Exam 2: Scarcity and Opportunity Costs

Figure 1.3 -The city of Austin can buy roads or light rail. If 10 miles of roads cost $1 million and 2 miles of light rail cost $10 million, what is the city's opportunity cost of 1000 miles of roads?

Given below is the production possibilities schedule for a small island nation in South Pacific that produces capital and consumer goods.Table 2.3 -Consider the production possibilities curve for an economy producing only two commodities wheat (represented on the X axis) and wine (represented on the Y axis). A movement up along the production possibilities curve [PPC] will imply:

Figure 1.3 -Which of the following is related to the concept of trade-off used in economics?

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4 -If an economy is operating at a point outside the PPC, either the society has resources that are not being fully used or production is not efficient.

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4 -A nation's production possibilities curve [PPC] will shift outward if its workers receive better training.

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4 -Individuals, firms, and nations should specialize in those activities which have the highest marginal cost.

Figure 1.3 -The giving up of a good or activity in order to obtain some other good or activity is called:

The figure given below represents an economy producing corn and planes under different economic situations.Figure 2.2 -Refer to Figure 2.2. If there is an increase in the education level of the population, graph(s) _____ best illustrate(s) what will happen to the production possibilities curve [PPC].

Figure 1.3 -The tradeoffs faced by a society can be illustrated in a graph known as the:

The figure given below represents the production possibilities curves [PPC] of a country producing wine and cars.Figure 2.1 -Which of the following will result in an outward shift of the production possibilities curve [PPC]?

The table given below represents the output per hour of cookies and chilies in Ohio and Iowa.Table 2.4 -Bob and Bill can make 16 toys each if they devote 8 working hours in a day. Further, Bob can repair 4 cars and Bill can repair 2 cars, if they devote 8 working hours in a day. When these two individuals engage in trade, it would be advantageous for both if:

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4 -Specialization and trade do not allow individuals, firms, or even nations to acquire goods that lie beyond their production capabilities.

The table given below represents the output per hour of cookies and chilies in Ohio and Iowa.Table 2.4 -Archie can paint 5 backyard fences or repair 2 cars in 8 hours, while Austin can paint 4 backyard fences or repair 2 cars in 8 hours. Identify the correct statement.

Figure 1.3 -When constructing a production possibility curve for an economy, which of the following is assumed to be constant?

The table given below represents butter and ham production by two countries Norway and Sweden.Table 2.5 -A person has a comparative advantage in producing a good if:

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4 -Specialization and trade can take place only if a country is endowed with more of something compared to other countries.

The table given below represents the output per hour of cookies and chilies in Ohio and Iowa.Table 2.4 -Bob and Bill can make 16 toys each if they devote 8 working hours in a day. Further, Bob can repair 4 cars and Bill can repair 2 cars, if they devote 8 working hours in a day. What is the opportunity cost of repairing one car to Bob?

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4 -If you have a choice between studying and doing another activity, you will devote your time to studying as long as the additional benefit of studying is greater than the additional cost of studying.

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4 -When there is a choice between the consumption of bundle X and bundle Y, the opportunity cost of consuming bundle X is bundle Y.

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4 -A point lying inside the production possibilities curve [PPC] is not an attainable combination.