Question 1

Economic growth

Accepted Answer

A)  leads to less consumption in the present and increased consumption in the future. 
B)  is free. 
C)  is the major reason we face scarcity. 
D)  allows us to increase our consumption in the present and in the future. 
A)  leads to less consumption in the present and increased consumption in the future. 
B)  is free. 
C)  is the major reason we face scarcity. 
D)  allows us to increase our consumption in the present and in the future.

Question 2

Are all points inside the production possibilities frontier unattainable?

Accepted Answer

No, all points within the prod

Question 3

Resource use is allocatively efficient when

Accepted Answer

A)  we produce the goods with the highest opportunity cost. 
B)  we produce the goods with the lowest opportunity cost. 
C)  we cannot produce more goods and services. 
D)  we produce the amount of the different goods we value most highly. 
A)  we produce the goods with the highest opportunity cost. 
B)  we produce the goods with the lowest opportunity cost. 
C)  we cannot produce more goods and services. 
D)  we produce the amount of the different goods we value most highly.

Question 4

A country that has a comparative advantage in producing capital goods will ________ a country that has a comparative advantage in consumption goods.

Accepted Answer

A)  reap all of the gains from trade when it trades with 
B)  grow slower than 
C)  reap fewer of the gains from trade when it trades with 
D)  specialize in producing capital goods and trade with 
A)  reap all of the gains from trade when it trades with 
B)  grow slower than 
C)  reap fewer of the gains from trade when it trades with 
D)  specialize in producing capital goods and trade with

Question 5

If two countries specialize in the production of goods in which they have a comparative advantage, they can experience gains from trade.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A)  shoes. 
B)  bookshelves. 
C)  either shoes or bookshelves. 
D)  neither shoes nor bookshelves. 
A)  shoes. 
B)  bookshelves. 
C)  either shoes or bookshelves. 
D)  neither shoes nor bookshelves.

Question 7

-The table above represents the marginal cost and marginal benefit associated with pizza (in terms of movies). What quantity of pizza should be produced if resources are to be used efficiently?

Accepted Answer

A)  5 pizzas 
B)  6 pizzas 
C)  7 pizzas 
D)  8 pizzas 
A)  5 pizzas 
B)  6 pizzas 
C)  7 pizzas 
D)  8 pizzas

Question 8

When a nation is producing the allocatively efficient quantity of a product, the marginal benefit of producing the good equals the marginal cost of producing that good.

Accepted Answer

A) True 
 B)False

Question 9

Two countries, Blue Violet and Sweet Pansy, produce only two goods: teapots and coffeepots. The table above gives their production possibilities. With specialization and trade, Sweet Pansy produces ________ and Blue Violet produces ________.

Accepted Answer

A)  150 coffeepots, 150 teapots 
B)  150 teapots, 75 coffeepots 
C)  150 teapots and 150 coffeepots, nothing 
D)  100 teapots and 25 coffeepots, 100 teapots and 50 coffeepots 
A)  150 coffeepots, 150 teapots 
B)  150 teapots, 75 coffeepots 
C)  150 teapots and 150 coffeepots, nothing 
D)  100 teapots and 25 coffeepots, 100 teapots and 50 coffeepots

Question 10

The production possibilities frontier shifts as

Accepted Answer

A)  tastes and preferences change. 
B)  the money supply grows or shrinks. 
C)  technology changes. 
D)  the unemployment rate changes. 
A)  tastes and preferences change. 
B)  the money supply grows or shrinks. 
C)  technology changes. 
D)  the unemployment rate changes.

Question 11

As we increase the production of computers, we find that we must give up larger and larger amounts of DVD players per computer.

Accepted Answer

A)  This situation illustrates increasing opportunity cost. 
B)  As a result, we should specialize in the production of DVD players. 
C)  The production possibilities frontier for computers and DVD players is a straight line. 
D)  DVD players will be more highly regarded by consumers than computers. 
A)  This situation illustrates increasing opportunity cost. 
B)  As a result, we should specialize in the production of DVD players. 
C)  The production possibilities frontier for computers and DVD players is a straight line. 
D)  DVD players will be more highly regarded by consumers than computers.

