Question 1

-In the above figure, the curve labeled a is the ________ curve and the curve labeled b is the ________ curve.

Accepted Answer

A)  marginal cost; marginal benefit 
B)  marginal cost; trade line 
C)  marginal benefit; trade line 
D)  production possibilities frontier; trade line 
A)  marginal cost; marginal benefit 
B)  marginal cost; trade line 
C)  marginal benefit; trade line 
D)  production possibilities frontier; trade line

Question 2

Technological change

Accepted Answer

A)  generates economic growth. 
B)  shifts the PPF leftward. 
C)  creates inefficiency. 
D)  Both answers A and C are correct. 
A)  generates economic growth. 
B)  shifts the PPF leftward. 
C)  creates inefficiency. 
D)  Both answers A and C are correct.

Question 3

-Refer to the production possibilities frontier in the figure above. Which production point is unattainable?

Accepted Answer

A)  point a 
B)  point b 
C)  point c 
D)  point e 
A)  point a 
B)  point b 
C)  point c 
D)  point e

Question 4

One of the largest categories of exports from the United States is now pop culture: movies, music, TV programming, and videos. A direct conclusion from this information is that, compared to other countries, the United States has

Accepted Answer

A)  lower wages for producers of pop culture. 
B)  higher wages for producers of pop culture. 
C)  an absolute advantage in producing pop culture. 
D)  a comparative advantage in producing pop culture. 
A)  lower wages for producers of pop culture. 
B)  higher wages for producers of pop culture. 
C)  an absolute advantage in producing pop culture. 
D)  a comparative advantage in producing pop culture.

Question 5

-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 6

-Leisure Land produces only sun screen and camel rides. The table shows the marginal benefit and marginal cost schedules for sun screen and camel rides. The allocatively efficient number of camel rides is ________.

Accepted Answer

A)  1 ride per day because the marginal benefit exceeds the marginal cost by as much as possible 
B)  2 rides per day 
C)  4 rides per day 
D)  6 rides per day because that is the maximum number of rides 
A)  1 ride per day because the marginal benefit exceeds the marginal cost by as much as possible 
B)  2 rides per day 
C)  4 rides per day 
D)  6 rides per day because that is the maximum number of rides

Question 7

Some time ago the government of China required many highly skilled technicians and scientists to engage in unskilled agricultural labor in order to develop "proper social attitudes." This policy probably caused China to produce

Accepted Answer

A)  at an inappropriate point along its production possibilities frontier. 
B)  outside its production possibilities frontier with respect to food, but inside with respect to high-technology goods. 
C)  inside its production possibilities frontier with respect to food, but outside with respect to high-technology goods. 
D)  inside its production possibilities frontier. 
A)  at an inappropriate point along its production possibilities frontier. 
B)  outside its production possibilities frontier with respect to food, but inside with respect to high-technology goods. 
C)  inside its production possibilities frontier with respect to food, but outside with respect to high-technology goods. 
D)  inside its production possibilities frontier.

Question 8

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 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

Points outside the production possibilities frontier illustrate production points that cannot be attained.

Accepted Answer

A) True 
 B)False

Question 11

-In the figure above, at the allocatively efficient level of computer production consumers are willing to give up

Accepted Answer

A)  0 televisions per computer. 
B)  between 0 and 3 televisions per computer. 
C)  3 televisions per computer. 
D)  more than 3 televisions per computer. 
A)  0 televisions per computer. 
B)  between 0 and 3 televisions per computer. 
C)  3 televisions per computer. 
D)  more than 3 televisions per computer.

Question 12

-In the figure above, which of the following movements has the largest opportunity cost?

Accepted Answer

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

Question 13

When we cannot produce more of any good without giving up some other good that we value more highly, we have achieved

Accepted Answer

A)  production. 
B)  equity. 
C)  allocative efficiency. 
D)  the production point where the marginal benefit exceeds the marginal cost by as much as possible. 
A)  production. 
B)  equity. 
C)  allocative efficiency. 
D)  the production point where the marginal benefit exceeds the marginal cost by as much as possible.

Question 14

A marginal cost curve

Accepted Answer

A)  is upward sloping. 
B)  shows that as more of a good is produced, opportunity costs of producing another unit increase. 
C)  is bowed inward so that its slope can become negative. 
D)  Both answers A and B are correct. 
A)  is upward sloping. 
B)  shows that as more of a good is produced, opportunity costs of producing another unit increase. 
C)  is bowed inward so that its slope can become negative. 
D)  Both answers A and B are correct.

Question 15

Jake takes 40 minutes to fry a chicken and 10 minutes to toast a slice of bread. His brother Elwood takes 60 minutes to fry a chicken and 4 minutes to toast a slice of bread. Calculate each brother's opportunity cost. Who has a comparative advantage in which activity? Explain. Will the brothers gain if they specialize?

