Question 1

-Refer to Exhibit 2-1.The opportunity cost of moving from point B to A is

Accepted Answer

A)  10,000 units of butter. 
B)  20,000 units of butter. 
C)  50,000 units of guns. 
D)  the maximum amount of butter that can be produced with available resources. 
A)  10,000 units of butter. 
B)  20,000 units of butter. 
C)  50,000 units of guns. 
D)  the maximum amount of butter that can be produced with available resources.

Question 2

-Refer to Exhibit 2-7.For which of the following is the statement "In order to get more military goods,we have to forfeit some civilian goods" true?

Accepted Answer

A)  a movement from A to C 
B)  a movement from B to D 
C)  a movement from F to D 
D)  a movement from B to A 
E)  none of the above 
A)  a movement from A to C 
B)  a movement from B to D 
C)  a movement from F to D 
D)  a movement from B to A 
E)  none of the above

Question 3

If there is an increase in the amount of good B foregone as every additional unit of good A is produced,the PPF between goods A and B would

Accepted Answer

A)  be a straight line. 
B)  be a bowed-outward curve. 
C)  be a bowed-inward curve. 
D)  not exist. 
A)  be a straight line. 
B)  be a bowed-outward curve. 
C)  be a bowed-inward curve. 
D)  not exist.

Question 4

-Refer to Exhibit 2-5.Which of the following labeled points are productive efficient?

Accepted Answer

A)  A,B,C,D,and E 
B)  B,C and D only 
C)  C only 
D)  All of the points are productive efficient. 
E)  None of the points are productive efficient. 
A)  A,B,C,D,and E 
B)  B,C and D only 
C)  C only 
D)  All of the points are productive efficient. 
E)  None of the points are productive efficient.

Question 5

The point where the PPF intersects the horizontal axis is

Accepted Answer

A)  unattainable. 
B)  attainable and productive efficient. 
C)  attainable but productive inefficient. 
D)  attainable and neither productive efficient nor productive inefficient. 
A)  unattainable. 
B)  attainable and productive efficient. 
C)  attainable but productive inefficient. 
D)  attainable and neither productive efficient nor productive inefficient.

Question 6

Consider two straight-line PPFs.They have the same vertical intercept,but curve I is flatter than curve II.The opportunity cost of producing the good on the horizontal axis

Accepted Answer

A)  is greater along curve I. 
B)  is greater along curve II. 
C)  is the same along both curves. 
D)  cannot be compared for the two curves without more information. 
A)  is greater along curve I. 
B)  is greater along curve II. 
C)  is the same along both curves. 
D)  cannot be compared for the two curves without more information.

Question 7

-Refer to Exhibit 2-3.If PPF1 is the relevant production possibilities frontier,society may move to PPF2 as a result of

Accepted Answer

A)  an increase in resources. 
B)  a decrease in resources. 
C)  an increase in technology. 
D)  both a and c 
E)  both b and c 
A)  an increase in resources. 
B)  a decrease in resources. 
C)  an increase in technology. 
D)  both a and c 
E)  both b and c

Question 8

For each additional lamp produced,a constant opportunity cost is incurred in terms of bookshelves.This means that

Accepted Answer

A)  it takes more resources to produce a lamp than a bookshelf. 
B)  it takes fewer resources to produce a lamp than a bookshelf. 
C)  for every lamp produced,a constant number of bookshelves is forfeited. 
D)  for every lamp produced,a different number of bookshelves is forfeited. 
A)  it takes more resources to produce a lamp than a bookshelf. 
B)  it takes fewer resources to produce a lamp than a bookshelf. 
C)  for every lamp produced,a constant number of bookshelves is forfeited. 
D)  for every lamp produced,a different number of bookshelves is forfeited.

Question 9

Productive efficiency implies

Accepted Answer

A)  the possibility of gains in one area without losses in another. 
B)  that more output has been produced. 
C)  the impossibility of gains in one area without losses in another. 
D)  that prices are stable. 
E)  c and d 
A)  the possibility of gains in one area without losses in another. 
B)  that more output has been produced. 
C)  the impossibility of gains in one area without losses in another. 
D)  that prices are stable. 
E)  c and d

Question 10

In a situation where two goods can be produced by two different people,it is possible for one person to have a comparative advantage in the production of both goods and the other person to have the comparative advantage in the production of neither good.

Accepted Answer

A) True 
 B)False

Question 11

If the economy is currently producing at a point on its production possibilities frontier (PPF),the economy is

Accepted Answer

A)  productive inefficient. 
B)  operating with no unemployed resources. 
C)  productive efficient. 
D)  b and c 
E)  none of the above 
A)  productive inefficient. 
B)  operating with no unemployed resources. 
C)  productive efficient. 
D)  b and c 
E)  none of the above

Question 12

Suppose Andrea is taking just two courses and is at a point on her PPF of grades for those two courses.Now this PPF shifts inward and Andrea moves to a point on the new PPF.Which of the following would be impossible after her PPF has shifted inward compared to before the PPF shifted?

Accepted Answer

A)  both of her grades to fall 
B)  both of her grades to rise 
C)  one of her grades to rise and the other grade to fall 
D)  one of her grades to fall while the other grade stays constant 
A)  both of her grades to fall 
B)  both of her grades to rise 
C)  one of her grades to rise and the other grade to fall 
D)  one of her grades to fall while the other grade stays constant

Question 13

Within the production possibilities frontier (PPF)framework,choice is depicted by the

Accepted Answer

A)  PPF itself. 
B)  PPF being bowed outward. 
C)  need to select among the points making up the PPF. 
D)  straight-line PPF. 
A)  PPF itself. 
B)  PPF being bowed outward. 
C)  need to select among the points making up the PPF. 
D)  straight-line PPF.

