Question 1

The economy was at point A producing 100X and 200Y.It moved to point B where it produces 200X and 300Y.It follows that

Accepted Answer

A) point A may have been a point below the economy's PPF,while point B may lie on the PPF. 
B) the economy's PPF could have shifted outward and point A was a point on the economy's old PPF. 
C) the economy has moved from one point on its PPF to another point on the same PPF. 
D) a or b 
E) a or c 
A) point A may have been a point below the economy's PPF,while point B may lie on the PPF. 
B) the economy's PPF could have shifted outward and point A was a point on the economy's old PPF. 
C) the economy has moved from one point on its PPF to another point on the same PPF. 
D) a or b 
E) a or c

Question 2

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

Accepted Answer

A) A 
B) B 
C) C 
D) J 
E) a,b,or c 
A) A 
B) B 
C) C 
D) J 
E) a,b,or c

Question 3

Exhibit 2-1  
-Refer to Exhibit 2-1.The movement from point A to point B is a movement from

Accepted Answer

A) a productive efficient point to a productive inefficient point. 
B) a point with more guns and less butter to a point with more butter and even more guns. 
C) a productive efficient point to another productive efficient point. 
D) a productive inefficient point to a productive efficient point. 
A) a productive efficient point to a productive inefficient point. 
B) a point with more guns and less butter to a point with more butter and even more guns. 
C) a productive efficient point to another productive efficient point. 
D) a productive inefficient point to a productive efficient point.

Question 4

Exhibit 2-1  
-According to the text,farming today in the U.S.is __________ productive compared to a century ago,resulting in there being __________ farmers today than at the turn of the previous century.

Accepted Answer

A) about as;fewer 
B) about as;more 
C) much more;fewer 
D) much more;more 
A) about as;fewer 
B) about as;more 
C) much more;fewer 
D) much more;more

Question 5

A PPF can

Accepted Answer

A) shift outward but not inward. 
B) shift inward but not outward. 
C) shift inward or outward. 
D) shift neither inward nor outward. 
A) shift outward but not inward. 
B) shift inward but not outward. 
C) shift inward or outward. 
D) shift neither inward nor outward.

Question 6

Exhibit 2-6  
-Refer to Exhibit 2-6.Which graph depicts the result of an increase in the number of illegal immigrants entering the country?

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 7

Which scenario below most accurately describes the process by which a technological change can affect employment patterns across industries?

Accepted Answer

A) A technological advance makes it possible to produce more of good X with less labor.As a result,labor is released from producing good X.Some of this labor ends up producing goods Y and Z. 
B) A technological advance makes it possible to produce less of good X with less labor.As a result,labor is released from producing good X.Some of this labor ends up producing good Y. 
C) A technological advance makes it possible to produce more of good X with more labor.As a result,more labor is needed to produce good X.There is less labor available to produce goods Y and Z. 
D) A technological advance makes it possible to produce more of good X with less labor.As a result,labor becomes more important to the production of good X.More labor ends up producing good X. 
E) none of the above 
A) A technological advance makes it possible to produce more of good X with less labor.As a result,labor is released from producing good X.Some of this labor ends up producing goods Y and Z. 
B) A technological advance makes it possible to produce less of good X with less labor.As a result,labor is released from producing good X.Some of this labor ends up producing good Y. 
C) A technological advance makes it possible to produce more of good X with more labor.As a result,more labor is needed to produce good X.There is less labor available to produce goods Y and Z. 
D) A technological advance makes it possible to produce more of good X with less labor.As a result,labor becomes more important to the production of good X.More labor ends up producing good X. 
E) none of the above

Question 8

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 9

Exhibit 2-3  
-Refer to Exhibit 2-3.If PPF1 is the relevant production possibilities frontier,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

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

Accepted Answer

A) 15,000 televisions. 
B) 15,000 fax machines. 
C) 10,000 televisions. 
D) 20,000 fax machines. 
A) 15,000 televisions. 
B) 15,000 fax machines. 
C) 10,000 televisions. 
D) 20,000 fax machines.

Question 11

Exhibit 2-5  
-Refer to Exhibit 2-5.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 12

Explain what productive efficiency means.Describe how productive efficiency is represented by a PPF.

