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

"When a person has an absolute advantage in producing a good, the person necessarily has a lower opportunity cost of producing it." Is this assertion true or false?

Accepted Answer

The assertion is incorrect. An absolute

Question 3

-The figure above shows the production possibilities frontier for a country. A combination of 2 million gallons of milk and 2 million gallons of ice cream is

Accepted Answer

A) unattainable. 
B) attainable and production efficient. 
C) attainable and production inefficient. 
D) attainable but more than production efficient. 
E) More information is needed to determine if the point is attainable or not. 
A) unattainable. 
B) attainable and production efficient. 
C) attainable and production inefficient. 
D) attainable but more than production efficient. 
E) More information is needed to determine if the point is attainable or not.

Question 4

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.

Question 5

$$\begin{array} { c c c } 
\text { Possibility } & \begin{array} { c } 
\text { Fish } \
\text { (pounds) }
\end{array} & \begin{array} { c } 
\text { Fruit } \
\text { (pounds) }
\end{array} \
\hline \text { A } & 37 & 56 \
\text { B } & 31 & 78 \
\text { C } & 20 & 90 \
\text { D } & 9 & 99 \
\hline
\end{array}$$
-Robinson Crusoe divides his time between catching fish and gathering fruit. Part of his production possibilities frontier is given in the above table. If Mr. Crusoe is on his PPF and he increases the amount of fruit he gathers from 56 to 90 pounds, the opportunity cost is

Accepted Answer

A) 37 pounds of fish. 
B) 31 pounds of fish. 
C) 17 pounds of fish. 
D) 34 pounds of fruit. 
E) 90 pounds of fruit. 
A) 37 pounds of fish. 
B) 31 pounds of fish. 
C) 17 pounds of fish. 
D) 34 pounds of fruit. 
E) 90 pounds of fruit.

Question 6

-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 7

As an economy moves down along a straight line production possibilities frontier, what happens to the opportunity cost of producing the good on the horizontal axis?

Accepted Answer

A) It remains constant. 
B) It decreases. 
C) It increases. 
D) Above the midpoint it decreases until it equals 1 at the midpoint and then it increases. 
E) None of these depict what happens to opportunity cost. 
A) It remains constant. 
B) It decreases. 
C) It increases. 
D) Above the midpoint it decreases until it equals 1 at the midpoint and then it increases. 
E) None of these depict what happens to opportunity cost.

Question 8

-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 9

The bowed out (concave)shape of the production possibilities curve implies that as production of one good

Accepted Answer

A) increases, society must forgo increasing amounts of another good. 
B) increases, society must forgo decreasing amounts of another good. 
C) decreases, production of other goods decreases as well. 
D) increases, production of other goods increases as well. 
E) increases, society can obtain a free lunch. 
A) increases, society must forgo increasing amounts of another good. 
B) increases, society must forgo decreasing amounts of another good. 
C) decreases, production of other goods decreases as well. 
D) increases, production of other goods increases as well. 
E) increases, society can obtain a free lunch.

Question 10

"If Mexico is currently operating at a point beyond its production possibilities frontier, then there are unemployed or misallocated resources in Mexico." Is this statement true or false?
 Briefly explain your answer.

Accepted Answer

The statement is false. It is false on t

Question 11

Moving from a point inside the production possibilities frontier to a point on the production possibilities frontier, the opportunity cost of producing more of the good on the horizontal axis

Accepted Answer

A) increases. 
B) decreases. 
C) is constant. 
D) is 0. 
E) is infinite. 
A) increases. 
B) decreases. 
C) is constant. 
D) is 0. 
E) is infinite.

Question 12

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

Accepted Answer

A country specializes in the activities

Question 13

Economic growth depends upon which of the following?
I. Increasing the quantity of labor.
Ii. Lowering the prices of goods and services.
Iii. Advancing technology.

Accepted Answer

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

Question 14

-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 15

A bowed out production possibility frontier shows that the

Accepted Answer

A) opportunity cost of a good is constant as more of the good is produced. 
B) opportunity cost of a good decreases as more of the good is produced. 
C) opportunity cost of a good increases as more of the good is produced. 
D) opportunity cost relationship is linear. 
E) opportunity cost of producing another good is negative. 
A) opportunity cost of a good is constant as more of the good is produced. 
B) opportunity cost of a good decreases as more of the good is produced. 
C) opportunity cost of a good increases as more of the good is produced. 
D) opportunity cost relationship is linear. 
E) opportunity cost of producing another good is negative.

Question 16

In one hour John can produce 20 loaves of bread or 8 cakes. In one hour Phyllis can produce 30 loaves of bread or 15 cakes. Which of the following statements is true?

Accepted Answer

A) Phyllis has a comparative advantage in producing bread. 
B) John has a comparative advantage in producing cakes. 
C) Phyllis has an absolute advantage in both goods. 
D) John has an absolute advantage in both goods. 
E) Phyllis has a comparative advantage in producing both cakes and bread. 
A) Phyllis has a comparative advantage in producing bread. 
B) John has a comparative advantage in producing cakes. 
C) Phyllis has an absolute advantage in both goods. 
D) John has an absolute advantage in both goods. 
E) Phyllis has a comparative advantage in producing both cakes and bread.

