Question 1

Points on the PPF are all

Accepted Answer

A) unattainable and have fully employed resources. 
B) free lunches. 
C) inefficient. 
D) attainable and have some unemployed resources. 
E) production efficient. 
A) unattainable and have fully employed resources. 
B) free lunches. 
C) inefficient. 
D) attainable and have some unemployed resources. 
E) production efficient.

Question 2

To achieve gains from trade,a country

Accepted Answer

A) needs to have an absolute advantage in the production of all goods. 
B) specializes in the producing a good in which it has a lower opportunity cost. 
C) must produce at a point beyond its PPF. 
D) should produce at the midpoint of its PPF. 
E) needs to have an absolute advantage in the production of at least one good. 
A) needs to have an absolute advantage in the production of all goods. 
B) specializes in the producing a good in which it has a lower opportunity cost. 
C) must produce at a point beyond its PPF. 
D) should produce at the midpoint of its PPF. 
E) needs to have an absolute advantage in the production of at least one good.

Question 3

In one hour John can produce 20 loaves of bread or 8 cakes.In one hour Phyllis can produce 30 loaves of bread or 15 cakes.Which of the following statements is true?

Accepted Answer

A) Phyllis has a comparative advantage in producing bread. 
B) John has a comparative advantage in producing cakes. 
C) Phyllis has an absolute advantage in both goods. 
D) John has an absolute advantage in both goods. 
E) Phyllis has a comparative advantage in producing both cakes and bread. 
A) Phyllis has a comparative advantage in producing bread. 
B) John has a comparative advantage in producing cakes. 
C) Phyllis has an absolute advantage in both goods. 
D) John has an absolute advantage in both goods. 
E) Phyllis has a comparative advantage in producing both cakes and bread.

Question 4

-Robinson Crusoe divides his time between catching fish and gathering fruit.Part of his production possibilities frontier is given in the above table.Mr.Crusoe,while lonesome,is efficient and always stays on his PPF.Mr.Crusoe is consuming 20 pounds of fish.Then he decides to slowly become a vegetarian and decrease his consumption of fish to 9 pounds.This decision means that Mr.Crusoe will

Accepted Answer

A) incur an opportunity cost of 9 pounds of fruit. 
B) incur an opportunity cost of 20 pounds of fish. 
C) be able to enjoy a gain of 9 pounds of fruit. 
D) incur an opportunity cost of 99 pounds of fruit. 
E) incur an opportunity cost of 9 pounds of fish. 
A) incur an opportunity cost of 9 pounds of fruit. 
B) incur an opportunity cost of 20 pounds of fish. 
C) be able to enjoy a gain of 9 pounds of fruit. 
D) incur an opportunity cost of 99 pounds of fruit. 
E) incur an opportunity cost of 9 pounds of fish.

Question 5

-In the table above,how many jackets must Mary forgo for every dress she makes?

Accepted Answer

A) 12 jackets 
B) 3/4 of a jacket 
C) 2/3 of a jacket 
D) 1 1/2 jackets 
E) 8 jackets 
A) 12 jackets 
B) 3/4 of a jacket 
C) 2/3 of a jacket 
D) 1 1/2 jackets 
E) 8 jackets

Question 6

Moving from one point to another on a production possibilities frontier implies

Accepted Answer

A) increasing the production of both goods. 
B) decreasing the production of both goods. 
C) increasing the production of one good and decreasing the production of another. 
D) holding the production levels of both goods constant. 
E) changing the amount of factors of production that are employed. 
A) increasing the production of both goods. 
B) decreasing the production of both goods. 
C) increasing the production of one good and decreasing the production of another. 
D) holding the production levels of both goods constant. 
E) changing the amount of factors of production that are employed.

Question 7

-The table above gives four production possibilities for airplanes and cruise ships.In possibility A,how many resources are devoted to the production of cruise ships?

Accepted Answer

A) 0 
B) few 
C) most 
D) all 
E) It is impossible to tell without more information about the prices of airplanes and cruise ships. 
A) 0 
B) few 
C) most 
D) all 
E) It is impossible to tell without more information about the prices of airplanes and cruise ships.

