Question 1

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

Accepted Answer

A) 5,000 televisions. 
B) 5,000 fax machines. 
C) 10,000 televisions. 
D) 10,000 fax machines. 
A) 5,000 televisions. 
B) 5,000 fax machines. 
C) 10,000 televisions. 
D) 10,000 fax machines.

Question 2

A production possibilities frontier separates an attainable region from an unattainable region.

Accepted Answer

A) True 
 B)False

Question 3

Exhibit 2-1  
-Refer to Exhibit 2-1.A movement from point B to point D

Accepted Answer

A) could only happen through economic growth. 
B) is necessarily a movement from a productive efficient point to a productive inefficient point. 
C) is a movement from a productive efficient point to another productive efficient point. 
D) is necessarily a movement from a productive inefficient point to another productive inefficient point. 
A) could only happen through economic growth. 
B) is necessarily a movement from a productive efficient point to a productive inefficient point. 
C) is a movement from a productive efficient point to another productive efficient point. 
D) is necessarily a movement from a productive inefficient point to another productive inefficient point.

Question 4

Exhibit 2-5  
-Productive efficiency implies that

Accepted Answer

A) all consumers' wants are satisfied. 
B) no advance in technology will occur in the future. 
C) the attainable region is greater than the unattainable region. 
D) gains are impossible in one area without losses in another. 
E) all of the above 
A) all consumers' wants are satisfied. 
B) no advance in technology will occur in the future. 
C) the attainable region is greater than the unattainable region. 
D) gains are impossible in one area without losses in another. 
E) all of the above

Question 5

Exhibit 2-6  
-Refer to Exhibit 2-6.Which graph depicts the result of an increase in the unemployment rate?

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 6

The law of increasing opportunity costs states that as

Accepted Answer

A) less of a good is produced,the higher the opportunity costs of producing that good. 
B) more of a good is produced,the lower the opportunity costs of producing that good. 
C) more of a good is produced,the higher the opportunity costs of producing that good. 
D) more of a good is produced,the opportunity cost of producing the good remains the same. 
E) a and b 
A) less of a good is produced,the higher the opportunity costs of producing that good. 
B) more of a good is produced,the lower the opportunity costs of producing that good. 
C) more of a good is produced,the higher the opportunity costs of producing that good. 
D) more of a good is produced,the opportunity cost of producing the good remains the same. 
E) a and b

Question 7

An economy can produce the following combinations of goods: 50X and 0Y,40X and 10Y,30X and 20Y,20X and 30Y,10X and 40Y,and 0X and 50Y.The production possibilities frontier (PPF)for the economy is

Accepted Answer

A) concave downward because the opportunity cost of producing the 10th unit of Y is greater than the opportunity cost of producing the first unit of Y. 
B) a straight (downward-sloping)line because the opportunity cost of producing the two goods is constant. 
C) concave downward because the opportunity cost of producing the 40th unit of Y is less than the opportunity cost of producing the 10th unit of Y. 
D) a straight (downward-sloping)line because the opportunity cost of producing the 10th unit of X is greater than the opportunity cost of producing the 40th unit of X. 
E) a straight (downward-sloping)line because the opportunity cost of producing the 30th unit of Y is greater than the opportunity cost of producing the 30th unit of X. 
A) concave downward because the opportunity cost of producing the 10th unit of Y is greater than the opportunity cost of producing the first unit of Y. 
B) a straight (downward-sloping)line because the opportunity cost of producing the two goods is constant. 
C) concave downward because the opportunity cost of producing the 40th unit of Y is less than the opportunity cost of producing the 10th unit of Y. 
D) a straight (downward-sloping)line because the opportunity cost of producing the 10th unit of X is greater than the opportunity cost of producing the 40th unit of X. 
E) a straight (downward-sloping)line because the opportunity cost of producing the 30th unit of Y is greater than the opportunity cost of producing the 30th unit of X.

Question 8

If Luke can bake bread at a lower opportunity cost than Jason,and Jason can produce paintings at a lower opportunity cost than Luke,it follows that

Accepted Answer

A) Luke has a comparative advantage in paintings and Jason has a comparative advantage in baking bread. 
B) Both Luke and Jason have a comparative advantage in baking bread. 
C) Both Luke and Jason have a comparative disadvantage in producing paintings. 
D) Luke has a comparative advantage in baking bread and Jason has a comparative advantage in producing paintings. 
E) There is not enough information to answer the question. 
A) Luke has a comparative advantage in paintings and Jason has a comparative advantage in baking bread. 
B) Both Luke and Jason have a comparative advantage in baking bread. 
C) Both Luke and Jason have a comparative disadvantage in producing paintings. 
D) Luke has a comparative advantage in baking bread and Jason has a comparative advantage in producing paintings. 
E) There is not enough information to answer the question.

Question 9

Assume that two products are being produced: benches and chairs.Create a table that illustrates constant opportunity costs in the production of these two goods.Draw a production possibilities frontier (PPF)based on the data in your table and explain the condition necessary for a PPF to exhibit constant opportunity costs.

Accepted Answer

The following table illustrates constant

Question 10

An economy is productive efficient if it produces

Accepted Answer

A) more than enough food to feed everyone. 
B) more goods and services in each successive year. 
C) maximum output with given resources and technology. 
D) enough output so that no one lives in poverty. 
A) more than enough food to feed everyone. 
B) more goods and services in each successive year. 
C) maximum output with given resources and technology. 
D) enough output so that no one lives in poverty.

Question 11

The economy can produce 15X and 15Y,10X and 20Y,5X and 25Y,or 0X and 30Y.It follows that opportunity cost of 1X is ___Y.

