Exam 2: The Economic Problem

-In the production possibilities frontier depicted in the figure above,which of the following combinations of hats and bananas is unattainable?

When resources are assigned to inappropriate tasks,that is,tasks for which they are not the best match,the result will be producing at a point

-The figure above shows Roger's production possibilities frontier.Point a is an ________ point and at that point production is ________.

Marginal benefit is the benefit ________ one more unit of the good and ________ of the good increases.

Increasing opportunity cost implies that

If the United States can increase its production of automobiles without decreasing its production of any other good,the United States must have been producing at a point

Marginal benefit curves slope

When producing goods and services along a PPF,tradeoffs exist because

Betty and Ann live on a desert island.With a day's labor,Ann can produce 6 fish or 4 coconuts; Betty can produce 3 fish or 1 coconut.Betty's opportunity cost of producing 1 fish is ________,and she should specialize in the production of ________.

A country that has an absolute advantage in producing all goods will ________.

-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. A movement from point a to point b reflects

Production points inside the PPF are

Which of the following describes comparative advantage?

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.What is the opportunity cost of producing the 5th ton of grain?

-In the production possibilities frontier depicted in the figure above,what is the opportunity cost of increasing the production of bananas from two million pounds to three million pounds?

On the vertical axis,the production possibilities frontier shows ________; on the horizontal axis,the production possibilities frontier shows ________.

-As output moves from point a to point b to point c along the PPF in the above figure,the opportunity cost of one more unit of good X

Blue Violet's Orange Rose'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) 75 50 25 0 \& \& \& \& Coffeepots Teapots (number per week) 0 50 100 150 -Two countries,Blue Violet and Orange Rose,produce only two goods: teapots and coffeepots.The table above gives their production possibilities.________ has a comparative advantage in teapots and ________ has a comparative advantage in coffeepots.

-The figure above shows the production possibilities frontiers for four nations that have identical production possibilities frontiers in the present.The one that will grow most rapidly in the future is most likely to be producing at point

Claire and Dag are farmers who produce beef and corn.In a year,Claire can produce 16 tons of beef or 40 bushels of corn,while Dag can produce 5 tons of beef or 25 bushels of corn.The opportunity cost of producing a ton of beef is