Accepted Answer

An economy is producing efficiently if i

Question 13

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

Accepted Answer

A) A 
B) G 
C) D 
D) J 
A) A 
B) G 
C) D 
D) J

Question 14

Michael can produce the following combinations of X and Y: 10X and 10Y,5X and 15Y,and 0X and 20Y.Vernon can produce the following combinations of X and Y: 100X and 20Y,50X and 30Y,or 0X and 40Y.It follows that

Accepted Answer

A) Michael has the comparative advantage in producing X and Vernon has the comparative advantage in producing Y. 
B) Michael has the comparative advantage in producing Y and Vernon has the comparative advantage in producing X. 
C) Neither Michael nor Vernon has a comparative advantage in producing X. 
D) Neither Michael nor Vernon has a comparative advantage in producing Y. 
E) There is not enough information to answer the question. 
A) Michael has the comparative advantage in producing X and Vernon has the comparative advantage in producing Y. 
B) Michael has the comparative advantage in producing Y and Vernon has the comparative advantage in producing X. 
C) Neither Michael nor Vernon has a comparative advantage in producing X. 
D) Neither Michael nor Vernon has a comparative advantage in producing Y. 
E) There is not enough information to answer the question.

Question 15

A decrease in the quantity of resources available causes a movement down along a given PPF.

Accepted Answer

A) True 
 B)False

Question 16

The PPF between goods X and Y will be a downward-sloping

Accepted Answer

A) straight line if increasing opportunity costs exist. 
B) straight line if decreasing opportunity costs exist. 
C) curve that is bowed inward if increasing opportunity costs exist. 
D) straight line if constant opportunity costs exist. 
A) straight line if increasing opportunity costs exist. 
B) straight line if decreasing opportunity costs exist. 
C) curve that is bowed inward if increasing opportunity costs exist. 
D) straight line if constant opportunity costs exist.

Question 17

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

Accepted Answer

A) a gain of resources. 
B) a loss of resources. 
C) technological improvement in the production of both goods. 
D) a new law that interferes with economic efficiency. 
A) a gain of resources. 
B) a loss of resources. 
C) technological improvement in the production of both goods. 
D) a new law that interferes with economic efficiency.

Question 18

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 19

Exhibit 2-1  
-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 20

Economic growth causes the PPF to

Accepted Answer

A) shift leftward. 
B) shift rightward. 
C) remain constant. 
D) go from a straight line to a curve. 
A) shift leftward. 
B) shift rightward. 
C) remain constant. 
D) go from a straight line to a curve.

Exam 2: Production Possibilities Frontier Framework

The economy was at point A producing 100X and 200Y.It moved to point B where it produces 200X and 300Y.It follows that

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

Exhibit 2-1 -Refer to Exhibit 2-1.The movement from point A to point B is a movement from

Exhibit 2-1 -According to the text,farming today in the U.S.is __________ productive compared to a century ago,resulting in there being __________ farmers today than at the turn of the previous century.

A PPF can

Exhibit 2-6 -Refer to Exhibit 2-6.Which graph depicts the result of an increase in the number of illegal immigrants entering the country?

Which scenario below most accurately describes the process by which a technological change can affect employment patterns across industries?

A PPF is a straight line as a result of

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

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

Exhibit 2-5 -Refer to Exhibit 2-5.As more fax machines are produced,the opportunity cost of producing them

Explain what productive efficiency means.Describe how productive efficiency is represented by a PPF.

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

Michael can produce the following combinations of X and Y: 10X and 10Y,5X and 15Y,and 0X and 20Y.Vernon can produce the following combinations of X and Y: 100X and 20Y,50X and 30Y,or 0X and 40Y.It follows that

A decrease in the quantity of resources available causes a movement down along a given PPF.

The PPF between goods X and Y will be a downward-sloping

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

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

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

Economic growth causes the PPF to

What Economics Is About

Supply and Demand: Theory

Prices: Free, controlled, and Relative

Supply,demand,and Price: Applications

Macroeconomic Measurements, part I: Prices and Unemployment

Macroeconomic Measurements, part II: GDP and Real GDP

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self-Regulating Economy

Keynesian Macroeconomics and Economic Instability: a Critique of the Self-Regulating Economy

Fiscal Policy and the Federal Budget

Money,banking,and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth: Resources, technology, ideas, and Institutions

The Financial Crisis of 2007-2009

Debates in Macroeconomics Over the Role and Effects of Government

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

Globalization and International Impacts on the Economy

The Economic Case for and Against Government: Five Topics Considered

Stocks, bonds, futures, and Options

Filters

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

Exhibit 2-1 -According to the text,farming today in the U.S.is productive compared to a century ago,resulting in there being farmers today than at the turn of the previous century.

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

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