Question 1

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 2

During a time of high unemployment,a country can increase the production of one good or service

Accepted Answer

A)  without decreasing the production of something else. 
B)  but must decrease the production of something else. 
C)  and must increase the production of something else. 
D)  by using resources in the production process twice. 
E)  but the opportunity cost is infinite. 
A)  without decreasing the production of something else. 
B)  but must decrease the production of something else. 
C)  and must increase the production of something else. 
D)  by using resources in the production process twice. 
E)  but the opportunity cost is infinite.

Question 3

A country has a comparative advantage in the production of a good if it can

Accepted Answer

A)  produce more of the good than another country. 
B)  produce more of the good most efficiently. 
C)  produce the good on and remain on its production possibilities frontier. 
D)  tradeoff producing the good for another good. 
E)  produce the good at the lowest opportunity cost. 
A)  produce more of the good than another country. 
B)  produce more of the good most efficiently. 
C)  produce the good on and remain on its production possibilities frontier. 
D)  tradeoff producing the good for another good. 
E)  produce the good at the lowest opportunity cost.

Question 4

Are all points inside the production possibilities frontier unattainable?

Accepted Answer

No,all points within the produ

Question 5

When a production possibilities frontier is bowed outward,as more of one good is produced,its opportunity cost

Accepted Answer

A)  increases. 
B)  decreases. 
C)  remains constant. 
D)  might increase, decrease, or remain constant depending on how much people value the additional units of the good. 
E)  cannot be predicted. 
A)  increases. 
B)  decreases. 
C)  remains constant. 
D)  might increase, decrease, or remain constant depending on how much people value the additional units of the good. 
E)  cannot be predicted.

Question 6

For country Gamma,the opportunity cost for producing 1 computer is 10 tons of steel.For country Beta,the opportunity cost for producing 1 computer is 6 tons of steel.Which country has the comparative advantage in the production of steel?

Accepted Answer

A)  Gamma 
B)  Beta 
C)  Both have the comparative advantage in the production of steel. 
D)  Neither country has the comparative advantage in the production of steel. 
E)  More information is needed to determine which of the two nations has the comparative advantage. 
A)  Gamma 
B)  Beta 
C)  Both have the comparative advantage in the production of steel. 
D)  Neither country has the comparative advantage in the production of steel. 
E)  More information is needed to determine which of the two nations has the comparative advantage.

Question 7

-In the above figure,Jill's opportunity cost of producing 1 gallon of soda is ________ of bottled water.

Accepted Answer

A)  2 gallons 
B)  1/2 of a gallon 
C)  4 gallons 
D)  1 gallon 
E)  1/4 of a gallon 
A)  2 gallons 
B)  1/2 of a gallon 
C)  4 gallons 
D)  1 gallon 
E)  1/4 of a gallon

Question 8

-Which point in the figure above is an attainable combination that would have unemployed resources?

Accepted Answer

A)  point A 
B)  point B 
C)  point C 
D)  point D 
E)  point A and point B 
A)  point A 
B)  point B 
C)  point C 
D)  point D 
E)  point A and point B

Question 9

While moving on the production possibilities frontier,if the opportunity cost of producing one good is 1/2,the opportunity cost of producing the other good (in the same range)is

Accepted Answer

A)  1/2. 
B)  1/4. 
C)  2. 
D)  4. 
E)  An amount that cannot be calculated without more information. 
A)  1/2. 
B)  1/4. 
C)  2. 
D)  4. 
E)  An amount that cannot be calculated without more information.

Question 10

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

Accepted Answer

A)  1 jacket 
B)  16 jackets 
C)  2/3 of a jacket 
D)  1 1/2 jackets 
E)  24 dresses 
A)  1 jacket 
B)  16 jackets 
C)  2/3 of a jacket 
D)  1 1/2 jackets 
E)  24 dresses

Question 11

Which of the following best describes comparative advantage?

Accepted Answer

A)  being able to produce more output than any other country 
B)  using the fewest number of resources to produce a given amount of output 
C)  having the largest number of resources compared to other countries 
D)  forgoing the fewest units of one product to produce a unit of another product 
E)  It is the same as absolute advantage. 
A)  being able to produce more output than any other country 
B)  using the fewest number of resources to produce a given amount of output 
C)  having the largest number of resources compared to other countries 
D)  forgoing the fewest units of one product to produce a unit of another product 
E)  It is the same as absolute advantage.

Question 12

If a country has

Accepted Answer

A)  an absolute advantage in producing a good, it definitely also has a comparative advantage in producing that good. 
B)  an absolute advantage in producing a good, it might or might not have a comparative advantage in producing that good. 
C)  a comparative advantage in production of a good, it must also have an absolute advantage in producing that good. 
D)  an absolute advantage in producing a good, it definitely will not have a comparative advantage in producing that good. 
E)  None of the above answers is correct. 
A)  an absolute advantage in producing a good, it definitely also has a comparative advantage in producing that good. 
B)  an absolute advantage in producing a good, it might or might not have a comparative advantage in producing that good. 
C)  a comparative advantage in production of a good, it must also have an absolute advantage in producing that good. 
D)  an absolute advantage in producing a good, it definitely will not have a comparative advantage in producing that good. 
E)  None of the above answers is correct.

