Question 1

An advance in technology commonly refers to the ability to produce

Accepted Answer

A)  the same output with a smaller quantity of resources. 
B)  more output with a fixed quantity of resources. 
C)  more output with a greater quantity of resources. 
D)  both a and b 
E)  both b and c 
A)  the same output with a smaller quantity of resources. 
B)  more output with a fixed quantity of resources. 
C)  more output with a greater quantity of resources. 
D)  both a and b 
E)  both b and c

Question 2

Country X has a high unemployment rate.It follows that country X is operating

Accepted Answer

A)  beyond its production possibilities frontier (PPF). 
B)  on its PPF. 
C)  inside (below)its PPF. 
D)  at a productive efficient point. 
E)  b and d 
A)  beyond its production possibilities frontier (PPF). 
B)  on its PPF. 
C)  inside (below)its PPF. 
D)  at a productive efficient point. 
E)  b and d

Question 3

-Refer to Exhibit 2-4.As more fax machines are produced,the opportunity cost of producing them

Accepted Answer

A)  increases. 
B)  decreases. 
C)  remains constant. 
D)  first decreases and then increases. 
A)  increases. 
B)  decreases. 
C)  remains constant. 
D)  first decreases and then increases.

Question 4

When opportunity costs are constant,the PPF will be a straight line.

Accepted Answer

A) True 
 B)False

Question 5

If increasingly more units of good Y must be given up as each successive unit of good X is produced,then the PPF for these two goods is

Accepted Answer

A)  a downward-sloping straight line. 
B)  circular. 
C)  an upward-sloping curve. 
D)  a downward-sloping curve that is bowed outward. 
E)  a downward-sloping curve that is bowed inward. 
A)  a downward-sloping straight line. 
B)  circular. 
C)  an upward-sloping curve. 
D)  a downward-sloping curve that is bowed outward. 
E)  a downward-sloping curve that is bowed inward.

Question 6

A decrease in the quantity of resources

Accepted Answer

A)  shifts the PPF leftward. 
B)  shifts the PPF rightward. 
C)  moves the economy up a given PPF. 
D)  moves the economy down a given PPF. 
A)  shifts the PPF leftward. 
B)  shifts the PPF rightward. 
C)  moves the economy up a given PPF. 
D)  moves the economy down a given PPF.

Question 7

If the PPF for two goods is a downward-sloping straight line,the resources used to produce those goods are equally well-suited to the production of both goods.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following statements is true?

Accepted Answer

A)  Productive inefficiency implies that it is possible to produce more of one good and no less of another,but only if additional resources are made available. 
B)  Productive efficiency implies that it is possible to produce more of one good and no less of another,even without additional resources. 
C)  Productive inefficiency implies that it is impossible to produce more of one good and no less of another. 
D)  Productive inefficiency implies that it is possible to produce more of one good and no less of another,even without additional resources. 
A)  Productive inefficiency implies that it is possible to produce more of one good and no less of another,but only if additional resources are made available. 
B)  Productive efficiency implies that it is possible to produce more of one good and no less of another,even without additional resources. 
C)  Productive inefficiency implies that it is impossible to produce more of one good and no less of another. 
D)  Productive inefficiency implies that it is possible to produce more of one good and no less of another,even without additional resources.

Question 9

-Refer to Exhibit 2-3.If PPF1 is the relevant production possibilities frontier,a shift to PPF2 may depict

Accepted Answer

A)  economic growth. 
B)  an increase in resources. 
C)  an increase in technology. 
D)  both b and c 
E)  all of the above 
A)  economic growth. 
B)  an increase in resources. 
C)  an increase in technology. 
D)  both b and c 
E)  all of the above

Question 10

-Refer to Exhibit 2-1.Scarcity exists

Accepted Answer

A)  at point C but not at point A. 
B)  neither at point C nor at point A. 
C)  at both point C and at point A. 
D)  at point A but not at point C. 
A)  at point C but not at point A. 
B)  neither at point C nor at point A. 
C)  at both point C and at point A. 
D)  at point A but not at point C.

Question 11

-Refer to Exhibit 2-4.This economy is productive

Accepted Answer

A)  efficient,if it operates at point B or C. 
B)  efficient,if it operates at point A or D. 
C)  inefficient,if it operates at point A or D. 
D)  inefficient regardless of the particular point. 
E)  both a and b 
A)  efficient,if it operates at point B or C. 
B)  efficient,if it operates at point A or D. 
C)  inefficient,if it operates at point A or D. 
D)  inefficient regardless of the particular point. 
E)  both a and b

Question 12

-Refer to Exhibit 2-1.The PPF illustrates

Accepted Answer

A)  constant opportunity costs between guns and butter. 
B)  that guns are more important than butter. 
C)  increasing opportunity costs between guns and butter. 
D)  the opportunity cost of one unit of guns is four units of butter. 
E)  none of the above 
A)  constant opportunity costs between guns and butter. 
B)  that guns are more important than butter. 
C)  increasing opportunity costs between guns and butter. 
D)  the opportunity cost of one unit of guns is four units of butter. 
E)  none of the above

Question 13

-Refer to Exhibit 2-9.For Alex,the opportunity cost of producing one unit of good A is ____________ unit(s)of good B.

Accepted Answer

A)  3.00 
B)  0.33 
C)  0.75 
D)  1.33 
A)  3.00 
B)  0.33 
C)  0.75 
D)  1.33

Question 14

Using your own words,describe the law of increasing opportunity costs.Be sure to explain why this phenomenon occurs and how it helps to contribute to the shape of the production possibilities frontier.

