Exam 2: Production Possibilities Frontier Framework

A person has a comparative advantage in the production of a good when they can produce the product at a(n)________ opportunity cost compared to another person.

Exhibit 2-5 -Refer to Exhibit 2-5.The opportunity cost of moving from point D to point C is

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.

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 vertical axis

Suppose the economy goes from a point on its production possibilities frontier (PPF)to a point directly to the left of it.Assuming that the PPF has not shifted,this could be due to

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

Exhibit 2-7 -If the economy is on the production possibilities frontier (PPF),the economy is

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

Which of the following statements is true?

A society is productive inefficient when

Which of the following statements is false?

Exhibit 2-3 -A productive efficient society

In a PPF graph of goods X and Y,points that lie beyond (to the right of)the PPF represent combinations of the two goods that are currently unattainable.

A decrease in unemployment causes the PPF to shift outward (to the right).

Currently an economy is producing (at a point on its production possibilities frontier)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 1Y (not 1X)could be

Exhibit 2-5 -Refer to Exhibit 2-5.The economy is currently operating at point F.The opportunity cost of moving to point E is approximately

A PPF is bowed outward as a result of

Productive efficiency implies

A PPF is more likely to be a downward-sloping curve that is bowed outward than a downward-sloping straight line because most resources are

Exhibit 2-2 -Refer to Exhibit 2-2.If PPF₂ is the relevant production possibilities frontier,then point __________ is productive efficient.