Accepted Answer

Jake can spend an hour to fry 1.5 chicke

Question 16

-The figure above shows a nation's production possibilities frontier for apples and oranges.
a) What combination of goods is represented by point A?
b) What combination of goods is represented by point B?
c) Which point represents an unattainable combination of goods?

Accepted Answer

a) 3 million bushels of apples

Question 17

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 18

Suppose that a typical German factory can produce 20 cameras or 1 computer in an hour, and that a typical American factory can produce 10 cameras or 1 computer in an hour. The opportunity cost of 20 cameras in terms of computers in Germany is

Accepted Answer

A)  10 computers per camera. 
B)  2 computers per camera. 
C)  1 computer per camera. 
D)  1/20 of a computer per camera. 
A)  10 computers per camera. 
B)  2 computers per camera. 
C)  1 computer per camera. 
D)  1/20 of a computer per camera.

Question 19

The production possibilities frontier separates ________.

Accepted Answer

A)  the goods and services that people want from those that they do not want 
B)  the types of goods that can be attained from those that can't be attained 
C)  the quantities of goods and services that can be produced from those that cannot be produced 
D)  the combinations of goods that people value and those that they don't 
A)  the goods and services that people want from those that they do not want 
B)  the types of goods that can be attained from those that can't be attained 
C)  the quantities of goods and services that can be produced from those that cannot be produced 
D)  the combinations of goods that people value and those that they don't

Question 20

Economic growth comes from ________.

Accepted Answer

A)  people willing to increase their skills in which case, economic growth is free 
B)  producing more goods than people want to consume 
C)  capital accumulation and the avoidance of opportunity cost 
D)  capital accumulation and technological advance 
A)  people willing to increase their skills in which case, economic growth is free 
B)  producing more goods than people want to consume 
C)  capital accumulation and the avoidance of opportunity cost 
D)  capital accumulation and technological advance

-In the above figure, the curve labeled a is the curve and the curve labeled b is the curve.

Technological change

-Refer to the production possibilities frontier in the figure above. Which production point is unattainable?

One of the largest categories of exports from the United States is now pop culture: movies, music, TV programming, and videos. A direct conclusion from this information is that, compared to other countries, the United States has

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

-Leisure Land produces only sun screen and camel rides. The table shows the marginal benefit and marginal cost schedules for sun screen and camel rides. The allocatively efficient number of camel rides is ________.

Some time ago the government of China required many highly skilled technicians and scientists to engage in unskilled agricultural labor in order to develop "proper social attitudes." This policy probably caused China to produce

When the production possibilities frontier bows outward from the origin

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

Points outside the production possibilities frontier illustrate production points that cannot be attained.

-In the figure above, at the allocatively efficient level of computer production consumers are willing to give up

-In the figure above, which of the following movements has the largest opportunity cost?

When we cannot produce more of any good without giving up some other good that we value more highly, we have achieved

A marginal cost curve

-The figure above shows a nation's production possibilities frontier for apples and oranges. a) What combination of goods is represented by point A? b) What combination of goods is represented by point B? c) Which point represents an unattainable combination of goods?

Economic growth can be represented by

Suppose that a typical German factory can produce 20 cameras or 1 computer in an hour, and that a typical American factory can produce 10 cameras or 1 computer in an hour. The opportunity cost of 20 cameras in terms of computers in Germany is

The production possibilities frontier separates ________.

Economic growth comes from ________.

What Is Economics

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 2: The Economic Problem

-In the above figure, the curve labeled a is the ________ curve and the curve labeled b is the ________ curve.

Technological change

-Refer to the production possibilities frontier in the figure above. Which production point is unattainable?

One of the largest categories of exports from the United States is now pop culture: movies, music, TV programming, and videos. A direct conclusion from this information is that, compared to other countries, the United States has

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

-Leisure Land produces only sun screen and camel rides. The table shows the marginal benefit and marginal cost schedules for sun screen and camel rides. The allocatively efficient number of camel rides is ________.

Some time ago the government of China required many highly skilled technicians and scientists to engage in unskilled agricultural labor in order to develop "proper social attitudes." This policy probably caused China to produce

When the production possibilities frontier bows outward from the origin

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

Points outside the production possibilities frontier illustrate production points that cannot be attained.

-In the figure above, at the allocatively efficient level of computer production consumers are willing to give up

-In the figure above, which of the following movements has the largest opportunity cost?

When we cannot produce more of any good without giving up some other good that we value more highly, we have achieved

A marginal cost curve

-The figure above shows a nation's production possibilities frontier for apples and oranges. a) What combination of goods is represented by point A? b) What combination of goods is represented by point B? c) Which point represents an unattainable combination of goods?

Economic growth can be represented by

Suppose that a typical German factory can produce 20 cameras or 1 computer in an hour, and that a typical American factory can produce 10 cameras or 1 computer in an hour. The opportunity cost of 20 cameras in terms of computers in Germany is

The production possibilities frontier separates ________.

Economic growth comes from ________.

What Is Economics

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

-In the above figure, the curve labeled a is the curve and the curve labeled b is the curve.