Question 1

Increasing opportunity cost occurs along a production possibilities frontier because

Accepted Answer

A)  resources are not equally productive in all activities. 
B)  increasing wants need to be satisfied. 
C)  in order to produce more of one good decreasing amounts of another good must be sacrificed. 
D)  production takes time. 
A)  resources are not equally productive in all activities. 
B)  increasing wants need to be satisfied. 
C)  in order to produce more of one good decreasing amounts of another good must be sacrificed. 
D)  production takes time.

Question 2

When we cannot produce more of any good without giving up some other good that we value more highly,we have achieved

Accepted Answer

A)  production. 
B)  equity. 
C)  allocative efficiency. 
D)  the production point where the marginal benefit exceeds the marginal cost by as much as possible. 
A)  production. 
B)  equity. 
C)  allocative efficiency. 
D)  the production point where the marginal benefit exceeds the marginal cost by as much as possible.

Question 3

$$\begin{array} { | c | c | c | c | } 
\hline \begin{array} { c } 
\text { Production } \
\text { point }
\end{array} & \text { Pages typed } & & \begin{array} { c } 
\text { Web pages } \
\text { created }
\end{array} \
\hline A & 0 & \text { and } & 4 \
\hline B & 40 & \text { and } & 3 \
\hline C & 70 & \text { and } & 2 \
\hline D & 90 & \text { and } & 1 \
\hline E & 100 & \text { and } & 0 \
\hline
\end{array}$$
-Jean can either type her term paper or create Web pages during the limited time she has available.The table above shows her PPF.
a) Can Jean type 90 pages and create 2 Web pages?
b) Use the above numbers to calculate the opportunity cost of a typed page as she increases her time typing and decreases time creating a Web page.

Accepted Answer

a)Jean cannot type 90 pages and create 2

Question 4

A nation can produce at a point outside its PPF

Accepted Answer

A)  when it trades with other nations. 
B)  when it produces inefficiently. 
C)  when its PPF is bowed out. 
D)  never. 
A)  when it trades with other nations. 
B)  when it produces inefficiently. 
C)  when its PPF is bowed out. 
D)  never.

Question 5

-In the figure above,suppose that Mac and Izzie trade and reach point c.Then

Accepted Answer

A)  Mac and Izzie should both produce at point a. 
B)  Mac should produce at point b and Izzie should produce at point d. 
C)  Mac should produce at point d and Izzie should produce at point b. 
D)  Mac and Izzie should both produce at point c. 
A)  Mac and Izzie should both produce at point a. 
B)  Mac should produce at point b and Izzie should produce at point d. 
C)  Mac should produce at point d and Izzie should produce at point b. 
D)  Mac and Izzie should both produce at point c.

Question 6

Before the first Gulf War in 1991,Kuwait had the capacity to produce a certain amount of oil from its oil wells.After the war,it found that capacity greatly diminished because the oil wells had been set on fire.Draw Kuwait's PPF before and after the war,assuming that the only two goods produced are oil and food.Further assume that setting the oil wells on fire did not affect Kuwait's ability to produce food.Explain why the PPF before the war is different from the PPF after the war.

Accepted Answer

@#IMG-DLM& When a PPF is drawn,we draw it for a fi

Question 7

The state of Georgia offers free college tuition to high school students with a "B" average.In 2007,the state raised the requirement so that fewer students qualified for the scholarship. At the same time,Georgia increased state spending on health care. Suppose that college education is on the vertical axis and health care is on the horizontal axis of a PPF.These changes

Accepted Answer

A)  are example of a tradeoff. 
B)  are an example of incentives 
C)  will cause a shift out of the PPF. 
D)  will cause a shift in the of the PPF. 
A)  are example of a tradeoff. 
B)  are an example of incentives 
C)  will cause a shift out of the PPF. 
D)  will cause a shift in the of the PPF.

Question 8

Specialization and trade allow countries to consume beyond their PPFs.

