Question 1

Opportunity cost is illustrated in a production possibilities frontier (PPF) by a movement

Accepted Answer

A)  from the region within the PPF to a point on the PPF. 
B)  from the region within the PPF to the region outside of the PPF. 
C)  from the region outside of the PPF to a point on the PPF. 
D)  along the PPF where to gain more of one good it is necessary to give some of another good. 
A)  from the region within the PPF to a point on the PPF. 
B)  from the region within the PPF to the region outside of the PPF. 
C)  from the region outside of the PPF to a point on the PPF. 
D)  along the PPF where to gain more of one good it is necessary to give some of another good.

Question 2

-In the above figure,once on PPF₂,a country would grow slowest by producing at point

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  D. 
A)  A. 
B)  B. 
C)  C. 
D)  D.

Question 3

Harry produces 2 balloon rides and 4 boat rides an hour.Harry could produce more balloon rides but to do so he must produce fewer boat rides.Harry is ________ his production possibilities frontier.

Accepted Answer

A)  producing inside 
B)  producing on 
C)  producing outside 
D)  producing either inside or on 
A)  producing inside 
B)  producing on 
C)  producing outside 
D)  producing either inside or on

Question 4

Resource use is allocatively efficient when marginal benefit is

Accepted Answer

A)  greater than marginal cost. 
B)  equal to marginal cost. 
C)  less than marginal cost. 
D)  at its maximum value. 
A)  greater than marginal cost. 
B)  equal to marginal cost. 
C)  less than marginal cost. 
D)  at its maximum value.

Question 5

-In the above figure,point A is ________,and point B is ________.

Accepted Answer

A)  attainable, attainable 
B)  attainable, unattainable 
C)  unattainable, attainable 
D)  unattainable, unattainable 
A)  attainable, attainable 
B)  attainable, unattainable 
C)  unattainable, attainable 
D)  unattainable, unattainable

Question 6

Blue Violet's Sweet Pansy's
production possibilities production possibilities
 $\begin{array}{c}
\begin{array}{c}
 \text { Teapots } \
\text { (number } \
\text { per week) }\
\hline150 \
\hline 100 \
\hline 50 \
\hline 0\
\hline
\end{array}
\begin{array}{c}
\
\
\
\hline\&\
\hline\&\
\hline\&\
\hline\&\
\hline
\end{array}
\begin{array}{c}
\text { Coffeepots Teapots } \
\text { (number } \
\text { per week) }\
\hline0 \
\hline 25 \
\hline 50 \
\hline 75\
\hline
\end{array}
\begin{array}{c}
 \text { Teapots } \
\text { (number } \
\text { per week) }\
\hline150 \
\hline 100 \
\hline 50 \
\hline 0\
\hline 
\end{array}
\begin{array}{lll}
\
\
\
\hline\&\
\hline\&\
\hline\&\
\hline\&\
\hline
\end{array}
\begin{array}{c}
\text { Coffeepots Teapots } \
\text { (number } \
\text { per week) }\
\hline0\
\hline 50 \
\hline 100 \
\hline 150\
\hline
\end{array}
\end{array}$

-Two countries,Blue Violet and Sweet Pansy,produce only two goods: teapots and coffeepots.The table above gives their production possibilities.With specialization and trade,Sweet Pansy produces ________ and Blue Violet produces ________.

Accepted Answer

A)  150 coffeepots, 150 teapots 
B)  150 teapots, 75 coffeepots 
C)  150 teapots and 150 coffeepots, nothing 
D)  100 teapots and 25 coffeepots, 100 teapots and 50 coffeepots 
A)  150 coffeepots, 150 teapots 
B)  150 teapots, 75 coffeepots 
C)  150 teapots and 150 coffeepots, nothing 
D)  100 teapots and 25 coffeepots, 100 teapots and 50 coffeepots

Question 7

A point outside a production possibilities frontier indicates

Accepted Answer

A)  that resources are not being used efficiently. 
B)  an output combination that society cannot attain given its current level of resources and technology. 
C)  that resources are being used very efficiently. 
D)  that both goods are characterized by increasing costs. 
A)  that resources are not being used efficiently. 
B)  an output combination that society cannot attain given its current level of resources and technology. 
C)  that resources are being used very efficiently. 
D)  that both goods are characterized by increasing costs.

Question 8

Suppose the United States discovers a way to produce clean nuclear fuel.The effect of this discovery would be to

Accepted Answer

A)  lead the United States to produce less nuclear fuel. 
B)  force the United States to produce at a point inside its PPF. 
C)  shift the U.S. PPF outward. 
D)  shift the U.S. PPF inward. 
A)  lead the United States to produce less nuclear fuel. 
B)  force the United States to produce at a point inside its PPF. 
C)  shift the U.S. PPF outward. 
D)  shift the U.S. PPF inward.

Question 9

Moving from one point on the production possibilities frontier to another ________.

Accepted Answer

A)  involves a tradeoff but does not incur an opportunity cost 
B)  involves an opportunity cost but no tradeoff 
C)  involves a tradeoff and incurs an opportunity cost 
D)  involves no tradeoff but it does incur an opportunity cost 
A)  involves a tradeoff but does not incur an opportunity cost 
B)  involves an opportunity cost but no tradeoff 
C)  involves a tradeoff and incurs an opportunity cost 
D)  involves no tradeoff but it does incur an opportunity cost

Question 10

-The figure above illustrates Mary's production possibilities frontier.If Mary wants to move from point b to point c,she must

Accepted Answer

A)  improve technology. 
B)  increase the accumulation of capital. 
C)  give up some of good Y in order to obtain more of good X. 
D)  give up some of good X in order to obtain more of good Y. 
A)  improve technology. 
B)  increase the accumulation of capital. 
C)  give up some of good Y in order to obtain more of good X. 
D)  give up some of good X in order to obtain more of good Y.

Question 11

As an economy's capital stock increases,the economy

Accepted Answer

A)  generally experiences increased unemployment of other resources, such as labor. 
B)  generally decides to engage in international trade. 
C)  experiences economic growth. 
D)  gains an absolute advantage in the production of capital goods. 
A)  generally experiences increased unemployment of other resources, such as labor. 
B)  generally decides to engage in international trade. 
C)  experiences economic growth. 
D)  gains an absolute advantage in the production of capital goods.

Question 12

$$\begin{array} { | c | c | } 
\hline \begin{array} { c } 
\text { Television } \
\text { sets (millions } \
\text { per year) }
\end{array} & \begin{array} { c } 
\text { Willingness to } \
\text { pay } \
\text { (computers per } \
\text { television set) }
\end{array} \
\hline 1 & 2.5 \
\hline 2 & 2.0 \
\hline 3 & 1.5 \
\hline 4 & 1.0 \
\hline 5 & 0.5 \
\hline
\end{array}$$
-In the table above,the marginal benefit of the 4 millionth television set is

Accepted Answer

A)  negative 0.5 computers per television set. 
B)  0.25 computers per television set. 
C)  0.5 computers per television set. 
D)  1.0 computer per television set. 
A)  negative 0.5 computers per television set. 
B)  0.25 computers per television set. 
C)  0.5 computers per television set. 
D)  1.0 computer per television set.

Question 13

To obtain the gains available from comparative advantage,individuals or countries must do more than specialize; they must also

Accepted Answer

A)  save. 
B)  invest. 
C)  engage in research and development. 
D)  trade. 
A)  save. 
B)  invest. 
C)  engage in research and development. 
D)  trade.

Question 14

Economic growth can be pictured in a production possibilities frontier diagram by

Accepted Answer

A)  making the production possibilities frontier more bowed out. 
B)  making the production possibilities frontier less bowed out. 
C)  shifting the production possibilities frontier outward. 
D)  shifting the production possibilities frontier inward. 
A)  making the production possibilities frontier more bowed out. 
B)  making the production possibilities frontier less bowed out. 
C)  shifting the production possibilities frontier outward. 
D)  shifting the production possibilities frontier inward.

Question 15

Economic growth can be represented by

Accepted Answer

A)  a movement down the production possibilities frontier (PPF). 
B)  a movement up the production possibilities frontier (PPF). 
C)  an inward shift of the production possibilities frontier (PPF). 
D)  an outward shift of the production possibilities frontier (PPF). 
A)  a movement down the production possibilities frontier (PPF). 
B)  a movement up the production possibilities frontier (PPF). 
C)  an inward shift of the production possibilities frontier (PPF). 
D)  an outward shift of the production possibilities frontier (PPF).

Question 16

If marginal benefit is greater than marginal cost for the production of cars,to reach the allocative efficient quantity of cars,the production of cars must be increased.

Accepted Answer

A) True 
 B)False

Question 17

Markets

Accepted Answer

A)  facilitate trade. 
B)  allow traders to enjoy gains from trade. 
C)  coordinate price information between buyers and sellers. 
D)  All of the above answers are correct. 
A)  facilitate trade. 
B)  allow traders to enjoy gains from trade. 
C)  coordinate price information between buyers and sellers. 
D)  All of the above answers are correct.

Question 18

As long as the marginal benefit from a good is greater than its marginal cost,an economy is operating efficiently.

