Question 1

Using the production possibilities frontier model,unemployment is described as producing at a point

Accepted Answer

A)  on the exact middle of the PPF curve. 
B)  on either end of the PPF curve. 
C)  inside the PPF curve. 
D)  outside the PPF curve. 
A)  on the exact middle of the PPF curve. 
B)  on either end of the PPF curve. 
C)  inside the PPF curve. 
D)  outside the PPF curve.

Question 2

Comparative advantage is

Accepted Answer

A)  the ability to perform an activity at a lower opportunity cost than anyone else. 
B)  the ability to perform an activity at a higher opportunity cost than anyone else. 
C)  the ability to perform an activity at a zero opportunity cost. 
D)  another name for absolute advantage. 
A)  the ability to perform an activity at a lower opportunity cost than anyone else. 
B)  the ability to perform an activity at a higher opportunity cost than anyone else. 
C)  the ability to perform an activity at a zero opportunity cost. 
D)  another name for absolute advantage.

Question 3

Which of the following is NOT true concerning a society's production possibilities frontier (PPF)?

Accepted Answer

A)  It reveals the maximum amount of any two goods that can be produced from a given quantity of resources. 
B)  Tradeoffs occur when moving along a PPF. 
C)  Production efficiency occurs when production is on the frontier itself. 
D)  Consumers will receive equal benefits from the two goods illustrated in the PPF. 
A)  It reveals the maximum amount of any two goods that can be produced from a given quantity of resources. 
B)  Tradeoffs occur when moving along a PPF. 
C)  Production efficiency occurs when production is on the frontier itself. 
D)  Consumers will receive equal benefits from the two goods illustrated in the PPF.

Question 4

A country that must decrease production of one good in order to increase the production of another

Accepted Answer

A)  must be using resources inefficiently. 
B)  must be producing on its production possibilities frontier. 
C)  must be producing beyond its production possibilities frontier. 
D)  must have private ownership of property. 
A)  must be using resources inefficiently. 
B)  must be producing on its production possibilities frontier. 
C)  must be producing beyond its production possibilities frontier. 
D)  must have private ownership of property.

Question 5

$$\begin{array} { | c | c | c | } 
\hline \text { Point } & \begin{array} { c } 
\text { Production of } \
\text { grain } \
\text { (tons) }
\end{array} & \begin{array} { c } 
\text { Production of cars } \
\text { (cars) }
\end{array} \
\hline \text { A } & 0 & 30 \
\hline \text { B } & 2 & 28 \
\hline \text { C } & 4 & 24 \
\hline \text { D } & 6 & 18 \
\hline \text { E } & 8 & 10 \
\hline \text { F } & 10 & 0 \
\hline
\end{array}$$
-The table above lists six points on the production possibilities frontier for grain and cars.From this information you can conclude that production is inefficient if this economy produces

Accepted Answer

A)  6 tons of grain and 18 cars. 
B)  4 tons of grain and 26 cars. 
C)  2 tons of grain and 27 cars. 
D)  8 tons of grain and 10 cars. 
A)  6 tons of grain and 18 cars. 
B)  4 tons of grain and 26 cars. 
C)  2 tons of grain and 27 cars. 
D)  8 tons of grain and 10 cars.

Question 6

Increasing opportunity cost while moving along a production possibilities frontier is the result of

Accepted Answer

A)  taxes. 
B)  firms' needs to produce profits. 
C)  the fact that it is more difficult to use resources efficiently the more society produces. 
D)  the fact that resources are not equally productive in alternative uses. 
A)  taxes. 
B)  firms' needs to produce profits. 
C)  the fact that it is more difficult to use resources efficiently the more society produces. 
D)  the fact that resources are not equally productive in alternative uses.

Question 7

-In the figure above,moving from point B to point D

Accepted Answer

A)  has an opportunity cost of one ton of butter per month. 
B)  has an opportunity cost of one ton of guns per month. 
C)  requires an increase in technology. 
D)  is impossible. 
A)  has an opportunity cost of one ton of butter per month. 
B)  has an opportunity cost of one ton of guns per month. 
C)  requires an increase in technology. 
D)  is impossible.

Question 8

-In the above figure,which point represents an attainable but inefficient production point?

Accepted Answer

A)  Point C 
B)  Point N 
C)  Point L 
D)  Point D 
A)  Point C 
B)  Point N 
C)  Point L 
D)  Point D

Question 9

-In the figure above,Joe is producing at point A.Joe's opportunity cost of producing one shirt is

Accepted Answer

A)  5/3 of a pair of pants per shirt. 
B)  3/5 of a pair of pants per shirt. 
C)  5 pairs of pants per shirt. 
D)  2 pairs of pants per shirt. 
A)  5/3 of a pair of pants per shirt. 
B)  3/5 of a pair of pants per shirt. 
C)  5 pairs of pants per shirt. 
D)  2 pairs of pants per shirt.

