Exam 2: The Economic Problem

The production possibilities frontier

-The above figure illustrates Mary's production possibilities frontier. If Mary wants to move from point d to point c, she must

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

Explain the connection between opportunity cost and the PPF.

Production points inside the PPF are

When the opportunity cost of producing more of a good is increasing, the marginal cost of producing more of the good is

-In the above figure, in order for this country to move from production possibilities frontier PPF? to PPF?, it might

"The United States is more productive in most activities than are most of other countries because it has an absolute advantage in the production of most goods and services. Therefore we should restrict international trade as it only benefits other countries at the expense of the United States." Comment on this statement.

Harry produces 2 balloon rides and 4 boat rides an hour. Harry could produce more balloon rides but to do so he must produce fewer boat rides. Harry is ________ his production possibilities frontier.

Suppose Joe can prepare 10 sandwiches or 5 pizzas in an hour and Beth can produce 12 sandwiches or 9 pizzas. Which of the following is TRUE?

Production possibilities -In the above table, the production of 3 pizzas and 80 cases of soda is

At one point along a PPF 40 tons of wheat are produced while 80 tons of rice are produced. At another point along the same PPF, 41 tons of wheat are produced while 70 tons of rice are produced. The opportunity cost of producing a ton of wheat between these points is ________ per ton of wheat.

The fact of increasing opportunity costs means that a production possibilities frontier will

-An economy produces at point a on the PPF shown in the above figure. A drought reduces the amount of wheat produced and the economy produces at point b. The opportunity cost of a unit of wheat ________.

Which of the following describes comparative advantage?

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?

Which of the following is NOT illustrated by a production possibilities frontier?

Because of the existence of comparative advantage, the total output of goods is higher when each producer

George and Michael can gain from exchange

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