Accepted Answer

A) True 
 B)False

Question 9

$$\begin{array} { | c | c | c | } 
\hline & \begin{array} { c } 
\text { U.S. production } \
\text { possibilities }
\end{array} & \begin{array} { c } 
\text { France's production } \
\text { possibilities }
\end{array} \
\hline \text { Steel } & 100 & 25 \
\hline \text { Concrete } & 200 & 100 \
\hline
\end{array}$$
-The above table shows the tons of steel and concrete that can be produced by the United States and France in an hour.From the data in the table,

Accepted Answer

A)  France has a comparative advantage in the production of concrete. 
B)  the United States has a comparative advantage in the production of concrete. 
C)  France has an absolute advantage in the production of concrete. 
D)  the United States has a comparative advantage in the production of both goods. 
A)  France has a comparative advantage in the production of concrete. 
B)  the United States has a comparative advantage in the production of concrete. 
C)  France has an absolute advantage in the production of concrete. 
D)  the United States has a comparative advantage in the production of both goods.

Question 10

-Refer to the production possibilities frontier in the figure above.If the country moves from point a to point c,the opportunity cost of the move is

Accepted Answer

A)  30 million capital goods. 
B)  20 million capital goods. 
C)  10 million capital goods. 
D)  10 million consumption goods. 
A)  30 million capital goods. 
B)  20 million capital goods. 
C)  10 million capital goods. 
D)  10 million consumption goods.

Question 11

An efficient allocation of resources occurs when we

Accepted Answer

A)  produce the goods and services that people need. 
B)  cannot produce more of a good or service without giving up some other good or service that we value more highly. 
C)  produce the goods and services that people want. 
D)  cannot produce more of a good or service without giving up some other good or service that we need. 
A)  produce the goods and services that people need. 
B)  cannot produce more of a good or service without giving up some other good or service that we value more highly. 
C)  produce the goods and services that people want. 
D)  cannot produce more of a good or service without giving up some other good or service that we need.

Question 12

Markets are best defined as

Accepted Answer

A)  arrangements where buyers and sellers get together to buy and sell. 
B)  specific geographic locations where people get together to buy and sell. 
C)  hypothetical constructs used to analyze how people form their tastes and preferences. 
D)  places where people can inspect goods and services carefully. 
A)  arrangements where buyers and sellers get together to buy and sell. 
B)  specific geographic locations where people get together to buy and sell. 
C)  hypothetical constructs used to analyze how people form their tastes and preferences. 
D)  places where people can inspect goods and services carefully.

Question 13

-In the figure above,the marginal cost of the fifth computer is

Accepted Answer

A)  0 television sets per computer. 
B)  4 television sets per computer. 
C)  20 television sets per computer. 
D)  35 television sets per computer. 
A)  0 television sets per computer. 
B)  4 television sets per computer. 
C)  20 television sets per computer. 
D)  35 television sets per computer.

Question 14

When economic growth occurs,the

Accepted Answer

A)  economy moves along its production possibilities frontier 
B)  production possibilities frontier shifts outward 
C)  production possibilities frontier becomes steeper 
D)  production possibilities frontier shifts outward but no longer limits the amount that can be produced. 
A)  economy moves along its production possibilities frontier 
B)  production possibilities frontier shifts outward 
C)  production possibilities frontier becomes steeper 
D)  production possibilities frontier shifts outward but no longer limits the amount that can be produced.

Question 15

Betty and Ann live on a desert island.With a day's labor,Ann can produce 8 fish or 4 coconuts; Betty can produce 6 fish or 2 coconuts.Ann's opportunity cost of producing 1 coconut is ________ and she should specialize in the production of ________.

Accepted Answer

A)  8 fish per coconut; fish 
B)  2 fish per coconut; coconuts 
C)  6 fish per coconut; coconuts 
D)  0 fish per coconut; coconuts 
A)  8 fish per coconut; fish 
B)  2 fish per coconut; coconuts 
C)  6 fish per coconut; coconuts 
D)  0 fish per coconut; coconuts

Question 16

The production possibilities frontier represents

Accepted Answer

A)  the maximum amount of labor and capital available to society. 
B)  combinations of goods and services among which consumers are indifferent. 
C)  the maximum levels of production that can be attained. 
D)  the maximum rate of growth of capital and labor in a country. 
A)  the maximum amount of labor and capital available to society. 
B)  combinations of goods and services among which consumers are indifferent. 
C)  the maximum levels of production that can be attained. 
D)  the maximum rate of growth of capital and labor in a country.

Question 17

If two countries specialize in the production of goods in which they have a comparative advantage,they can experience gains from trade.

