Exam 3: Production Possibilities and Opportunity Cost

The production of capital goods will:

Which of the following is true about a production possibilities curve? The curve:

Narrbegin Exhibit 2.1 Production possibilities frontier data Consumption gads Capital goods 10 0 9 1 7 2 4 3 0 4 Narrend -In Exhibit 2.1, the opportunity cost of producing four units of capital goods is:

Bill has $10 that he can spend on a Superman action figure, a Batman graphic novel or an X-Men T-shirt. Bill decides to buy the action figure, even though the graphic novel was a close second choice. What is the opportunity cost of buying the action figure?

The law of increasing opportunity costs states that:

The law of increasing costs indicates that the opportunity cost of producing a good:

Inefficient production occurs:

Which of the following would most likely cause the production possibilities curve for cars and bread to shift outward?

Marginal analysis:

In order for an economy to shift its production possibilities curve rightward, it must:

Government supports research and development programs because:

Narrbegin Exhibit 2.7 Production possibilities frontier Narrend -Unattainable combination Z shown in Exhibit 2.7:

Narrbegin Exhibit 2.10 Production possibilities frontier -In Exhibit 2.10, to move from U to B, the opportunity cost:

For the economy to operate efficiently, it must shift workers from producing consumer goods to producing capital goods.

All points along the production possibilities frontier are:

A production possibility graph slopes down because of:

The production possibilities frontier shows that:

Assume Australia can use a given amount of its resources to produce either 20 caravans or eight automobiles and Japan can employ the same amount of its resources to produce either 20 caravans or 10 automobiles. Australia should specialise in:

The production possibilities frontier illustrates all of the following concepts except:

Narrbegin Exhibit 2.6 Production possibilities frontier data A B C D E F Capital goods 15 14 12 5 5 0 Cansumer guods 0 2 4 6 10 Narrend -As shown in Exhibit 2.6, a total output of zero units of capital goods and 10 units of consumer goods is: