Exam 2: The Economic Problem

The principle of decreasing marginal benefit implies that the

Point Production of X Production of Y A 0 40 B 3 36 C 6 28 D 9 16 E 12 0 -The above table shows production combinations on a country's production possibilities frontier.What is the opportunity cost of one unit of Y when the production of good Y increases from 16 to 28 units?

What is the relationship between the bowed out shape of the production possibilities frontier and the increasing opportunity cost of a good as more of it is produced?

Quantity (pizzas per day) Marginal benefit (cans per day) Marginal cost (cans per day) 10 26 14 20 24 16 30 22 18 40 20 20 50 18 22 60 16 24 70 14 26 -The table above shows the marginal benefit from pizza and the marginal cost of pizza in cans of soda forgone.If ________ pizzas are produced,the quantity of soda that people are willing to give up to get an additional pizza is more than the quantity of soda that they must give up to get that additional pizza.

Which of the following statements regarding the production possibilities frontier is true?

As we increase the production of computers,we find that we must give up larger and larger amounts of DVD players per computer.

-Refer to the production possibilities frontier in the figure above.Suppose a country is producing at point a.A movement to point ________ means that the country ________.

A tradeoff is illustrated by

In the United States,the government coordinates most of the economic activity.

A person has a comparative advantage in an activity whenever he or she

Tom takes 20 minutes to cook an egg and 5 minutes to make a sandwich. Jerry takes 15 minutes to cook an egg and 3 minutes to make a sandwich. If Tom and Jerry trade

The production possibilities frontier is the boundary between those combination of goods and services that can be

-In the figure above,a point showing an inefficient production point is point

A bowed outward production possibilities frontier occurs when

Using a production possibilities frontier,economic growth is illustrated by a

The tradeoff between current consumption and the production of capital goods also reflects a tradeoff between

Japan can use all of its resources to produce 100 videos or 400 shoes.China can use all of its resources to produce 25 videos or 200 shoes.Which nation has the comparative advantage in shoes and which nation has the comparative advantage in videos?

Blue Violet's Sweet Pansy's production possibilities production possibilities Teapots (number per week) 150 100 50 0 \& \& \& \& Coffeepots Teapots (number per week) 0 25 50 75 Teapots (number per week) 150 100 50 0 \& \& \& \& Coffeepots Teapots (number per week) 0 50 100 150 -Two countries,Blue Violet and Sweet Pansy,produce only two goods: teapots and coffeepots.The table above gives their production possibilities.

A society that is producing on its production possibilities frontier is

The principle of increasing opportunity cost leads to