Question 14

With a constant opportunity cost between goods A and B,the PPF for goods A and B would

Accepted Answer

A)  be a straight line. 
B)  be a bowed-outward line. 
C)  be a bowed-inward line. 
D)  not exist. 
A)  be a straight line. 
B)  be a bowed-outward line. 
C)  be a bowed-inward line. 
D)  not exist.

Question 15

Currently an economy is producing at a point on its production possibilities frontier for goods X and Y.It is producing 100 units of good X and the opportunity cost of producing 1X is 3Y.If good X is produced at increasing opportunity costs,then when the economy produces 120 units of good X (on the same PPF)the opportunity cost of producing 1X could be ______Y.

Accepted Answer

A)  4 
B)  2.5 
C)  2 
D)  1 
E)  all of the above 
A)  4 
B)  2.5 
C)  2 
D)  1 
E)  all of the above

Question 16

-Refer to Exhibit 2-4.The opportunity cost of moving from point A to point B is

Accepted Answer

A)  60,000 copiers. 
B)  40,000 copiers. 
C)  20,000 copiers. 
D)  20,000 fax machines. 
E)  40,000 fax machines. 
A)  60,000 copiers. 
B)  40,000 copiers. 
C)  20,000 copiers. 
D)  20,000 fax machines. 
E)  40,000 fax machines.

Question 17

With respect to a PPF for goods X and Y,productive efficiency implies that in order to produce more of good X there will be a reduction in production of good Y.

Accepted Answer

A) True 
 B)False

Question 18

-Refer to Exhibit 2-1.If the economy is at point C,it follows that

Accepted Answer

A)  more guns and more butter could be produced with available resources than are currently being produced. 
B)  only more guns could be produced with available resources than are currently being produced. 
C)  only more butter can be produced with available resources than are currently being produced. 
D)  C is an unattainable point. 
A)  more guns and more butter could be produced with available resources than are currently being produced. 
B)  only more guns could be produced with available resources than are currently being produced. 
C)  only more butter can be produced with available resources than are currently being produced. 
D)  C is an unattainable point.

Question 19

What is the reason for the law of increasing opportunity costs?

Accepted Answer

A)  There is no reason: it is just one of the laws of economics. 
B)  Resources have varying abilities and those with lower opportunity costs of producing a good will be used to produce it before resources with higher opportunity costs produce it. 
C)  The price of a good rises as more of it is demanded. 
D)  As more of a good is produced,the taxes applied to the production of the good rise. 
E)  c and d 
A)  There is no reason: it is just one of the laws of economics. 
B)  Resources have varying abilities and those with lower opportunity costs of producing a good will be used to produce it before resources with higher opportunity costs produce it. 
C)  The price of a good rises as more of it is demanded. 
D)  As more of a good is produced,the taxes applied to the production of the good rise. 
E)  c and d

Question 20

-Refer to Exhibit 2-9.Who has the comparative advantage in the production of good A?

Accepted Answer

A)  Alex 
B)  Adam 
C)  Both Alex and Adam 
D)  Neither Alex nor Adam 
A)  Alex 
B)  Adam 
C)  Both Alex and Adam 
D)  Neither Alex nor Adam

Exam 2: Production Possibilities Frontier Framework

-Refer to Exhibit 2-1.The opportunity cost of moving from point B to A is

-Refer to Exhibit 2-7.For which of the following is the statement "In order to get more military goods,we have to forfeit some civilian goods" true?

If there is an increase in the amount of good B foregone as every additional unit of good A is produced,the PPF between goods A and B would

-Refer to Exhibit 2-5.Which of the following labeled points are productive efficient?

The point where the PPF intersects the horizontal axis is

Consider two straight-line PPFs.They have the same vertical intercept,but curve I is flatter than curve II.The opportunity cost of producing the good on the horizontal axis

-Refer to Exhibit 2-3.If PPF1 is the relevant production possibilities frontier,society may move to PPF2 as a result of

For each additional lamp produced,a constant opportunity cost is incurred in terms of bookshelves.This means that

Productive efficiency implies

In a situation where two goods can be produced by two different people,it is possible for one person to have a comparative advantage in the production of both goods and the other person to have the comparative advantage in the production of neither good.

If the economy is currently producing at a point on its production possibilities frontier (PPF),the economy is

Suppose Andrea is taking just two courses and is at a point on her PPF of grades for those two courses.Now this PPF shifts inward and Andrea moves to a point on the new PPF.Which of the following would be impossible after her PPF has shifted inward compared to before the PPF shifted?

Within the production possibilities frontier (PPF)framework,choice is depicted by the

With a constant opportunity cost between goods A and B,the PPF for goods A and B would

-Refer to Exhibit 2-4.The opportunity cost of moving from point A to point B is

With respect to a PPF for goods X and Y,productive efficiency implies that in order to produce more of good X there will be a reduction in production of good Y.

-Refer to Exhibit 2-1.If the economy is at point C,it follows that

What is the reason for the law of increasing opportunity costs?

-Refer to Exhibit 2-9.Who has the comparative advantage in the production of good A?

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,society may move to PPF₂ as a result of