accepted Answer

A) an absolute advantage. 
B) a comparative advantage. 
C) specialization. 
D) production possibilities. 
E) a trade off. 
A) an absolute advantage. 
B) a comparative advantage. 
C) specialization. 
D) production possibilities. 
E) a trade off.

Question 6

-In the above figure, Jack'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) 6 gallons 
D) 1/4 of a gallon 
E) 1 gallon 
A) 2 gallons 
B) 1/2 of a gallon 
C) 6 gallons 
D) 1/4 of a gallon 
E) 1 gallon

Question 7

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 8

What economic concepts are represented in the production possibilities model?

Accepted Answer

There are a large number of economic con

Question 9

$$\begin{array} { c c c } 
\text { Possibility } & \begin{array} { c } 
\text { Airplanes } \
\text { (number) }
\end{array} & \begin{array} { c } 
\text { Cruise ships } \
\text { (number) }
\end{array} \
\hline \text { A } & 100 & 0 \
\text { B } & 80 & 20 \
\text { C } & 50 & 40 \
\text { D } & 0 & 60 \
\hline
\end{array}$$
-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 10

If an economy cannot produce more of one good without producing less of another good, this implies that which of the following has been achieved?

Accepted Answer

A) allocative efficiency 
B) minimum marginal cost 
C) PPF efficiency 
D) production efficiency 
E) maximum marginal benefit 
A) allocative efficiency 
B) minimum marginal cost 
C) PPF efficiency 
D) production efficiency 
E) maximum marginal benefit

Question 11

For country North, the opportunity cost incurred when 3 tractors are produced is 21 watches. For country South, the opportunity cost incurred when 5 tractors are produced is 100 watches. Which country has the comparative advantage in the production of tractors?

Accepted Answer

A) North 
B) South 
C) Both have the comparative advantage in the production of tractors. 
D) Neither country has the comparative advantage in the production of tractors. 
E) More information is needed about which country has the comparative advantage in the production of watches. 
A) North 
B) South 
C) Both have the comparative advantage in the production of tractors. 
D) Neither country has the comparative advantage in the production of tractors. 
E) More information is needed about which country has the comparative advantage in the production of watches.

Question 12

Describe the differences between tradeoffs and free lunches in terms of a PPF.

Accepted Answer

A tradeoff is a constraint or limit that

Question 13

-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 14

3.5 Chapter Figures
  
-The figure above shows a production possibilities frontier. In the figure, which of the following combinations of the two goods cannot be produced with the current resources and technology?

Accepted Answer

A) 2 million cell phones and 13 million DVDs 
B) 4 million cell phones and 4 million DVDs 
C) 1 million cell phones and 14 million DVDs 
D) 3 million cell phones and 5 million DVDs 
E) 5 million cell phones and no DVDs 
A) 2 million cell phones and 13 million DVDs 
B) 4 million cell phones and 4 million DVDs 
C) 1 million cell phones and 14 million DVDs 
D) 3 million cell phones and 5 million DVDs 
E) 5 million cell phones and no DVDs

Question 15

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 16

-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, India is most likely to expand its PPF to

Accepted Answer

A) PPF₃ or PPF₂. 
B) PPF₃. 
C) PPF₁. 
D) PPF₁. or PPF₂. 
E) PPF₂. 
A) PPF₃ or PPF₂. 
B) PPF₃. 
C) PPF₁. 
D) PPF₁. or PPF₂. 
E) PPF₂.

Question 17

-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 18

Why do nations engage in international trade?

Accepted Answer

Nations engage in international trade be

Question 19

-The above figure shows the production possibility frontier for a country. What is the opportunity cost to move from point D to point B?

Accepted Answer

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

Question 20

$$\begin{array} { c c c } 
\text { Possibility } & \begin{array} { c } 
\text { Bread } \
\text { (number) }
\end{array} & \begin{array} { c } 
\text { Books } \
\text { (number) }
\end{array} \
\hline \text { A } & 0 & 1,000 \
\text { B } & 100 & 900 \
\text { C } & 200 & 700 \
\text { D } & 300 & 400 \
\text { E } & 400 & 0 \
\hline
\end{array}$$
-The table above shows a production possibilities frontier for an economy. If the economy tried to produce a combination of 250 loaves of bread and 800 books,

Accepted Answer

A) there is some unemployment. 
B) there is full employment. 
C) the tradeoff between bread and books is inefficient. 
D) it cannot produce this combination because it lacks enough resources or technology. 
E) it is enjoying a free lunch. 
A) there is some unemployment. 
B) there is full employment. 
C) the tradeoff between bread and books is inefficient. 
D) it cannot produce this combination because it lacks enough resources or technology. 
E) it is enjoying a free lunch.

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

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

Moving on a bowed out PPF, what happens to the opportunity cost of its production as a nation specializes more in one product?

When one person's opportunity cost of producing a good is lower than another person's opportunity cost of producing the same good, it is called

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

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

What economic concepts are represented in the production possibilities model?

Possibility Airplanes (number) Cruise ships (number) A 100 0 B 80 20 C 50 40 D 0 60 -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?

If an economy cannot produce more of one good without producing less of another good, this implies that which of the following has been achieved?

For country North, the opportunity cost incurred when 3 tractors are produced is 21 watches. For country South, the opportunity cost incurred when 5 tractors are produced is 100 watches. Which country has the comparative advantage in the production of tractors?

Describe the differences between tradeoffs and free lunches in terms of a PPF.

-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?

3.5 Chapter Figures -The figure above shows a production possibilities frontier. In the figure, which of the following combinations of the two goods cannot be produced with the current resources and technology?

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

-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, India is most likely to expand its PPF to

-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?

Why do nations engage in international trade?

-The above figure shows the production possibility frontier for a country. What is the opportunity cost to move from point D to point B?

Possibility Bread (number) Books (number) A 0 1,000 B 100 900 C 200 700 D 300 400 E 400 0 -The table above shows a production possibilities frontier for an economy. If the economy tried to produce a combination of 250 loaves of bread and 800 books,

Getting Started

The Us and Global Economies

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 3: The Economic Problem

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

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

Moving on a bowed out PPF, what happens to the opportunity cost of its production as a nation specializes more in one product?

When one person's opportunity cost of producing a good is lower than another person's opportunity cost of producing the same good, it is called

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

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

What economic concepts are represented in the production possibilities model?

Possibility Airplanes (number) Cruise ships (number) A 100 0 B 80 20 C 50 40 D 0 60 -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?

If an economy cannot produce more of one good without producing less of another good, this implies that which of the following has been achieved?

For country North, the opportunity cost incurred when 3 tractors are produced is 21 watches. For country South, the opportunity cost incurred when 5 tractors are produced is 100 watches. Which country has the comparative advantage in the production of tractors?

Describe the differences between tradeoffs and free lunches in terms of a PPF.

-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?

3.5 Chapter Figures -The figure above shows a production possibilities frontier. In the figure, which of the following combinations of the two goods cannot be produced with the current resources and technology?

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

-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, India is most likely to expand its PPF to

-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?

Why do nations engage in international trade?

-The above figure shows the production possibility frontier for a country. What is the opportunity cost to move from point D to point B?

Possibility Bread (number) Books (number) A 0 1,000 B 100 900 C 200 700 D 300 400 E 400 0 -The table above shows a production possibilities frontier for an economy. If the economy tried to produce a combination of 250 loaves of bread and 800 books,

Getting Started

The Us and Global Economies

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

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