Question 8

-The figure above shows the production possibilities frontier for a country.If the country is producing at point D,then the

Accepted Answer

A) resources are being used efficiently. 
B) technology associated with producing SUVs and compact cars is advancing. 
C) resources are not being used efficiently and/or are unemployed. 
D) production of SUVs and compact cars is maximized. 
E) None of the above answers is correct because it is not possible to produce at point D. 
A) resources are being used efficiently. 
B) technology associated with producing SUVs and compact cars is advancing. 
C) resources are not being used efficiently and/or are unemployed. 
D) production of SUVs and compact cars is maximized. 
E) None of the above answers is correct because it is not possible to produce at point D.

Question 9

Consider a production possibility frontier with jeans on the vertical axis and shoes on the horizontal axis.As the country moves along the frontier closer to the horizontal axis,

Accepted Answer

A) more jeans are produced. 
B) the country eventually chooses an unattainable point. 
C) free lunches occur. 
D) more tradeoffs occur. 
E) more shoes are produced. 
A) more jeans are produced. 
B) the country eventually chooses an unattainable point. 
C) free lunches occur. 
D) more tradeoffs occur. 
E) more shoes are produced.

Question 10

By specializing and trading,a country is able to

Accepted Answer

A) obtain the absolute advantage in the goods it produces. 
B) consume but not to produce combinations of goods that lie beyond its production possibilities frontier. 
C) produce but not to consume combinations of goods that lie beyond its production possibilities frontier. 
D) both produce and consume combinations of goods that lie beyond its production possibilities frontier. 
E) neither produce nor consume combinations of goods that lie beyond its production possibilities frontier. 
A) obtain the absolute advantage in the goods it produces. 
B) consume but not to produce combinations of goods that lie beyond its production possibilities frontier. 
C) produce but not to consume combinations of goods that lie beyond its production possibilities frontier. 
D) both produce and consume combinations of goods that lie beyond its production possibilities frontier. 
E) neither produce nor consume combinations of goods that lie beyond its production possibilities frontier.

Question 11

On a production possibilities frontier,500 pounds of apples and 1,200 pounds of bananas can be produced while at another point on the same frontier,300 pounds of apples and 1,300 pounds of bananas can be produced.Between these points,what is the opportunity cost of producing a pound of apples?

Accepted Answer

A) 2 pounds of bananas 
B) 100 pounds of bananas 
C) 2 pounds of apples 
D) 0.5 of a pound of bananas 
E) 5/12 of a pound of bananas 
A) 2 pounds of bananas 
B) 100 pounds of bananas 
C) 2 pounds of apples 
D) 0.5 of a pound of bananas 
E) 5/12 of a pound of bananas

Question 12

-The above figure shows the production possibility frontier for a country.Suppose the country is producing at point A.What is the opportunity cost of increasing the production of rice to 12 tons?

Accepted Answer

A) 15 thousand bottles of wine 
B) 6 thousand bottles of wine 
C) 9 thousand bottles of wine 
D) 12 tons of rice 
E) Nothing,it is a free lunch. 
A) 15 thousand bottles of wine 
B) 6 thousand bottles of wine 
C) 9 thousand bottles of wine 
D) 12 tons of rice 
E) Nothing,it is a free lunch.

Question 13

-The figure above shows how the PPF for cell phones and new cell-phone factories can expand.In the figure,if the economy chose the point on this year's PPF that is above point K,the next year's PPF would

Accepted Answer

A) shift outward along the horizontal axis farther than the new PPF shown in the figure. 
B) shift outward along the horizontal axis,but not as far as the new PPF shown in the figure. 
C) shift outward along the vertical axis,not along the horizontal axis. 
D) shift inward along the horizontal axis. 
E) shift inward along the vertical axis. 
A) shift outward along the horizontal axis farther than the new PPF shown in the figure. 
B) shift outward along the horizontal axis,but not as far as the new PPF shown in the figure. 
C) shift outward along the vertical axis,not along the horizontal axis. 
D) shift inward along the horizontal axis. 
E) shift inward along the vertical axis.

