Exam 2: The Economic Problem

The marginal benefit of a good or service

The bowed-outward shape of a PPF

In one week Alice can produce 5 pairs of shoes or 4 bookshelves while Roger can produce 10 pairs of shoes or 6 bookshelves. Alice has ________ advantage in producing ________.

A president of the United States promises to produce more defense goods without any decreases in the production of other goods. This promise can be valid

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

-In the figure above, how can the economy represented by the production possibilities frontier move from point C to point F?

In March a factory used new technology to produce its output. Then in August a fire destroys half the factory. The new technology shifted the factory's PPF ________ and the fire shifted it ________.

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

-Omar and John can fix computers or write computer programs. The table above shows the number of computers they can fix and the lines of code they can write in a day. a) Who, if anyone, has the absolute advantage? b) Who has the comparative advantage in fixing computers? Why? c) Who has the comparative advantage in writing programs? Why?

-Refer to the production possibilities frontier in the figure above. Which production point indicates that resources are NOT fully utilized or are misallocated?

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

The principle of decreasing marginal benefit means that as the quantity of a good consumed

In one week Alice can produce 5 pairs of shoes or 4 bookshelves while Roger can produce 10 pairs of shoes or 6 bookshelves. Alice should specialize in the production of

-The above table shows production combinations on a country's production possibilities frontier. Which of the following points signifies efficient production?

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

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

A production point beyond the production possibilities frontier represents what?

Missouri can produce 10,000 tons of pecans per year or 5,000 tons of pears per year. Washington can produce 12,000 tons of pecans per year or 48,000 tons of pears per year. If these two states were to engage in trade, which of the following is TRUE?

In goods markets ________ and in factor markets ________.

Jane produces only corn and cloth. Taking account of her preferences for corn and cloth