Exam 2: Choice, Opportunity Costs, and Specialization

A point lying inside the production possibilities curve [PPC] is not an attainable combination.

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:

In economics, the concept of opportunity cost is:

If the resources within a nation are not being fully or efficiently utilized, it means:

The difference between what can be produced and consumed without specialization and trade and with specialization and trade is called:

If an individual can produce a good or service with a lower opportunity cost than another individual, then he or she is said to have the comparative advantage.

Which of the following ideas is illustrated by the production possibilities curve [PPC]?

Increasing marginal opportunity costs indicate that if a nation wants to produce more of one product, it may do so by giving up greater and greater amounts of another product.

The marginal cost of producing a commodity increases because of specialization.

The table given below represents the output per hour of cookies and chilies in Ohio and Iowa. Table 2.4 Refer to Table 2.4.Calculate the opportunity cost of a cookie in Iowa.

Which of the following conditions will be true for a nation operating at a point lying inside its production possibilities curve?

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:

Betty goes out to enjoy a bouffe with her friend instead of practicing calculus problems for her maths examination that is due the following day.This implies that the opportunity cost of the bouffe to Betty is zero.

The table given below represents the output per hour of cookies and chilies in Ohio and Iowa. Table 2.4 Refer to Table 2.4.If trade were to occur, what would be the least amount Ohio would be willing to accept for 1 cookie?

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?

The figure given below represents the production possibilities curves [PPC] of a country producing wine and cars. Figure 2.1 Refer to Figure 2.1.If the country has curve I as its PPC, _____ would most likely cause the curve to shift to curve II.

Specialization and trade can take place only if a country is endowed with more of something compared to other countries.

Which of the following actions is most likely to cause a rightward shift in a production possibilities curve [PPC]?

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

Specialization according to comparative advantage followed by free trade makes every economy better off.