Question 1

Suppose that in an hour Joe can prepare 10 sandwiches or 5 pizzas.The opportunity cost of Joe producing one sandwich is

Accepted Answer

A)  2 pizzas. 
B)  1/2 pizza. 
C)  5 pizzas. 
D)  1 pizza. 
A)  2 pizzas. 
B)  1/2 pizza. 
C)  5 pizzas. 
D)  1 pizza.

Question 2

The United States has an absolute advantage in producing sugar over all of the other sugar producing countries.Does this fact mean that we should not import any sugar from the other countries?

Accepted Answer

Having an absolute advantage doesn't mea

Question 3

Country A Country B
 $$\begin{array} { | c | c | c | c | } 
\hline \begin{array} { c } 
\text { Good } X \
\text { (units of } X \text { ) }
\end{array} & \begin{array} { c } 
\text { Good } Y \
\text { (units of } Y \text { ) }
\end{array} & \begin{array} { c } 
\text { Good } X \
\text { (units of } X \text { ) }
\end{array} & \begin{array} { c } 
\text { Good } Y \
\text { (units of } Y \text { ) }
\end{array} \
\hline 0 & 16 & 0 & 12 \
\hline 2 & 12 & 2 & 9 \
\hline 4 & 8 & 4 & 6 \
\hline 6 & 4 & 6 & 3 \
\hline 8 & 0 & 8 & 0 \
\hline
\end{array}$$
-In the table above,country B is producing 4 units of X and 6 units of Y.For country B,the opportunity cost of producing an additional unit of X is

Accepted Answer

A)  4 units of Y per unit of X. 
B)  2 units of Y per unit of X. 
C)  3/2 units of Y per unit of X. 
D)  1 unit of Y per unit of X. 
A)  4 units of Y per unit of X. 
B)  2 units of Y per unit of X. 
C)  3/2 units of Y per unit of X. 
D)  1 unit of Y per unit of X.

Question 4

-Two countries,Alpha and Beta,have identical production possibilities frontiers illustrated above.If Alpha produces at point a and Beta produces at point b,then ________.

Accepted Answer

A)  Beta's economic growth rate will exceed Alpha's 
B)  Alpha consumes less than Beta today, but it will grow faster than Beta 
C)  Alpha's and Beta's economic growth rates will be the same 
D)  Beta's future consumption will be greater than Alpha's 
A)  Beta's economic growth rate will exceed Alpha's 
B)  Alpha consumes less than Beta today, but it will grow faster than Beta 
C)  Alpha's and Beta's economic growth rates will be the same 
D)  Beta's future consumption will be greater than Alpha's

Question 5

In March a factory used new technology to produce its output.Then in August a fire destroys half the factory.The new technology shifted the factory's PPF ________ and the fire shifted it ________.

Accepted Answer

A)  inward; outward 
B)  outward; inward 
C)  outward; outward 
D)  inward; inward 
A)  inward; outward 
B)  outward; inward 
C)  outward; outward 
D)  inward; inward

Question 6

The production possibilities frontier itself shows

Accepted Answer

A)  the maximum amount of resources available at any given time. 
B)  combinations of goods and services that do not fully use available resources. 
C)  the maximum rate of growth of output possible for an economy. 
D)  the maximum levels of production that can be attained. 
A)  the maximum amount of resources available at any given time. 
B)  combinations of goods and services that do not fully use available resources. 
C)  the maximum rate of growth of output possible for an economy. 
D)  the maximum levels of production that can be attained.

Question 7

Marginal cost is the opportunity cost

Accepted Answer

A)  that your activity imposes on someone else. 
B)  that arises from producing one more unit of a good or service. 
C)  of a good or service that exceeds its benefit. 
D)  of a good or service divided by the number of units produced. 
A)  that your activity imposes on someone else. 
B)  that arises from producing one more unit of a good or service. 
C)  of a good or service that exceeds its benefit. 
D)  of a good or service divided by the number of units produced.

Question 8

In one day,Sue can change the oil on 20 cars or change the tires on 20 cars.In one day,Fred can change the oil on 20 cars or change the tires on 10 cars.Sue and Fred can gain from trade if Sue changes the ________ and Fred changes the ________.

Accepted Answer

A)  tires; oil 
B)  oil; oil 
C)  oil; tires 
D)  tires; tires 
A)  tires; oil 
B)  oil; oil 
C)  oil; tires 
D)  tires; tires

Question 9

Economic growth is shown on the production possibilities frontier as

Accepted Answer

A)  a movement from one point on the PPF to another. 
B)  an outward shift in the PPF. 
C)  an inward shift in the PPF. 
D)  the curvature of the PPF. 
A)  a movement from one point on the PPF to another. 
B)  an outward shift in the PPF. 
C)  an inward shift in the PPF. 
D)  the curvature of the PPF.