Question 10

When the production possibilities frontier bows outward from the origin,

Accepted Answer

A)  some of society's resources are unemployed. 
B)  opportunity costs are constant. 
C)  opportunity costs are increasing. 
D)  opportunity costs are decreasing. 
A)  some of society's resources are unemployed. 
B)  opportunity costs are constant. 
C)  opportunity costs are increasing. 
D)  opportunity costs are decreasing.

Question 11

Any production point outside the production possibilities frontier is

Accepted Answer

A)  unattainable. 
B)  associated with unused resources. 
C)  attainable only if prices fall. 
D)  attainable only if prices rise. 
A)  unattainable. 
B)  associated with unused resources. 
C)  attainable only if prices fall. 
D)  attainable only if prices rise.

Question 12

$$\begin{array} { | c | c | c | } 
\hline \text { Point } & \begin{array} { c } 
\text { Production } \
\text { chocolate bars }
\end{array} & \begin{array} { c } 
\text { Production } \
\text { cans of cola }
\end{array} \
\hline \text { A } & 0 & 100 \
\hline \text { B } & 10 & 90 \
\hline \text { C } & 20 & 70 \
\hline \text { D } & 30 & 40 \
\hline \text { E } & 40 & 0 \
\hline
\end{array}$$
-The above table shows production points on Sweet-Tooth Land's production possibilities frontier.A movement from ________ represents the greatest opportunity cost of increasing cola production.

Accepted Answer

A)  point E to point D 
B)  point D to point C 
C)  point C to point B 
D)  point B to point A 
A)  point E to point D 
B)  point D to point C 
C)  point C to point B 
D)  point B to point A

Question 13

The term "market" refers to

Accepted Answer

A)  physical structures only. 
B)  locations where buyers and sellers physically meet. 
C)  any arrangement that enables buyers and sellers to get information and trade with one another. 
D)  trading arrangements that have been approved by the government. 
A)  physical structures only. 
B)  locations where buyers and sellers physically meet. 
C)  any arrangement that enables buyers and sellers to get information and trade with one another. 
D)  trading arrangements that have been approved by the government.

Question 14

-In the figure above,if 4 million computers are produced per year then the ________ should be produced to achieve the allocatively efficient use of resources

Accepted Answer

A)  marginal cost of a computer exceeds the marginal benefit of a computer, so more computers 
B)  marginal cost of a computer exceeds the marginal benefit of a computer, so fewer computers 
C)  marginal benefit of a computer exceeds the marginal cost of a computer, so more computers 
D)  marginal benefit of a computer exceeds the marginal cost of a computer, so fewer computers 
A)  marginal cost of a computer exceeds the marginal benefit of a computer, so more computers 
B)  marginal cost of a computer exceeds the marginal benefit of a computer, so fewer computers 
C)  marginal benefit of a computer exceeds the marginal cost of a computer, so more computers 
D)  marginal benefit of a computer exceeds the marginal cost of a computer, so fewer computers

Question 15

$$\begin{array} { | c | c | c | } 
\hline \text { Point } & \begin{array} { c } 
\text { Production } \
\text { of } X
\end{array} & \begin{array} { c } 
\text { Production } \
\text { of } Y
\end{array} \
\hline a & 0 & 40 \
\hline b & 4 & 36 \
\hline c & 8 & 28 \
\hline d & 12 & 16 \
\hline e & 16 & 0 \
\hline
\end{array}$$
-Refer to the table above,which gives five points on a nation's PPF.The opportunity cost of increasing the production of Y from 16 to 36 units is a total of

Accepted Answer

A)  1/5 unit of X per unit of Y. 
B)  2/5 unit of X per unit of Y. 
C)  1/2 unit of X per unit of Y. 
D)  3/5 unit of X per unit of Y. 
A)  1/5 unit of X per unit of Y. 
B)  2/5 unit of X per unit of Y. 
C)  1/2 unit of X per unit of Y. 
D)  3/5 unit of X per unit of Y.

Question 16

Suppose that the government is trying to decide between allocating its resources to build more dams or to build more freeways.In terms of forgone dams,as more freeways are constructed,the marginal benefit of additional freeways ________ and the marginal cost of additional freeways ________.

Accepted Answer

A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases 
A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases

Question 17

A point inside a production possibilities frontier

Accepted Answer

A)  could indicate that some resources are unemployed. 
B)  is unattainable. 
C)  is more efficient than points on the production possibilities frontier. 
D)  implies that too much capital and not enough labor are being used. 
A)  could indicate that some resources are unemployed. 
B)  is unattainable. 
C)  is more efficient than points on the production possibilities frontier. 
D)  implies that too much capital and not enough labor are being used.

Question 18

If a country operates on its PPF,it achieves production efficiency.