Accepted Answer

People (and other resources)have varying

Question 15

A PPF is a straight line as a result of

Accepted Answer

A)  constant opportunity costs. 
B)  increasing opportunity costs. 
C)  decreasing opportunity costs. 
D)  scarcity. 
E)  choice. 
A)  constant opportunity costs. 
B)  increasing opportunity costs. 
C)  decreasing opportunity costs. 
D)  scarcity. 
E)  choice.

Question 16

-Refer to Exhibit 2-6.Which graph best depicts the consequence of a large-scale natural disaster?

Accepted Answer

A)  (1) 
B)  (2) 
C)  (3) 
D)  (4) 
E)  none of the above 
A)  (1) 
B)  (2) 
C)  (3) 
D)  (4) 
E)  none of the above

Question 17

-Refer to Exhibit 2-7.Which of the following statements is true?

Accepted Answer

A)  Points B and D are more efficient than points A and C. 
B)  If the economy's PPF is represented by PPF1,points A and B are productive efficient,while C and D are unattainable. 
C)  If the economy's PPF is represented by PPF2,points C and D are productive efficient,while A and B are unattainable. 
D)  both a and c 
A)  Points B and D are more efficient than points A and C. 
B)  If the economy's PPF is represented by PPF1,points A and B are productive efficient,while C and D are unattainable. 
C)  If the economy's PPF is represented by PPF2,points C and D are productive efficient,while A and B are unattainable. 
D)  both a and c

Question 18

Consider two points on the PPF: point A,at which there are 50 apples and 40 pears,and point B,at which there are 46 apples and 41 pears.If the economy is currently at point A,the opportunity cost of moving to point B is

Accepted Answer

A)  1 pear. 
B)  4 apples. 
C)  3 apples. 
D)  41 pears. 
A)  1 pear. 
B)  4 apples. 
C)  3 apples. 
D)  41 pears.

Question 19

It is possible through trade for a country to consume a combination of goods that lies beyond its production possibilities frontier.

Accepted Answer

A) True 
 B)False

Question 20

An economy can produce either of these two combinations of goods X and Y: 1,000X and 0Y or 400Y and 0X.Furthermore,the opportunity cost between the two goods is always constant.Which of the following combinations of the two goods,X and Y,lies on the economy's production possibilities frontier?

Accepted Answer

A)  700 units of X and 280 units of Y 
B)  600 units of X and 250 units of Y 
C)  400 units of X and 150 units of Y 
D)  90 units of X and 360 units of Y 
E)  300 units of X and 280 units of Y 
A)  700 units of X and 280 units of Y 
B)  600 units of X and 250 units of Y 
C)  400 units of X and 150 units of Y 
D)  90 units of X and 360 units of Y 
E)  300 units of X and 280 units of Y

Exam 2: Production Possibilities Frontier Framework

An advance in technology commonly refers to the ability to produce

Country X has a high unemployment rate.It follows that country X is operating

-Refer to Exhibit 2-4.As more fax machines are produced,the opportunity cost of producing them

When opportunity costs are constant,the PPF will be a straight line.

If increasingly more units of good Y must be given up as each successive unit of good X is produced,then the PPF for these two goods is

A decrease in the quantity of resources

If the PPF for two goods is a downward-sloping straight line,the resources used to produce those goods are equally well-suited to the production of both goods.

Which of the following statements is true?

-Refer to Exhibit 2-3.If PPF1 is the relevant production possibilities frontier,a shift to PPF2 may depict

-Refer to Exhibit 2-1.Scarcity exists

-Refer to Exhibit 2-4.This economy is productive

-Refer to Exhibit 2-1.The PPF illustrates

-Refer to Exhibit 2-9.For Alex,the opportunity cost of producing one unit of good A is ____________ unit(s)of good B.

Using your own words,describe the law of increasing opportunity costs.Be sure to explain why this phenomenon occurs and how it helps to contribute to the shape of the production possibilities frontier.

A PPF is a straight line as a result of

-Refer to Exhibit 2-6.Which graph best depicts the consequence of a large-scale natural disaster?

-Refer to Exhibit 2-7.Which of the following statements is true?

Consider two points on the PPF: point A,at which there are 50 apples and 40 pears,and point B,at which there are 46 apples and 41 pears.If the economy is currently at point A,the opportunity cost of moving to point B is

It is possible through trade for a country to consume a combination of goods that lies beyond its production possibilities frontier.

An economy can produce either of these two combinations of goods X and Y: 1,000X and 0Y or 400Y and 0X.Furthermore,the opportunity cost between the two goods is always constant.Which of the following combinations of the two goods,X and Y,lies on the economy's production possibilities frontier?

What Economics Is About

Supply and Demand: Theory

Prices: Free,controlled,and Relative

Supply,demand,and Price: Applications

Elasticity

Consumer Choice: Maximizing Utility and Behavioral Economics

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition, oligopoly, and Game Theory

Government and Product Markets: Antitrust and Regulation

Factor Markets: With Emphasis on the Labor Market

Wages,union,and Labor

The Distribution of Income and Poverty

Interest,rent,and Profit

Market Failure: Externalities, public Goods, and Asymmetric Information

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

The Economic Case for and Against Government: Five Topics Considered

Stocks,bonds,futures,and Options

Stocks,bonds,futures,and Options

Filters

-Refer to Exhibit 2-3.If PPF₁ is the relevant production possibilities frontier,a shift to PPF₂ may depict