Question 12

Which of the following statements regarding the production possibilities frontier is TRUE?

Accepted Answer

A)  Points outside the frontier are attainable. 
B)  Points inside the frontier are attainable. 
C)  Points on the frontier are less efficient than points inside the frontier. 
D)  None of the above because all of the above statements are false. 
A)  Points outside the frontier are attainable. 
B)  Points inside the frontier are attainable. 
C)  Points on the frontier are less efficient than points inside the frontier. 
D)  None of the above because all of the above statements are false.

Question 13

Economic growth can be pictured in a production possibilities frontier diagram by

Accepted Answer

A)  making the production possibilities frontier more bowed out. 
B)  making the production possibilities frontier less bowed out. 
C)  shifting the production possibilities frontier outward. 
D)  shifting the production possibilities frontier inward. 
A)  making the production possibilities frontier more bowed out. 
B)  making the production possibilities frontier less bowed out. 
C)  shifting the production possibilities frontier outward. 
D)  shifting the production possibilities frontier inward.

Question 14

-The bowed outward shape of the production possibilities frontier in the above figure indicates that

Accepted Answer

A)  some resources are better suited for producing computers. 
B)  the opportunity cost of producing more computers decreases as more computers are produced. 
C)  computer technology is subject to the principle of decreasing costs. 
D)  All of the above answers are correct. 
A)  some resources are better suited for producing computers. 
B)  the opportunity cost of producing more computers decreases as more computers are produced. 
C)  computer technology is subject to the principle of decreasing costs. 
D)  All of the above answers are correct.

Question 15

-Agnes can produce either 1 unit of X or 1 unit of Y in an hour, while Brenda can produce either 2 units of X or 4 units of Y in an hour. There can be gains from exchange

Accepted Answer

A)  if Agnes specializes in the production of X and Brenda specializes in the production of Y. 
B)  if Agnes specializes in the production of Y and Brenda specializes in the production of X. 
C)  only if Agnes becomes faster at producing X. 
D)  only if Brenda becomes faster at producing X or Y. 
A)  if Agnes specializes in the production of X and Brenda specializes in the production of Y. 
B)  if Agnes specializes in the production of Y and Brenda specializes in the production of X. 
C)  only if Agnes becomes faster at producing X. 
D)  only if Brenda becomes faster at producing X or Y.

Question 16

When the production possibilities frontier is bowed outwards, the opportunity cost of producing more of one good

Accepted Answer

A)  increases in terms of the amount foregone of the other good. 
B)  decreases in terms of the amount foregone of the other good. 
C)  remains constant. 
D)  cannot be determined. 
A)  increases in terms of the amount foregone of the other good. 
B)  decreases in terms of the amount foregone of the other good. 
C)  remains constant. 
D)  cannot be determined.

Question 17

The production possibilities frontier is the boundary between those combination of goods and services that can be

Accepted Answer

A)  produced and those that can be consumed. 
B)  consumed domestically and those that can be consumed by foreigners. 
C)  produced and those that cannot be produced. 
D)  consumed and those that cannot be produced. 
A)  produced and those that can be consumed. 
B)  consumed domestically and those that can be consumed by foreigners. 
C)  produced and those that cannot be produced. 
D)  consumed and those that cannot be produced.

Question 18

-Victor currently produces nuts and bolts at point a in the figure. Victor's marginal cost of producing an additional nut is ________.

Accepted Answer

A)  1 bolt per nut 
B)  1/2 bolt per nut 
C)  8/6 bolts per nut 
D)  8 bolts per nut 
A)  1 bolt per nut 
B)  1/2 bolt per nut 
C)  8/6 bolts per nut 
D)  8 bolts per nut

Question 19

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

Accepted Answer

A)  makes her production possibilities frontier straighter. 
B)  makes her production possibilities frontier steeper. 
C)  makes her production possibilities frontier flatter. 
D)  does not affect her production possibilities frontier. 
A)  makes her production possibilities frontier straighter. 
B)  makes her production possibilities frontier steeper. 
C)  makes her production possibilities frontier flatter. 
D)  does not affect her production possibilities frontier.