Question 14

"When a person is more productive in producing a good or service than another person,the first person has the comparative advantage in producing the good." Is this assertion correct or incorrect? Explain your answer.

Accepted Answer

The assertion is incorrect.The statement

Question 15

-Deb and Pete have volunteered to help their favorite charity mail out fundraiser information.The figure above shows their production possibilities frontiers for assembling packets and stuffing envelopes.Which of the following statements is correct?

Accepted Answer

A) Deb has a comparative advantage in assembling packets. 
B) Pete has an absolute advantage in both assembling packets and stuffing envelopes. 
C) Deb has a comparative advantage in stuffing envelopes. 
D) Deb has an absolute advantage in both assembling packets and stuffing envelopes. 
E) Deb has a comparative advantage in both assembling packets and stuffing envelopes. 
A) Deb has a comparative advantage in assembling packets. 
B) Pete has an absolute advantage in both assembling packets and stuffing envelopes. 
C) Deb has a comparative advantage in stuffing envelopes. 
D) Deb has an absolute advantage in both assembling packets and stuffing envelopes. 
E) Deb has a comparative advantage in both assembling packets and stuffing envelopes.

Question 16

Specialization and trade

Accepted Answer

A) does not benefit anyone. 
B) allows nations to produce inside their individual production possibilities frontier. 
C) allows nations to consume combinations of products that are outside their individual production possibilities frontier. 
D) shifts the production possibilities frontier inward. 
E) shifts the production possibilities frontier outward. 
A) does not benefit anyone. 
B) allows nations to produce inside their individual production possibilities frontier. 
C) allows nations to consume combinations of products that are outside their individual production possibilities frontier. 
D) shifts the production possibilities frontier inward. 
E) shifts the production possibilities frontier outward.

Question 17

Scott and Cindy both produce only pizza and tacos.In one hour,Scott can produce 20 pizzas or 40 tacos.In one hour,Cindy can produce 30 pizzas or 40 tacos.Scott's opportunity cost of producing 1 taco is

Accepted Answer

A) 1/2 of a pizza. 
B) 1 pizza. 
C) 2 pizzas. 
D) 20 pizzas. 
E) 2 tacos. 
A) 1/2 of a pizza. 
B) 1 pizza. 
C) 2 pizzas. 
D) 20 pizzas. 
E) 2 tacos.

Question 18

Why is it likely that the United States has an absolute advantage in goods and yet it still ends up importing them from other countries?

Accepted Answer

The United States might have an absolute

Question 19

Rika's opportunity cost of producing 100 t-shirts is 50 jackets.Jeff's opportunity cost of producing 75 t-shirts is 25 jackets.Who should specialize in jackets?

Accepted Answer

A) Rika 
B) Jeff 
C) neither 
D) both 
E) More information is needed about their production possibilities frontiers to determine who should specialize in jackets. 
A) Rika 
B) Jeff 
C) neither 
D) both 
E) More information is needed about their production possibilities frontiers to determine who should specialize in jackets.

Question 20

When economists state that the opportunity cost of a product increases as more of it is produced,what do they mean? For instance,what is the opportunity cost? And,where in a PPF diagram does this statement apply and where does it not apply?

Accepted Answer

In general,the opportunity cost of incre

Points on the PPF are all

To achieve gains from trade,a country

In one hour John can produce 20 loaves of bread or 8 cakes.In one hour Phyllis can produce 30 loaves of bread or 15 cakes.Which of the following statements is true?

-In the table above,how many jackets must Mary forgo for every dress she makes?

Moving from one point to another on a production possibilities frontier implies

-The table above gives four production possibilities for airplanes and cruise ships.In possibility A,how many resources are devoted to the production of cruise ships?

