Exam 2: The Economic Problem

-Refer to the production possibilities frontier in the figure above. Production point ________ represents an ________ production point.

Consider a PPF for tapes and soda. If the opportunity cost of a tape increases as the quantity of tapes produced increases and also the opportunity cost of a soda increases as the quantity of soda produced increases, then the PPF between the two goods will be

An increase in the nation's capital stock will

The marginal benefit from a good is the amount a person is willing to pay for

A reduction in the amount of unemployment

The more we have of a good or service, the smaller is its marginal benefit and the less we are willing to pay for an additional unit of it.

-Anna and Maria produce shirts and ties. The figure above shows Anna's PPF and Maria's PPF. Anna and Maria can achieve the gains from trade if Anna produces ________ and Maria produces ________.

Considering a PPF with health care services on the vertical axis and other goods and services on the horizontal axis, the increasing production of health care services in the United States as a result of the aging population represents

-The above table shows the number of pencils or pens that could be produced by Don and Bob in an hour. This schedule shows that

Production efficiency occurs when production ________.

As a country that has a bowed-out production possibilities frontier produces more of one good, the opportunity cost of a unit of that good ________.

When we choose a particular option, we must give up alternative options. The highest-valued alternative forgone is the ________ of the option chosen.

We have achieved production efficiency if we can produce more of one good without producing less of some other good.

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

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 one computer in an hour. Germany wishes to purchase computers from the United States in exchange for cameras. What is the maximum number of cameras per computer that Germany would be willing to pay the United States?

Country A Country B -In the table above, country A is producing 4 units of X and 8 units of Y and country B is producing 4 units of X and 6 units of Y. Regarding the production of good X

-The opportunity cost of moving from point a to point b in the above figure is ________.

As long as technology increases, economic growth is free.

Suppose the United States discovers a way to produce clean nuclear fuel. The effect of this discovery would be to

While producing on the production possibilities frontier, if additional units of a good could be produced at a constant opportunity cost, the production possibilities frontier would be