Question 1

When all of the available factors of production are being efficiently employed,the

Accepted Answer

A) economy is producing at a point within its PPF. 
B) economy is producing at a point on its PPF. 
C) economy is producing at a point beyond its PPF. 
D) PPF disappears. 
E) opportunity cost of changing production is infinite. 
A) economy is producing at a point within its PPF. 
B) economy is producing at a point on its PPF. 
C) economy is producing at a point beyond its PPF. 
D) PPF disappears. 
E) opportunity cost of changing production is infinite.

Question 2

-The table above gives the production possibilities frontier for two countries,Anaconda and Bear.This table shows that

Accepted Answer

A) when Anaconda and Bear specialize and trade,Anaconda should specialize in the production of shoes. 
B) when Anaconda and Bear specialize and trade,Anaconda should produce at its production point E. 
C) Anaconda has an absolute advantage in the production of corn and shoes. 
D) Bear can consume no more than 2 bushels of corn and 700 pairs of shoes. 
E) Bear is unable to gain from trade with Anaconda. 
A) when Anaconda and Bear specialize and trade,Anaconda should specialize in the production of shoes. 
B) when Anaconda and Bear specialize and trade,Anaconda should produce at its production point E. 
C) Anaconda has an absolute advantage in the production of corn and shoes. 
D) Bear can consume no more than 2 bushels of corn and 700 pairs of shoes. 
E) Bear is unable to gain from trade with Anaconda.

Question 3

-The table above shows the production possibilities for an economy.Drawing a PPF with books on the vertical axis and bread on the horizontal axis,a movement from possibility B to possibility C to possibility D shows the opportunity cost of ________ moving down along the PPF.

Accepted Answer

A) books decreasing 
B) bread decreasing 
C) bread increases 
D) books is constant 
E) books and bread are both increasing 
A) books decreasing 
B) bread decreasing 
C) bread increases 
D) books is constant 
E) books and bread are both increasing

Question 4

The United States can use all of its resources to produce 50 computers or 4,000 shoes.Suppose that at world market prices,one computer exchanges for 100 shoes.Explain how the United States can gain from trade.

Accepted Answer

In the United States,the opportunity cos

Question 5

Hank requires 1 hour to cut the grass and 3 hours to clean the house.His sister Holly requires 1 hour to cut the grass and 4 hours to clean the house.Which of the following statements is true?

Accepted Answer

A) Hank has a comparative advantage in both cutting the grass and cleaning the house. 
B) Hank and Holly both have a comparative advantage in cutting the grass. 
C) Hank has a lower opportunity cost of cutting the grass. 
D) Hank has an absolute advantage in both cutting the grass and cleaning the house. 
E) Holly has a comparative advantage in cutting the grass. 
A) Hank has a comparative advantage in both cutting the grass and cleaning the house. 
B) Hank and Holly both have a comparative advantage in cutting the grass. 
C) Hank has a lower opportunity cost of cutting the grass. 
D) Hank has an absolute advantage in both cutting the grass and cleaning the house. 
E) Holly has a comparative advantage in cutting the grass.

Question 6

-The figure above shows how the PPF for cell phones and new cell-phone factories can expand.In the figure,if the economy produced 4 million cell phones using the resources efficiently,the PPF would

Accepted Answer

A) expand,but not as far as shown in the figure. 
B) not expand. 
C) expand farther than shown in the figure. 
D) expand along the vertical axis and not along the horizontal axis. 
E) expand evenly along both axes. 
A) expand,but not as far as shown in the figure. 
B) not expand. 
C) expand farther than shown in the figure. 
D) expand along the vertical axis and not along the horizontal axis. 
E) expand evenly along both axes.

Question 7

What is the opportunity cost of economic growth?

