Question 1

Exhibit 2-7  
-Refer to Exhibit 2-7.Point F is

Accepted Answer

A) unattainable if the economy's PPF is PPF1. 
B) inefficient if the economy's PPF is PPF2. 
C) attainable if the economy's PPF is PPF2. 
D) all of the above 
E) none of the above 
A) unattainable if the economy's PPF is PPF1. 
B) inefficient if the economy's PPF is PPF2. 
C) attainable if the economy's PPF is PPF2. 
D) all of the above 
E) none of the above

Question 2

If an economy can produce a maximum of 10 units of good X and the opportunity cost of 1X is always 2Y,then what is the maximum units of good Y the economy can produce?

Accepted Answer

A) 5 
B) 200 
C) 20 
D) 500 
E) none of the above 
A) 5 
B) 200 
C) 20 
D) 500 
E) none of the above

Question 3

If the law of increasing opportunity costs is operable,and currently the opportunity cost of producing the 101st unit of good X is 5Y,then the opportunity cost of producing the 201st unit of good is X is most likely to be

Accepted Answer

A) less than 5Y. 
B) more than 1/5Y but less than 5Y. 
C) more than 5Y 
D) less than 1/5Y but more than zero. 
A) less than 5Y. 
B) more than 1/5Y but less than 5Y. 
C) more than 5Y 
D) less than 1/5Y but more than zero.

Question 4

Give a definition of an advance in technology.Suppose that you are drawing a PPF for civilian goods and military goods,describe the effect on the PPF of an advance in technology in both civilian goods and military goods.How would the impact on the PPF be different if the technological improvement only helped in the production of military goods,but not civilian goods?

Accepted Answer

An advance in technology commonly refers

Question 5

Keisha can produce the following combinations of X and Y: 100X and 20Y,50X and 30Y,or 0X and 40Y.The opportunity cost of one unit of Y for Keisha is

Accepted Answer

A) 5 units of X. 
B) 0.2 units of X. 
C) 3 units of X. 
D) 1/2 unit of X. 
E) none of the above 
A) 5 units of X. 
B) 0.2 units of X. 
C) 3 units of X. 
D) 1/2 unit of X. 
E) none of the above

Question 6

If the law of increasing opportunity costs is operable,and currently the opportunity cost of producing the 1,000th unit of good X is 0.5Y,then the opportunity cost of producing the 2,001st unit of good is X is most likely to be

Accepted Answer

A) less than 0.5Y. 
B) more than 0.5Y but less than 2Y. 
C) more than 0.5Y 
D) less than 0.5Y but more than zero. 
E) none of the above 
A) less than 0.5Y. 
B) more than 0.5Y but less than 2Y. 
C) more than 0.5Y 
D) less than 0.5Y but more than zero. 
E) none of the above

Question 7

When an economy is not using all of its resources,it is producing at a point below its production possibilities frontier.

Accepted Answer

A) True 
 B)False

Question 8

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 9

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 10

Exhibit 2-5  
-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 11

Productive inefficiency implies that

Accepted Answer

A) it is possible to obtain gains in one area without losses in another. 
B) it is impossible to obtain gains in one area without losses in another. 
C) there are too many resources. 
D) there are too few resources. 
E) none of the above 
A) it is possible to obtain gains in one area without losses in another. 
B) it is impossible to obtain gains in one area without losses in another. 
C) there are too many resources. 
D) there are too few resources. 
E) none of the above

Question 12

Consider two points on the PPF: point A,at which there are 50 oranges and 100 apricots,and point B,at which there are 51 oranges and 98 apricots.If the economy is currently at point B,the opportunity cost of moving to point A is

Accepted Answer

A) 2 apricots. 
B) 1 orange. 
C) 98 apricots. 
D) 3 oranges. 
A) 2 apricots. 
B) 1 orange. 
C) 98 apricots. 
D) 3 oranges.

Question 13

Exhibit 2-7  
-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 14

Through war,many of the factories in country 1 are destroyed and many of its people are killed.As a result,the country's

Accepted Answer

A) production possibilities frontier (PPF)after the war has probably shifted to the right compared to its PPF prior to the war. 
B) PPF after the war has probably shifted to the left compared to its PPF prior to the war. 
C) PPF after the war is probably the same PPF as before the war. 
D) ability to produce goods and services has increased. 
E) b and d 
A) production possibilities frontier (PPF)after the war has probably shifted to the right compared to its PPF prior to the war. 
B) PPF after the war has probably shifted to the left compared to its PPF prior to the war. 
C) PPF after the war is probably the same PPF as before the war. 
D) ability to produce goods and services has increased. 
E) b and d

Question 15

Between 1910 and today,the number of farmers in the United States _____________ dramatically as a result of ___________________ in farming in the twentieth century.

Accepted Answer

A) dropped;technological improvements 
B) rose;technological improvements 
C) dropped;technological declines 
D) rose;technological declines 
A) dropped;technological improvements 
B) rose;technological improvements 
C) dropped;technological declines 
D) rose;technological declines

Question 16

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 17

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 18

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 19

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 outward if increasing opportunity costs exist. 
D) curve that is bowed outward 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 outward if increasing opportunity costs exist. 
D) curve that is bowed outward if constant opportunity costs exist.

Question 20

Technological __________ in American agriculture has __________ other types of employment.

Accepted Answer

A) improvement;drawn labor away from 
B) improvement;released labor to go to 
C) stagnation;drawn labor away from 
D) stagnation;released labor to go to 
A) improvement;drawn labor away from 
B) improvement;released labor to go to 
C) stagnation;drawn labor away from 
D) stagnation;released labor to go to

Exam 2: Production Possibilities Frontier Framework

Exhibit 2-7 -Refer to Exhibit 2-7.Point F is

If an economy can produce a maximum of 10 units of good X and the opportunity cost of 1X is always 2Y,then what is the maximum units of good Y the economy can produce?

If the law of increasing opportunity costs is operable,and currently the opportunity cost of producing the 101st unit of good X is 5Y,then the opportunity cost of producing the 201st unit of good is X is most likely to be

Keisha can produce the following combinations of X and Y: 100X and 20Y,50X and 30Y,or 0X and 40Y.The opportunity cost of one unit of Y for Keisha is

If the law of increasing opportunity costs is operable,and currently the opportunity cost of producing the 1,000th unit of good X is 0.5Y,then the opportunity cost of producing the 2,001st unit of good is X is most likely to be

When an economy is not using all of its resources,it is producing at a point below its production possibilities frontier.

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.

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

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

Productive inefficiency implies that

Consider two points on the PPF: point A,at which there are 50 oranges and 100 apricots,and point B,at which there are 51 oranges and 98 apricots.If the economy is currently at point B,the opportunity cost of moving to point A is

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

Through war,many of the factories in country 1 are destroyed and many of its people are killed.As a result,the country's

Between 1910 and today,the number of farmers in the United States _____________ dramatically as a result of ___________________ in farming in the twentieth century.

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

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.

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

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

Technological __________ in American agriculture has __________ other types of employment.

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

Between 1910 and today,the number of farmers in the United States _ dramatically as a result of _______ in farming in the twentieth century.

Technological in American agriculture has other types of employment.