Accepted Answer

A) True 
 B)False

Question 18

Assuming farmers can plant either corn or soybeans,as U.S.farmers plant more corn to meet rising global demand,

Accepted Answer

A)  the opportunity cost of producing corn increases. 
B)  the opportunity cost of producing corn decreases. 
C)  the U.S. PPF for corn and other goods and services shifts outward. 
D)  the United States produces at a point beyond its PPF. 
A)  the opportunity cost of producing corn increases. 
B)  the opportunity cost of producing corn decreases. 
C)  the U.S. PPF for corn and other goods and services shifts outward. 
D)  the United States produces at a point beyond its PPF.

Question 19

-In the above figure,curve b shows the

Accepted Answer

A)  bottles of soda that people are willing to forgo to get another bicycle. 
B)  bottles of soda that people must forgo to get another bicycle. 
C)  benefits of producing more bicycles is greater than the benefits of producing more soda. 
D)  benefits of producing more soda is greater than the benefits of producing more bicycles. 
A)  bottles of soda that people are willing to forgo to get another bicycle. 
B)  bottles of soda that people must forgo to get another bicycle. 
C)  benefits of producing more bicycles is greater than the benefits of producing more soda. 
D)  benefits of producing more soda is greater than the benefits of producing more bicycles.

Question 20

Mary takes 4 minutes to make a sandwich and 6 minutes to mix a cocktail.Her sister Ash takes 4 minutes to make a sandwich and 4 minutes to mix a cocktail.Calculate each sister's opportunity cost. Which of the two sisters has an absolute advantage in making sandwiches?
In mixing cocktails?
Which of the two has a comparative advantage in making sandwiches?
In mixing cocktails?

Accepted Answer

Mary can spend an hour to make 15 sandwi

Increasing opportunity cost occurs along a production possibilities frontier because

When we cannot produce more of any good without giving up some other good that we value more highly,we have achieved

A nation can produce at a point outside its PPF

-In the figure above,suppose that Mac and Izzie trade and reach point c.Then

Specialization and trade allow countries to consume beyond their PPFs.

U.S. production possibilities France's production possibilities Steel 100 25 Concrete 200 100 -The above table shows the tons of steel and concrete that can be produced by the United States and France in an hour.From the data in the table,

-Refer to the production possibilities frontier in the figure above.If the country moves from point a to point c,the opportunity cost of the move is

An efficient allocation of resources occurs when we

Markets are best defined as

-In the figure above,the marginal cost of the fifth computer is

When economic growth occurs,the

Betty and Ann live on a desert island.With a day's labor,Ann can produce 8 fish or 4 coconuts; Betty can produce 6 fish or 2 coconuts.Ann's opportunity cost of producing 1 coconut is and she should specialize in the production of .

The production possibilities frontier represents

If two countries specialize in the production of goods in which they have a comparative advantage,they can experience gains from trade.

Assuming farmers can plant either corn or soybeans,as U.S.farmers plant more corn to meet rising global demand,

-In the above figure,curve b shows the

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

Increasing opportunity cost occurs along a production possibilities frontier because

When we cannot produce more of any good without giving up some other good that we value more highly,we have achieved

A nation can produce at a point outside its PPF

-In the figure above,suppose that Mac and Izzie trade and reach point c.Then

Specialization and trade allow countries to consume beyond their PPFs.

U.S. production possibilities France's production possibilities Steel 100 25 Concrete 200 100 -The above table shows the tons of steel and concrete that can be produced by the United States and France in an hour.From the data in the table,

-Refer to the production possibilities frontier in the figure above.If the country moves from point a to point c,the opportunity cost of the move is

An efficient allocation of resources occurs when we

Markets are best defined as

-In the figure above,the marginal cost of the fifth computer is

When economic growth occurs,the

Betty and Ann live on a desert island.With a day's labor,Ann can produce 8 fish or 4 coconuts; Betty can produce 6 fish or 2 coconuts.Ann's opportunity cost of producing 1 coconut is ________ and she should specialize in the production of ________.

The production possibilities frontier represents

If two countries specialize in the production of goods in which they have a comparative advantage,they can experience gains from trade.

Assuming farmers can plant either corn or soybeans,as U.S.farmers plant more corn to meet rising global demand,

-In the above figure,curve b shows the

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

Betty and Ann live on a desert island.With a day's labor,Ann can produce 8 fish or 4 coconuts; Betty can produce 6 fish or 2 coconuts.Ann's opportunity cost of producing 1 coconut is and she should specialize in the production of .