Question 17

By specializing and trading, a country is able to

Accepted Answer

A) obtain the absolute advantage in the goods it produces. 
B) consume but not to produce combinations of goods that lie beyond its production possibilities frontier. 
C) produce but not to consume combinations of goods that lie beyond its production possibilities frontier. 
D) both produce and consume combinations of goods that lie beyond its production possibilities frontier. 
E) neither produce nor consume combinations of goods that lie beyond its production possibilities frontier. 
A) obtain the absolute advantage in the goods it produces. 
B) consume but not to produce combinations of goods that lie beyond its production possibilities frontier. 
C) produce but not to consume combinations of goods that lie beyond its production possibilities frontier. 
D) both produce and consume combinations of goods that lie beyond its production possibilities frontier. 
E) neither produce nor consume combinations of goods that lie beyond its production possibilities frontier.

Question 18

-The above figure shows the production possibility frontier for a country. What is the opportunity cost per ton of rice to move from point D to E?

Accepted Answer

A) 3000 bottles of wine 
B) 333 bottles of wine 
C) 3 bottles of wine 
D) 1/3 of a bottle of wine 
E) None of the above answers is correct. 
A) 3000 bottles of wine 
B) 333 bottles of wine 
C) 3 bottles of wine 
D) 1/3 of a bottle of wine 
E) None of the above answers is correct.

Question 19

The figure above show Liz's and Joe's production possibilities for Salads and Smoothies.
-Liz has a comparative advantage in ________ and an absolute advantage in ________.

Accepted Answer

A) smoothies only; both goods 
B) smoothies only; smoothies only 
C) both goods; both goods 
D) salads only; both goods 
E) salads only; salads only 
A) smoothies only; both goods 
B) smoothies only; smoothies only 
C) both goods; both goods 
D) salads only; both goods 
E) salads only; salads only

Question 20

-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. What is Deb's opportunity cost of assembling 1 packet?

Accepted Answer

A) 160 envelopes 
B) 40 envelopes 
C) 4 envelopes 
D) 1/4 of an envelope 
E) 4 packets 
A) 160 envelopes 
B) 40 envelopes 
C) 4 envelopes 
D) 1/4 of an envelope 
E) 4 packets

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

"When a person has an absolute advantage in producing a good, the person necessarily has a lower opportunity cost of producing it." Is this assertion true or false?

-The figure above shows the production possibilities frontier for a country. A combination of 2 million gallons of milk and 2 million gallons of ice cream is

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

-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?

As an economy moves down along a straight line production possibilities frontier, what happens to the opportunity cost of producing the good on the horizontal axis?

The bowed out (concave)shape of the production possibilities curve implies that as production of one good

"If Mexico is currently operating at a point beyond its production possibilities frontier, then there are unemployed or misallocated resources in Mexico." Is this statement true or false? Briefly explain your answer.

Moving from a point inside the production possibilities frontier to a point on the production possibilities frontier, the opportunity cost of producing more of the good on the horizontal axis

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

Economic growth depends upon which of the following? I. Increasing the quantity of labor. Ii. Lowering the prices of goods and services. Iii. Advancing technology.

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

A bowed out production possibility frontier shows that the

In one hour John can produce 20 loaves of bread or 8 cakes. In one hour Phyllis can produce 30 loaves of bread or 15 cakes. Which of the following statements is true?

By specializing and trading, a country is able to

-The above figure shows the production possibility frontier for a country. What is the opportunity cost per ton of rice to move from point D to E?

The figure above show Liz's and Joe's production possibilities for Salads and Smoothies. -Liz has a comparative advantage in and an absolute advantage in .

-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. What is Deb's opportunity cost of assembling 1 packet?

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

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

"When a person has an absolute advantage in producing a good, the person necessarily has a lower opportunity cost of producing it." Is this assertion true or false?

-The figure above shows the production possibilities frontier for a country. A combination of 2 million gallons of milk and 2 million gallons of ice cream is

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

-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?

As an economy moves down along a straight line production possibilities frontier, what happens to the opportunity cost of producing the good on the horizontal axis?

The bowed out (concave)shape of the production possibilities curve implies that as production of one good

"If Mexico is currently operating at a point beyond its production possibilities frontier, then there are unemployed or misallocated resources in Mexico." Is this statement true or false? Briefly explain your answer.

Moving from a point inside the production possibilities frontier to a point on the production possibilities frontier, the opportunity cost of producing more of the good on the horizontal axis

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

Economic growth depends upon which of the following? I. Increasing the quantity of labor. Ii. Lowering the prices of goods and services. Iii. Advancing technology.

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

A bowed out production possibility frontier shows that the

In one hour John can produce 20 loaves of bread or 8 cakes. In one hour Phyllis can produce 30 loaves of bread or 15 cakes. Which of the following statements is true?

By specializing and trading, a country is able to

-The above figure shows the production possibility frontier for a country. What is the opportunity cost per ton of rice to move from point D to E?

The figure above show Liz's and Joe's production possibilities for Salads and Smoothies. -Liz has a comparative advantage in ________ and an absolute advantage in ________.

-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. What is Deb's opportunity cost of assembling 1 packet?

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

The figure above show Liz's and Joe's production possibilities for Salads and Smoothies. -Liz has a comparative advantage in and an absolute advantage in .