Accepted Answer

A) current period consumption goods 
B) current period capital goods 
C) land 
D) both current period consumption and capital goods 
E) both current period capital goods and land 
A) current period consumption goods 
B) current period capital goods 
C) land 
D) both current period consumption and capital goods 
E) both current period capital goods and land

Question 8

In order for Ireland to grow more potatoes,wool production must decrease.This situation is an example of

Accepted Answer

A) producing at a point that lies beyond the PPF. 
B) zero opportunity cost. 
C) opportunity benefit. 
D) a free lunch. 
E) a tradeoff. 
A) producing at a point that lies beyond the PPF. 
B) zero opportunity cost. 
C) opportunity benefit. 
D) a free lunch. 
E) a tradeoff.

Question 9

-The figure above shows a nation's production possibilities frontier.In the figure,point A shows

Accepted Answer

A) the maximum quantity of pizza that can be produced. 
B) the minimum quantity of pizza that the society must produce. 
C) an unattainable point. 
D) an attainable point with unemployed resources. 
E) More information is needed to determine which of the above answers is correct. 
A) the maximum quantity of pizza that can be produced. 
B) the minimum quantity of pizza that the society must produce. 
C) an unattainable point. 
D) an attainable point with unemployed resources. 
E) More information is needed to determine which of the above answers is correct.

Question 10

A major earthquake occurs in the central part of the United States.What impact would this have on the nation's production possibilities frontier and why?

Accepted Answer

A) It would shift outward because unemployment would be reduced. 
B) Nothing would happen because the nation would still have the same capabilities. 
C) A tradeoff would occur to replace the resources and goods destroyed. 
D) It would shift inward because some of the nation's resources,such as capital and labor,would be destroyed. 
E) It would not shift because people would get to work to replace any capital that was destroyed. 
A) It would shift outward because unemployment would be reduced. 
B) Nothing would happen because the nation would still have the same capabilities. 
C) A tradeoff would occur to replace the resources and goods destroyed. 
D) It would shift inward because some of the nation's resources,such as capital and labor,would be destroyed. 
E) It would not shift because people would get to work to replace any capital that was destroyed.

Question 11

-The figure above shows a production possibilities frontier.In the figure,when the economy moves from point C to point B,what is the opportunity cost of a DVD?

Accepted Answer

A) 0.5 cell phones 
B) 2 cell phones 
C) 0.5 million cell phones 
D) 2 million cell phones 
E) zero 
A) 0.5 cell phones 
B) 2 cell phones 
C) 0.5 million cell phones 
D) 2 million cell phones 
E) zero

Question 12

When one person's opportunity cost of producing a good is lower than another person's opportunity cost of producing the same good,it is called

Accepted Answer

A) an absolute advantage. 
B) a comparative advantage. 
C) specialization. 
D) production possibilities. 
E) a trade-off. 
A) an absolute advantage. 
B) a comparative advantage. 
C) specialization. 
D) production possibilities. 
E) a trade-off.

Question 13

-Gabriel operates a ranch in Idaho where he raises cattle and grows potatoes.The figure above illustrates his production possibilities frontier.What is Gabriel's opportunity cost of growing another ton of potatoes?

Accepted Answer

A) 400 cows 
B) 80 cows 
C) 100 cows 
D) 0 cows 
E) 1 ton of potatoes 
A) 400 cows 
B) 80 cows 
C) 100 cows 
D) 0 cows 
E) 1 ton of potatoes

Question 14

If a society moves from a period of time with significant unemployment to a time with full employment,its production possibilities frontier will

Accepted Answer

A) shift leftward. 
B) shift rightward. 
C) not shift because the society moves from one point on the frontier to a point inside the frontier. 
D) not shift because the society moves from a point inside the frontier to a point on the frontier. 
E) not shift because the society moves from one point on the frontier to a point outside the frontier. 
A) shift leftward. 
B) shift rightward. 
C) not shift because the society moves from one point on the frontier to a point inside the frontier. 
D) not shift because the society moves from a point inside the frontier to a point on the frontier. 
E) not shift because the society moves from one point on the frontier to a point outside the frontier.

Question 15

The figure above shows Liz's and Joe's production possibilities for Salads and Smoothies.
-Given the information in the figure above,Liz ________ benefit from trade with Joe because ________.