Accepted Answer

A) True 
 B)False

Question 19

-Employees at Bank of America are good at providing banking services and workers at Ben & Jerry's are good at making ice cream. The figure above shows the marginal cost and marginal benefit curves for ice cream. As Ben & Jerry's increases production from 1 to 2 million gallons of ice cream,the

Accepted Answer

A)  marginal cost curve shifts downward. 
B)  marginal cost curve shifts upward. 
C)  opportunity cost of ice cream decreases. 
D)  opportunity cost of ice cream increases to 2 banking services per gallon. 
A)  marginal cost curve shifts downward. 
B)  marginal cost curve shifts upward. 
C)  opportunity cost of ice cream decreases. 
D)  opportunity cost of ice cream increases to 2 banking services per gallon.

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.What is the opportunity cost of one chocolate bar if Sweet-tooth Land moves from point C to point D?

Accepted Answer

A)  30 cans of cola per chocolate bar 
B)  10 cans of cola per chocolate bar 
C)  3 cans of cola per chocolate bar 
D)  1/3 can of cola per chocolate bar 
A)  30 cans of cola per chocolate bar 
B)  10 cans of cola per chocolate bar 
C)  3 cans of cola per chocolate bar 
D)  1/3 can of cola per chocolate bar

Using the production possibilities frontier model,unemployment is described as producing at a point

Comparative advantage is

Which of the following is NOT true concerning a society's production possibilities frontier (PPF)?

A country that must decrease production of one good in order to increase the production of another

Point Production of grain (tons) Production of cars (cars) A 0 30 B 2 28 C 4 24 D 6 18 E 8 10 F 10 0 -The table above lists six points on the production possibilities frontier for grain and cars.From this information you can conclude that production is inefficient if this economy produces

Increasing opportunity cost while moving along a production possibilities frontier is the result of

-In the figure above,moving from point B to point D

-In the above figure,which point represents an attainable but inefficient production point?

-In the figure above,Joe is producing at point A.Joe's opportunity cost of producing one shirt is

When the production possibilities frontier bows outward from the origin,

Any production point outside the production possibilities frontier is

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.A movement from ________ represents the greatest opportunity cost of increasing cola production.

The term "market" refers to

-In the figure above,if 4 million computers are produced per year then the ________ should be produced to achieve the allocatively efficient use of resources

Point Production of X Production of Y a 0 40 b 4 36 c 8 28 d 12 16 e 16 0 -Refer to the table above,which gives five points on a nation's PPF.The opportunity cost of increasing the production of Y from 16 to 36 units is a total of

Suppose that the government is trying to decide between allocating its resources to build more dams or to build more freeways.In terms of forgone dams,as more freeways are constructed,the marginal benefit of additional freeways and the marginal cost of additional freeways .

A point inside a production possibilities frontier

If a country operates on its PPF,it achieves production efficiency.

-Employees at Bank of America are good at providing banking services and workers at Ben & Jerry's are good at making ice cream. The figure above shows the marginal cost and marginal benefit curves for ice cream. As Ben & Jerry's increases production from 1 to 2 million gallons of ice cream,the

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.What is the opportunity cost of one chocolate bar if Sweet-tooth Land moves from point C to point D?

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

Using the production possibilities frontier model,unemployment is described as producing at a point

Comparative advantage is

Which of the following is NOT true concerning a society's production possibilities frontier (PPF)?

A country that must decrease production of one good in order to increase the production of another

Point Production of grain (tons) Production of cars (cars) A 0 30 B 2 28 C 4 24 D 6 18 E 8 10 F 10 0 -The table above lists six points on the production possibilities frontier for grain and cars.From this information you can conclude that production is inefficient if this economy produces

Increasing opportunity cost while moving along a production possibilities frontier is the result of

-In the figure above,moving from point B to point D

-In the above figure,which point represents an attainable but inefficient production point?

-In the figure above,Joe is producing at point A.Joe's opportunity cost of producing one shirt is

When the production possibilities frontier bows outward from the origin,

Any production point outside the production possibilities frontier is

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.A movement from ________ represents the greatest opportunity cost of increasing cola production.

The term "market" refers to

-In the figure above,if 4 million computers are produced per year then the ________ should be produced to achieve the allocatively efficient use of resources

Point Production of X Production of Y a 0 40 b 4 36 c 8 28 d 12 16 e 16 0 -Refer to the table above,which gives five points on a nation's PPF.The opportunity cost of increasing the production of Y from 16 to 36 units is a total of

Suppose that the government is trying to decide between allocating its resources to build more dams or to build more freeways.In terms of forgone dams,as more freeways are constructed,the marginal benefit of additional freeways ________ and the marginal cost of additional freeways ________.

A point inside a production possibilities frontier

If a country operates on its PPF,it achieves production efficiency.

-Employees at Bank of America are good at providing banking services and workers at Ben & Jerry's are good at making ice cream. The figure above shows the marginal cost and marginal benefit curves for ice cream. As Ben & Jerry's increases production from 1 to 2 million gallons of ice cream,the

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.What is the opportunity cost of one chocolate bar if Sweet-tooth Land moves from point C to point D?

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

Suppose that the government is trying to decide between allocating its resources to build more dams or to build more freeways.In terms of forgone dams,as more freeways are constructed,the marginal benefit of additional freeways and the marginal cost of additional freeways .