Accepted Answer

A) True 
 B)False

Question 19

Economic growth is the result of all of the following except

Accepted Answer

A)  technological change. 
B)  capital accumulation. 
C)  opportunity cost. 
D)  investment in human capital. 
A)  technological change. 
B)  capital accumulation. 
C)  opportunity cost. 
D)  investment in human capital.

Question 20

$$\begin{array} { | c | c | c | } 
\hline \text { Point } & \begin{array} { c } 
\text { Production } \
\text { chocolate bars }
\end{array} & \begin{array} { c } 
\text { Production } \
\text { cans of cola }
\end{array} \
\hline \text { A } & 0 & 100 \
\hline \text { B } & 10 & 90 \
\hline \text { C } & 20 & 70 \
\hline \text { D } & 30 & 40 \
\hline \text { E } & 40 & 0 \
\hline
\end{array}$$
-The above table shows production points on Sweet-Tooth Land's production possibilities frontier.Which of the following is an example of a point that is inefficient?

Accepted Answer

A)  0 chocolate bars and 100 cans of cola 
B)  20 chocolate bars and 80 cans of cola 
C)  32 chocolate bars and 40 cans of cola 
D)  38 chocolate bars and 0 cans of cola 
A)  0 chocolate bars and 100 cans of cola 
B)  20 chocolate bars and 80 cans of cola 
C)  32 chocolate bars and 40 cans of cola 
D)  38 chocolate bars and 0 cans of cola

Opportunity cost is illustrated in a production possibilities frontier (PPF) by a movement

-In the above figure,once on PPF₂,a country would grow slowest by producing at point

Harry produces 2 balloon rides and 4 boat rides an hour.Harry could produce more balloon rides but to do so he must produce fewer boat rides.Harry is ________ his production possibilities frontier.

Resource use is allocatively efficient when marginal benefit is

-In the above figure,point A is ,and point B is .

A point outside a production possibilities frontier indicates

Suppose the United States discovers a way to produce clean nuclear fuel.The effect of this discovery would be to

Moving from one point on the production possibilities frontier to another ________.

-The figure above illustrates Mary's production possibilities frontier.If Mary wants to move from point b to point c,she must

As an economy's capital stock increases,the economy

Television sets (millions per year) Willingness to pay (computers per television set) 1 2.5 2 2.0 3 1.5 4 1.0 5 0.5 -In the table above,the marginal benefit of the 4 millionth television set is

To obtain the gains available from comparative advantage,individuals or countries must do more than specialize; they must also

Economic growth can be pictured in a production possibilities frontier diagram by

Economic growth can be represented by

If marginal benefit is greater than marginal cost for the production of cars,to reach the allocative efficient quantity of cars,the production of cars must be increased.

Markets

As long as the marginal benefit from a good is greater than its marginal cost,an economy is operating efficiently.

Economic growth is the result of all of the following except

Point Production chocolate bars Production cans of cola A 0 100 B 10 90 C 20 70 D 30 40 E 40 0 -The above table shows production points on Sweet-Tooth Land's production possibilities frontier.Which of the following is an example of a point that is inefficient?

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

Opportunity cost is illustrated in a production possibilities frontier (PPF) by a movement

-In the above figure,once on PPF₂,a country would grow slowest by producing at point

Harry produces 2 balloon rides and 4 boat rides an hour.Harry could produce more balloon rides but to do so he must produce fewer boat rides.Harry is ________ his production possibilities frontier.

Resource use is allocatively efficient when marginal benefit is

-In the above figure,point A is ________,and point B is ________.

A point outside a production possibilities frontier indicates

Suppose the United States discovers a way to produce clean nuclear fuel.The effect of this discovery would be to

Moving from one point on the production possibilities frontier to another ________.

-The figure above illustrates Mary's production possibilities frontier.If Mary wants to move from point b to point c,she must

As an economy's capital stock increases,the economy

Television sets (millions per year) Willingness to pay (computers per television set) 1 2.5 2 2.0 3 1.5 4 1.0 5 0.5 -In the table above,the marginal benefit of the 4 millionth television set is

To obtain the gains available from comparative advantage,individuals or countries must do more than specialize; they must also

Economic growth can be pictured in a production possibilities frontier diagram by

Economic growth can be represented by

If marginal benefit is greater than marginal cost for the production of cars,to reach the allocative efficient quantity of cars,the production of cars must be increased.

Markets

As long as the marginal benefit from a good is greater than its marginal cost,an economy is operating efficiently.

Economic growth is the result of all of the following except

Point Production chocolate bars Production cans of cola A 0 100 B 10 90 C 20 70 D 30 40 E 40 0 -The above table shows production points on Sweet-Tooth Land's production possibilities frontier.Which of the following is an example of a point that is inefficient?

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 the above figure,point A is ,and point B is .