Accepted Answer

A) can;each of them has a comparative advantage in one of the goods 
B) can;each of them has an absolute advantage in one of the goods 
C) cannot;she has an absolute advantage in both goods 
D) cannot;she has a comparative advantage in both goods 
E) can;Joe is more productive in producing one of the goods 
A) can;each of them has a comparative advantage in one of the goods 
B) can;each of them has an absolute advantage in one of the goods 
C) cannot;she has an absolute advantage in both goods 
D) cannot;she has a comparative advantage in both goods 
E) can;Joe is more productive in producing one of the goods

Question 16

In a production possibilities frontier diagram,the attainable production points are shown as

Accepted Answer

A) only the points on the production possibilities frontier. 
B) only the points beyond the production possibilities frontier. 
C) only the points inside the production possibilities frontier. 
D) the points inside and the points on the production possibilities frontier. 
E) any of the production points. 
A) only the points on the production possibilities frontier. 
B) only the points beyond the production possibilities frontier. 
C) only the points inside the production possibilities frontier. 
D) the points inside and the points on the production possibilities frontier. 
E) any of the production points.

Question 17

Once you find the opportunity cost of producing one unit of a good,to find the opportunity cost of producing the other good,you must

Accepted Answer

A) take the inverse. 
B) multiply by the total amount produced of the second good. 
C) divide by the total amount produced of the second good. 
D) do nothing because the opportunity cost for the first good is the same as the opportunity cost for the second good. 
E) None of the answers is correct. 
A) take the inverse. 
B) multiply by the total amount produced of the second good. 
C) divide by the total amount produced of the second good. 
D) do nothing because the opportunity cost for the first good is the same as the opportunity cost for the second good. 
E) None of the answers is correct.

Question 18

-Huey and Steve can grow potatoes or tomatoes.The table above shows the pounds of potatoes and tomatoes Huey and Steve can grow in a week.Based on the table,Huey's opportunity cost of producing one pound of tomatoes is

Accepted Answer

A) 1.5 pounds of potatoes. 
B) 0.66 pound of potatoes. 
C) 0,because he has an absolute advantage in it. 
D) 0,because he has a comparative advantage in it. 
E) 1.0 pound of potatoes. 
A) 1.5 pounds of potatoes. 
B) 0.66 pound of potatoes. 
C) 0,because he has an absolute advantage in it. 
D) 0,because he has a comparative advantage in it. 
E) 1.0 pound of potatoes.

Question 19

A production point beyond the production possibilities frontier represents what?

Accepted Answer

A production point beyond the

Question 20

The opportunity cost of economic growth is ________ and the benefit of economic growth is ________.

Accepted Answer

A) increased current consumption;increased future consumption 
B) increased current consumption;decreased future consumption 
C) decreased current consumption;increased future consumption 
D) decreased current consumption;decreased future consumption 
E) nothing;increased future consumption 
A) increased current consumption;increased future consumption 
B) increased current consumption;decreased future consumption 
C) decreased current consumption;increased future consumption 
D) decreased current consumption;decreased future consumption 
E) nothing;increased future consumption

When all of the available factors of production are being efficiently employed,the

-The table above gives the production possibilities frontier for two countries,Anaconda and Bear.This table shows that

-The table above shows the production possibilities for an economy.Drawing a PPF with books on the vertical axis and bread on the horizontal axis,a movement from possibility B to possibility C to possibility D shows the opportunity cost of ________ moving down along the PPF.

The United States can use all of its resources to produce 50 computers or 4,000 shoes.Suppose that at world market prices,one computer exchanges for 100 shoes.Explain how the United States can gain from trade.

Hank requires 1 hour to cut the grass and 3 hours to clean the house.His sister Holly requires 1 hour to cut the grass and 4 hours to clean the house.Which of the following statements is true?

-The figure above shows how the PPF for cell phones and new cell-phone factories can expand.In the figure,if the economy produced 4 million cell phones using the resources efficiently,the PPF would

What is the opportunity cost of economic growth?