Question 10

Some time ago the government of China required many highly skilled technicians and scientists to engage in unskilled agricultural labor in order to develop "proper social attitudes." This policy probably caused China to produce

Accepted Answer

A)  at an inappropriate point along its production possibilities frontier. 
B)  outside its production possibilities frontier with respect to food, but inside with respect to high-technology goods. 
C)  inside its production possibilities frontier with respect to food, but outside with respect to high-technology goods. 
D)  inside its production possibilities frontier. 
A)  at an inappropriate point along its production possibilities frontier. 
B)  outside its production possibilities frontier with respect to food, but inside with respect to high-technology goods. 
C)  inside its production possibilities frontier with respect to food, but outside with respect to high-technology goods. 
D)  inside its production possibilities frontier.

Question 11

"If an economy is producing at a point on its PPF,it has achieved allocative efficiency." True or false?
Explain.

Accepted Answer

If an economy is producing at a point on

Question 12

Jake takes 40 minutes to fry a chicken and 10 minutes to toast a slice of bread.His brother Elwood takes 60 minutes to fry a chicken and 4 minutes to toast a slice of bread.Calculate each brother's opportunity cost.Who has a comparative advantage in which activity?
Explain.Will the brothers gain if they specialize?

Accepted Answer

Jake can spend an hour to fry 1.5 chicke

Question 13

When economists state that the opportunity cost of a product increases as more of it is produced,what do they mean?
What is the opportunity cost?

Accepted Answer

In general,the opportunity cost of incre

Question 14

Each point on the production possibilities frontier achieves allocative efficiency.

Accepted Answer

A) True 
 B)False

Question 15

A country has a comparative advantage in the production of a good if its opportunity cost is lower compared to another country.

Accepted Answer

A) True 
 B)False

Question 16

Draw a production possibilities frontier between beans and peas.Label the unattainable points,the attainable points with fully employed resources,and the attainable points with unemployed resources.

Accepted Answer

@#IMG-DLM& The production possibilities frontier,w

Question 17

Considering a PPF with health care services on the vertical axis and other goods and services on the horizontal axis,the increasing production of health care services in the United States as a result of the aging population represents

Accepted Answer

A)  a movement upward along the PPF. 
B)  an outward shift of the PPF from the vertical axis. 
C)  an outward shift of the PPF from the horizontal axis. 
D)  a movement downward along the PPF. 
A)  a movement upward along the PPF. 
B)  an outward shift of the PPF from the vertical axis. 
C)  an outward shift of the PPF from the horizontal axis. 
D)  a movement downward along the PPF.

Question 18

The more we have of a good or service,the smaller is its marginal benefit and the less we are willing to pay for an additional unit of it.

Accepted Answer

A) True 
 B)False

Question 19

$\begin{array}{c}
\begin{array}{|c|}
\hline \text { Production } \
\text { point }\
\hline A \
\hline B \
\hline C \
\hline D \
\hline E\
\hline
\end{array}
\begin{array}{c|}
\hline \text { Milk}\
\text {(gallons)}\
\hline 0 \
 \hline 2 \ 
\hline 4 \ 
\hline 6 \ 
\hline 8\
\hline
\end{array}
\begin{array}{c|}
\hline\
\
\hline \text { and } \
\hline \text { and } \
\hline \text { and } \
\hline \text { and } \
\hline \text { and } \
\hline
\end{array}
\begin{array}{c|}
\hline \text {Shirts}\
\text {(number)}\
\hline 100 \
 \hline 90 \ 
\hline 70 \ 
\hline 40 \ 
\hline 0 \
 \hline
\end{array}
\end{array}$

-A (very,very small) country produces milk and shirts and its production possibilities frontier is in the table above.The nation is currently producing at point B.What is the opportunity cost of two additional gallons of milk?
At point C?
At point D?
What do your results show?

Accepted Answer

At point B,the opportunity cost of 2 add

Question 20

The most anyone is willing to pay for another purse is $30.Currently the price of a purse is $40,and the cost of producing another purse is $50.The marginal benefit of a purse is

Accepted Answer

A)  $50. 
B)  $40. 
C)  $30. 
D)  an amount not given in the answers above. 
A)  $50. 
B)  $40. 
C)  $30. 
D)  an amount not given in the answers above.

Suppose that in an hour Joe can prepare 10 sandwiches or 5 pizzas.The opportunity cost of Joe producing one sandwich is

The United States has an absolute advantage in producing sugar over all of the other sugar producing countries.Does this fact mean that we should not import any sugar from the other countries?

Country A Country B Good X (units of X ) Good Y (units of Y ) Good X (units of X ) Good Y (units of Y ) 0 16 0 12 2 12 2 9 4 8 4 6 6 4 6 3 8 0 8 0 -In the table above,country B is producing 4 units of X and 6 units of Y.For country B,the opportunity cost of producing an additional unit of X is

-Two countries,Alpha and Beta,have identical production possibilities frontiers illustrated above.If Alpha produces at point a and Beta produces at point b,then ________.