-The figure above shows the production possibilities frontier for a country.If the country is producing at point D,then the

Consider a production possibility frontier with jeans on the vertical axis and shoes on the horizontal axis.As the country moves along the frontier closer to the horizontal axis,

By specializing and trading,a country is able to

On a production possibilities frontier,500 pounds of apples and 1,200 pounds of bananas can be produced while at another point on the same frontier,300 pounds of apples and 1,300 pounds of bananas can be produced.Between these points,what is the opportunity cost of producing a pound of apples?

-The above figure shows the production possibility frontier for a country.Suppose the country is producing at point A.What is the opportunity cost of increasing the production of rice to 12 tons?

-The figure above shows how the PPF for cell phones and new cell-phone factories can expand.In the figure,if the economy chose the point on this year's PPF that is above point K,the next year's PPF would

"When a person is more productive in producing a good or service than another person,the first person has the comparative advantage in producing the good." Is this assertion correct or incorrect? Explain your answer.

-Deb and Pete have volunteered to help their favorite charity mail out fundraiser information.The figure above shows their production possibilities frontiers for assembling packets and stuffing envelopes.Which of the following statements is correct?

Specialization and trade

Scott and Cindy both produce only pizza and tacos.In one hour,Scott can produce 20 pizzas or 40 tacos.In one hour,Cindy can produce 30 pizzas or 40 tacos.Scott's opportunity cost of producing 1 taco is

Why is it likely that the United States has an absolute advantage in goods and yet it still ends up importing them from other countries?

Rika's opportunity cost of producing 100 t-shirts is 50 jackets.Jeff's opportunity cost of producing 75 t-shirts is 25 jackets.Who should specialize in jackets?

When economists state that the opportunity cost of a product increases as more of it is produced,what do they mean? For instance,what is the opportunity cost? And,where in a PPF diagram does this statement apply and where does it not apply?

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

Points on the PPF are all

To achieve gains from trade,a country

In one hour John can produce 20 loaves of bread or 8 cakes.In one hour Phyllis can produce 30 loaves of bread or 15 cakes.Which of the following statements is true?

-In the table above,how many jackets must Mary forgo for every dress she makes?

Moving from one point to another on a production possibilities frontier implies

-The table above gives four production possibilities for airplanes and cruise ships.In possibility A,how many resources are devoted to the production of cruise ships?

-The figure above shows the production possibilities frontier for a country.If the country is producing at point D,then the

Consider a production possibility frontier with jeans on the vertical axis and shoes on the horizontal axis.As the country moves along the frontier closer to the horizontal axis,

By specializing and trading,a country is able to

On a production possibilities frontier,500 pounds of apples and 1,200 pounds of bananas can be produced while at another point on the same frontier,300 pounds of apples and 1,300 pounds of bananas can be produced.Between these points,what is the opportunity cost of producing a pound of apples?

-The above figure shows the production possibility frontier for a country.Suppose the country is producing at point A.What is the opportunity cost of increasing the production of rice to 12 tons?

-The figure above shows how the PPF for cell phones and new cell-phone factories can expand.In the figure,if the economy chose the point on this year's PPF that is above point K,the next year's PPF would

"When a person is more productive in producing a good or service than another person,the first person has the comparative advantage in producing the good." Is this assertion correct or incorrect? Explain your answer.

-Deb and Pete have volunteered to help their favorite charity mail out fundraiser information.The figure above shows their production possibilities frontiers for assembling packets and stuffing envelopes.Which of the following statements is correct?

Specialization and trade

Scott and Cindy both produce only pizza and tacos.In one hour,Scott can produce 20 pizzas or 40 tacos.In one hour,Cindy can produce 30 pizzas or 40 tacos.Scott's opportunity cost of producing 1 taco is

Why is it likely that the United States has an absolute advantage in goods and yet it still ends up importing them from other countries?

Rika's opportunity cost of producing 100 t-shirts is 50 jackets.Jeff's opportunity cost of producing 75 t-shirts is 25 jackets.Who should specialize in jackets?

When economists state that the opportunity cost of a product increases as more of it is produced,what do they mean? For instance,what is the opportunity cost? And,where in a PPF diagram does this statement apply and where does it not apply?

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