In order for Ireland to grow more potatoes,wool production must decrease.This situation is an example of

-The figure above shows a nation's production possibilities frontier.In the figure,point A shows

A major earthquake occurs in the central part of the United States.What impact would this have on the nation's production possibilities frontier and why?

-The figure above shows a production possibilities frontier.In the figure,when the economy moves from point C to point B,what is the opportunity cost of a DVD?

When one person's opportunity cost of producing a good is lower than another person's opportunity cost of producing the same good,it is called

-Gabriel operates a ranch in Idaho where he raises cattle and grows potatoes.The figure above illustrates his production possibilities frontier.What is Gabriel's opportunity cost of growing another ton of potatoes?

If a society moves from a period of time with significant unemployment to a time with full employment,its production possibilities frontier will

The figure above shows Liz's and Joe's production possibilities for Salads and Smoothies. -Given the information in the figure above,Liz benefit from trade with Joe because .

In a production possibilities frontier diagram,the attainable production points are shown as

Once you find the opportunity cost of producing one unit of a good,to find the opportunity cost of producing the other good,you must

-Huey and Steve can grow potatoes or tomatoes.The table above shows the pounds of potatoes and tomatoes Huey and Steve can grow in a week.Based on the table,Huey's opportunity cost of producing one pound of tomatoes is

A production point beyond the production possibilities frontier represents what?

The opportunity cost of economic growth is and the benefit of economic growth is .

Getting Started

The Usand Global Economies

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 3: The Economic Problem

When all of the available factors of production are being efficiently employed,the

-The table above gives the production possibilities frontier for two countries,Anaconda and Bear.This table shows that

-The table above shows the production possibilities for an economy.Drawing a PPF with books on the vertical axis and bread on the horizontal axis,a movement from possibility B to possibility C to possibility D shows the opportunity cost of ________ moving down along the PPF.

The United States can use all of its resources to produce 50 computers or 4,000 shoes.Suppose that at world market prices,one computer exchanges for 100 shoes.Explain how the United States can gain from trade.

Hank requires 1 hour to cut the grass and 3 hours to clean the house.His sister Holly requires 1 hour to cut the grass and 4 hours to clean the house.Which of the following statements is true?

-The figure above shows how the PPF for cell phones and new cell-phone factories can expand.In the figure,if the economy produced 4 million cell phones using the resources efficiently,the PPF would

What is the opportunity cost of economic growth?

In order for Ireland to grow more potatoes,wool production must decrease.This situation is an example of

-The figure above shows a nation's production possibilities frontier.In the figure,point A shows

A major earthquake occurs in the central part of the United States.What impact would this have on the nation's production possibilities frontier and why?

-The figure above shows a production possibilities frontier.In the figure,when the economy moves from point C to point B,what is the opportunity cost of a DVD?

When one person's opportunity cost of producing a good is lower than another person's opportunity cost of producing the same good,it is called

-Gabriel operates a ranch in Idaho where he raises cattle and grows potatoes.The figure above illustrates his production possibilities frontier.What is Gabriel's opportunity cost of growing another ton of potatoes?

If a society moves from a period of time with significant unemployment to a time with full employment,its production possibilities frontier will

The figure above shows Liz's and Joe's production possibilities for Salads and Smoothies. -Given the information in the figure above,Liz ________ benefit from trade with Joe because ________.

In a production possibilities frontier diagram,the attainable production points are shown as

Once you find the opportunity cost of producing one unit of a good,to find the opportunity cost of producing the other good,you must

-Huey and Steve can grow potatoes or tomatoes.The table above shows the pounds of potatoes and tomatoes Huey and Steve can grow in a week.Based on the table,Huey's opportunity cost of producing one pound of tomatoes is

A production point beyond the production possibilities frontier represents what?

The opportunity cost of economic growth is ________ and the benefit of economic growth is ________.

Getting Started

The Usand Global Economies

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

The figure above shows Liz's and Joe's production possibilities for Salads and Smoothies. -Given the information in the figure above,Liz benefit from trade with Joe because .

The opportunity cost of economic growth is and the benefit of economic growth is .