Question 20

Country A Country B
  
-In the table above, country B is producing 4 units of X and 6 units of Y. For country B, the opportunity cost of producing an additional unit of X is

Accepted Answer

A)  4 units of Y per unit of X. 
B)  2 units of Y per unit of X. 
C)  3/2 units of Y per unit of X. 
D)  1 unit of Y per unit of X. 
A)  4 units of Y per unit of X. 
B)  2 units of Y per unit of X. 
C)  3/2 units of Y per unit of X. 
D)  1 unit of Y per unit of X.

Economic growth

Are all points inside the production possibilities frontier unattainable?

Resource use is allocatively efficient when

A country that has a comparative advantage in producing capital goods will ________ a country that has a comparative advantage in consumption goods.

If two countries specialize in the production of goods in which they have a comparative advantage, they can experience gains from trade.

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 table above represents the marginal cost and marginal benefit associated with pizza (in terms of movies). What quantity of pizza should be produced if resources are to be used efficiently?

When a nation is producing the allocatively efficient quantity of a product, the marginal benefit of producing the good equals the marginal cost of producing that good.

Two countries, Blue Violet and Sweet Pansy, produce only two goods: teapots and coffeepots. The table above gives their production possibilities. With specialization and trade, Sweet Pansy produces and Blue Violet produces .

The production possibilities frontier shifts as

As we increase the production of computers, we find that we must give up larger and larger amounts of DVD players per computer.

Which of the following statements regarding the production possibilities frontier is TRUE?

Economic growth can be pictured in a production possibilities frontier diagram by

-The bowed outward shape of the production possibilities frontier in the above figure indicates that

-Agnes can produce either 1 unit of X or 1 unit of Y in an hour, while Brenda can produce either 2 units of X or 4 units of Y in an hour. There can be gains from exchange

When the production possibilities frontier is bowed outwards, the opportunity cost of producing more of one good

The production possibilities frontier is the boundary between those combination of goods and services that can be

-Victor currently produces nuts and bolts at point a in the figure. Victor's marginal cost of producing an additional nut is ________.

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

Country A Country B -In the table above, country B is producing 4 units of X and 6 units of Y. For country B, the opportunity cost of producing an additional unit of X is

What Is Economics?

Demand and Supply

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 2: The Economic Problem

Economic growth

Are all points inside the production possibilities frontier unattainable?

Resource use is allocatively efficient when

A country that has a comparative advantage in producing capital goods will ________ a country that has a comparative advantage in consumption goods.

If two countries specialize in the production of goods in which they have a comparative advantage, they can experience gains from trade.

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 table above represents the marginal cost and marginal benefit associated with pizza (in terms of movies). What quantity of pizza should be produced if resources are to be used efficiently?

When a nation is producing the allocatively efficient quantity of a product, the marginal benefit of producing the good equals the marginal cost of producing that good.

Two countries, Blue Violet and Sweet Pansy, produce only two goods: teapots and coffeepots. The table above gives their production possibilities. With specialization and trade, Sweet Pansy produces ________ and Blue Violet produces ________.

The production possibilities frontier shifts as

As we increase the production of computers, we find that we must give up larger and larger amounts of DVD players per computer.

Which of the following statements regarding the production possibilities frontier is TRUE?

Economic growth can be pictured in a production possibilities frontier diagram by

-The bowed outward shape of the production possibilities frontier in the above figure indicates that

-Agnes can produce either 1 unit of X or 1 unit of Y in an hour, while Brenda can produce either 2 units of X or 4 units of Y in an hour. There can be gains from exchange

When the production possibilities frontier is bowed outwards, the opportunity cost of producing more of one good

The production possibilities frontier is the boundary between those combination of goods and services that can be

-Victor currently produces nuts and bolts at point a in the figure. Victor's marginal cost of producing an additional nut is ________.

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

Country A Country B -In the table above, country B is producing 4 units of X and 6 units of Y. For country B, the opportunity cost of producing an additional unit of X is

What Is Economics?

Demand and Supply

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Two countries, Blue Violet and Sweet Pansy, produce only two goods: teapots and coffeepots. The table above gives their production possibilities. With specialization and trade, Sweet Pansy produces and Blue Violet produces .