Accepted Answer

A) 4.0 
B) 5.0 
C) 2.5 
D) 1.0 
E) none of the above 
A) 4.0 
B) 5.0 
C) 2.5 
D) 1.0 
E) none of the above

Question 12

Suppose Andrea is taking just two courses and is at a point inside her PPF of grades for those two courses.If Andrea changes her work habits then it is impossible for

Accepted Answer

A) either one of her grades to rise. 
B) both of her grades to rise. 
C) both of her grades to fall. 
D) either one of her grades to rise while the other grade remains constant. 
E) none of the above is impossible in this situation 
A) either one of her grades to rise. 
B) both of her grades to rise. 
C) both of her grades to fall. 
D) either one of her grades to rise while the other grade remains constant. 
E) none of the above is impossible in this situation

Question 13

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 14

Exhibit 2-4  
-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 15

Exhibit 2-5  
-Jose has one evening in which to prepare for two exams and can employ one of two possible strategies:
Strategy
Score in Economics
Score in Statistics
A
94
79
B
77
90
The opportunity cost of receiving a 90 on the statistics exam is ___________ points on the economics exam.

Accepted Answer

A) 79 
B) 17 
C) 11 
D) 90 
A) 79 
B) 17 
C) 11 
D) 90

Question 16

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

Accepted Answer

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

Question 17

The economy is currently on its production possibilities frontier (PPF).A politician says that it is possible to get more of everything---more infrastructure,more schools,more national defense,more spending on social programs,and so on.The politician is

Accepted Answer

A) correct if he is assuming a rightward-shifting PPF. 
B) incorrect if he is assuming a rightward-shifting PPF. 
C) incorrect if he is assuming a PPF that does not change. 
D) correct if he is assuming a PPF that does not change. 
E) a and c 
A) correct if he is assuming a rightward-shifting PPF. 
B) incorrect if he is assuming a rightward-shifting PPF. 
C) incorrect if he is assuming a PPF that does not change. 
D) correct if he is assuming a PPF that does not change. 
E) a and c

Question 18

In an eight-hour day,Andy can produce either 24 loaves of bread or 8 pounds of butter.In an eight-hour day,John can produce either 8 loaves of bread or 8 pounds of butter.The opportunity cost of producing 1 pound of butter is

Accepted Answer

A) 1/3 hour for Andy and 1 hour for John. 
B) 1 hour for Andy and 1 hour for John. 
C) 3 loaves of bread for Andy and 1 loaf of bread for John. 
D) 1/3 loaves of bread for Andy and 1 loaf of bread for John. 
E) none of the above 
A) 1/3 hour for Andy and 1 hour for John. 
B) 1 hour for Andy and 1 hour for John. 
C) 3 loaves of bread for Andy and 1 loaf of bread for John. 
D) 1/3 loaves of bread for Andy and 1 loaf of bread for John. 
E) none of the above

Question 19

Exhibit 2-2  
-Refer to Exhibit 2-2.If PPF2 is the relevant production possibilities frontier,a significant loss of resources will

Accepted Answer

A) move this society from point D to point G on PPF   . 
B) move this society to PPF   . 
C) move this society to PPF   . 
D) not affect this society. 
A) move this society from point D to point G on PPF   . 
B) move this society to PPF   . 
C) move this society to PPF   . 
D) not affect this society.

Question 20

Consider two points on the PPF: point A,at which there are 10 apples and 20 pears,and point B,at which there are 7 apples and 21 pears.If the economy is currently at point A,the opportunity cost of moving to point B is

Accepted Answer

A) 1 pear. 
B) 7 apples. 
C) 3 apples. 
D) 21 pears. 
A) 1 pear. 
B) 7 apples. 
C) 3 apples. 
D) 21 pears.

Exam 2: Production Possibilities Frontier Framework

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

A production possibilities frontier separates an attainable region from an unattainable region.

Exhibit 2-1 -Refer to Exhibit 2-1.A movement from point B to point D

Exhibit 2-5 -Productive efficiency implies that

Exhibit 2-6 -Refer to Exhibit 2-6.Which graph depicts the result of an increase in the unemployment rate?

The law of increasing opportunity costs states that as

An economy can produce the following combinations of goods: 50X and 0Y,40X and 10Y,30X and 20Y,20X and 30Y,10X and 40Y,and 0X and 50Y.The production possibilities frontier (PPF)for the economy is

If Luke can bake bread at a lower opportunity cost than Jason,and Jason can produce paintings at a lower opportunity cost than Luke,it follows that

An economy is productive efficient if it produces

The economy can produce 15X and 15Y,10X and 20Y,5X and 25Y,or 0X and 30Y.It follows that opportunity cost of 1X is ___Y.

Suppose Andrea is taking just two courses and is at a point inside her PPF of grades for those two courses.If Andrea changes her work habits then it is impossible for

An advance in technology commonly refers to the ability to produce

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

Exhibit 2-5 -Jose has one evening in which to prepare for two exams and can employ one of two possible strategies: Strategy Score in Economics Score in Statistics A 94 79 B 77 90 The opportunity cost of receiving a 90 on the statistics exam is ___________ points on the economics exam.

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

The economy is currently on its production possibilities frontier (PPF).A politician says that it is possible to get more of everything---more infrastructure,more schools,more national defense,more spending on social programs,and so on.The politician is

In an eight-hour day,Andy can produce either 24 loaves of bread or 8 pounds of butter.In an eight-hour day,John can produce either 8 loaves of bread or 8 pounds of butter.The opportunity cost of producing 1 pound of butter is

Exhibit 2-2 -Refer to Exhibit 2-2.If PPF2 is the relevant production possibilities frontier,a significant loss of resources will

Consider two points on the PPF: point A,at which there are 10 apples and 20 pears,and point B,at which there are 7 apples and 21 pears.If the economy is currently at point A,the opportunity cost of moving to point B is

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,a significant loss of resources will