In March a factory used new technology to produce its output.Then in August a fire destroys half the factory.The new technology shifted the factory's PPF and the fire shifted it .

The production possibilities frontier itself shows

Marginal cost is the opportunity cost

In one day,Sue can change the oil on 20 cars or change the tires on 20 cars.In one day,Fred can change the oil on 20 cars or change the tires on 10 cars.Sue and Fred can gain from trade if Sue changes the and Fred changes the .

Economic growth is shown on the production possibilities frontier as

Some time ago the government of China required many highly skilled technicians and scientists to engage in unskilled agricultural labor in order to develop "proper social attitudes." This policy probably caused China to produce

"If an economy is producing at a point on its PPF,it has achieved allocative efficiency." True or false? Explain.

When economists state that the opportunity cost of a product increases as more of it is produced,what do they mean? What is the opportunity cost?

Each point on the production possibilities frontier achieves allocative efficiency.

A country has a comparative advantage in the production of a good if its opportunity cost is lower compared to another country.

Draw a production possibilities frontier between beans and peas.Label the unattainable points,the attainable points with fully employed resources,and the attainable points with unemployed resources.

Considering a PPF with health care services on the vertical axis and other goods and services on the horizontal axis,the increasing production of health care services in the United States as a result of the aging population represents

The more we have of a good or service,the smaller is its marginal benefit and the less we are willing to pay for an additional unit of it.

The most anyone is willing to pay for another purse is $30.Currently the price of a purse is $40,and the cost of producing another purse is $50.The marginal benefit of a purse is

What Is Economics

Demand and Supply

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, The Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

Inflation, Jobs, and the Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Introduction

Monitoring Macroeconomic Performance

Macroeconomic Trends

Macroeconomic Fluctuations

Macroeconomic Policy

Filters

Exam 2: The Economic Problem

Suppose that in an hour Joe can prepare 10 sandwiches or 5 pizzas.The opportunity cost of Joe producing one sandwich is

The United States has an absolute advantage in producing sugar over all of the other sugar producing countries.Does this fact mean that we should not import any sugar from the other countries?

Country A Country B Good X (units of X ) Good Y (units of Y ) Good X (units of X ) Good Y (units of Y ) 0 16 0 12 2 12 2 9 4 8 4 6 6 4 6 3 8 0 8 0 -In the table above,country B is producing 4 units of X and 6 units of Y.For country B,the opportunity cost of producing an additional unit of X is

-Two countries,Alpha and Beta,have identical production possibilities frontiers illustrated above.If Alpha produces at point a and Beta produces at point b,then ________.

In March a factory used new technology to produce its output.Then in August a fire destroys half the factory.The new technology shifted the factory's PPF ________ and the fire shifted it ________.

The production possibilities frontier itself shows

Marginal cost is the opportunity cost

In one day,Sue can change the oil on 20 cars or change the tires on 20 cars.In one day,Fred can change the oil on 20 cars or change the tires on 10 cars.Sue and Fred can gain from trade if Sue changes the ________ and Fred changes the ________.

Economic growth is shown on the production possibilities frontier as

Some time ago the government of China required many highly skilled technicians and scientists to engage in unskilled agricultural labor in order to develop "proper social attitudes." This policy probably caused China to produce

"If an economy is producing at a point on its PPF,it has achieved allocative efficiency." True or false? Explain.

When economists state that the opportunity cost of a product increases as more of it is produced,what do they mean? What is the opportunity cost?

Each point on the production possibilities frontier achieves allocative efficiency.

A country has a comparative advantage in the production of a good if its opportunity cost is lower compared to another country.

Draw a production possibilities frontier between beans and peas.Label the unattainable points,the attainable points with fully employed resources,and the attainable points with unemployed resources.

Considering a PPF with health care services on the vertical axis and other goods and services on the horizontal axis,the increasing production of health care services in the United States as a result of the aging population represents

The more we have of a good or service,the smaller is its marginal benefit and the less we are willing to pay for an additional unit of it.

The most anyone is willing to pay for another purse is $30.Currently the price of a purse is $40,and the cost of producing another purse is $50.The marginal benefit of a purse is

What Is Economics

Demand and Supply

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, The Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

Inflation, Jobs, and the Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Introduction

Monitoring Macroeconomic Performance

Macroeconomic Trends

Macroeconomic Fluctuations

Macroeconomic Policy

Filters

In March a factory used new technology to produce its output.Then in August a fire destroys half the factory.The new technology shifted the factory's PPF and the fire shifted it .

In one day,Sue can change the oil on 20 cars or change the tires on 20 cars.In one day,Fred can change the oil on 20 cars or change the tires on 10 cars.Sue and Fred can gain from trade if Sue changes the and Fred changes the .