Question 13

A bowed out production possibility frontier shows that the

Accepted Answer

A)  opportunity cost of a good is constant as more of the good is produced. 
B)  opportunity cost of a good decreases as more of the good is produced. 
C)  opportunity cost of a good increases as more of the good is produced. 
D)  opportunity cost relationship is linear. 
E)  opportunity cost of producing another good is negative. 
A)  opportunity cost of a good is constant as more of the good is produced. 
B)  opportunity cost of a good decreases as more of the good is produced. 
C)  opportunity cost of a good increases as more of the good is produced. 
D)  opportunity cost relationship is linear. 
E)  opportunity cost of producing another good is negative.

Question 14

-The figure above illustrates a small country's production possibilities frontier.Moving from point C to point B,the per unit opportunity cost of computers is ________ per computer.

Accepted Answer

A)  4 tablets 
B)  5/4 of a tablet 
C)  4/5 of a tablet 
D)  1/4 of a tablet 
E)  1 computer 
A)  4 tablets 
B)  5/4 of a tablet 
C)  4/5 of a tablet 
D)  1/4 of a tablet 
E)  1 computer

Question 15

How can a nation that is at an absolute disadvantage gain from trade?

Accepted Answer

Being at an absolute disadvantage means

Question 16

If there is increasing opportunity cost,then when moving downward on a production possibilities frontier,the opportunity cost of the good on the horizontal axis ________ as more of the good is produced.

Accepted Answer

A)  increases and the PPF gets steeper 
B)  increases and the PPF gets flatter 
C)  decreases and the PPF gets steeper 
D)  decreases and the PPF gets flatter 
E)  does not change and the PPF gets steeper 
A)  increases and the PPF gets steeper 
B)  increases and the PPF gets flatter 
C)  decreases and the PPF gets steeper 
D)  decreases and the PPF gets flatter 
E)  does not change and the PPF gets steeper

Question 17

If Country A can produce an extra plane by giving up two boats,and Country B can produce an extra plane by giving up three boats,then

Accepted Answer

A)  Country A has a comparative advantage over Country B in the production of planes. 
B)  Country B has a comparative advantage over Country A in the production of planes. 
C)  the two countries have no incentive to trade with one another. 
D)  Country A would like to trade with B, but B cannot gain by trading with A. 
E)  Country A has an absolute advantage in producing planes and a comparative advantage in producing boats. 
A)  Country A has a comparative advantage over Country B in the production of planes. 
B)  Country B has a comparative advantage over Country A in the production of planes. 
C)  the two countries have no incentive to trade with one another. 
D)  Country A would like to trade with B, but B cannot gain by trading with A. 
E)  Country A has an absolute advantage in producing planes and a comparative advantage in producing boats.

Question 18

-The table above gives the production possibilities frontier for two countries,Anaconda and Bear.The opportunity cost of moving from ________ is greater for ________.

Accepted Answer

A)  point A to point B; Anaconda 
B)  point B to point A; Bear 
C)  point D to point E; Bear 
D)  point E to point D; Bear 
E)  any point to any other point; Bear 
A)  point A to point B; Anaconda 
B)  point B to point A; Bear 
C)  point D to point E; Bear 
D)  point E to point D; Bear 
E)  any point to any other point; Bear

Question 19

In the production possibilities frontier model,an unattainable point lies

Accepted Answer

A)  only on the production possibilities frontier itself. 
B)  only inside the production possibilities frontier. 
C)  only outside the production possibilities frontier. 
D)  both on and outside the production possibilities frontier. 
E)  There are no unattainable points in the production possibilities model. 
A)  only on the production possibilities frontier itself. 
B)  only inside the production possibilities frontier. 
C)  only outside the production possibilities frontier. 
D)  both on and outside the production possibilities frontier. 
E)  There are no unattainable points in the production possibilities model.

Question 20

Production efficiency is represented by ________ a production possibilities frontier.

Accepted Answer

A)  all points on 
B)  all points inside 
C)  all points outside 
D)  a movement along 
E)  only one point on 
A)  all points on 
B)  all points inside 
C)  all points outside 
D)  a movement along 
E)  only one point on

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

During a time of high unemployment,a country can increase the production of one good or service

A country has a comparative advantage in the production of a good if it can

Are all points inside the production possibilities frontier unattainable?

When a production possibilities frontier is bowed outward,as more of one good is produced,its opportunity cost

For country Gamma,the opportunity cost for producing 1 computer is 10 tons of steel.For country Beta,the opportunity cost for producing 1 computer is 6 tons of steel.Which country has the comparative advantage in the production of steel?

-In the above figure,Jill's opportunity cost of producing 1 gallon of soda is ________ of bottled water.

-Which point in the figure above is an attainable combination that would have unemployed resources?

While moving on the production possibilities frontier,if the opportunity cost of producing one good is 1/2,the opportunity cost of producing the other good (in the same range)is

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

Which of the following best describes comparative advantage?

If a country has

A bowed out production possibility frontier shows that the

-The figure above illustrates a small country's production possibilities frontier.Moving from point C to point B,the per unit opportunity cost of computers is ________ per computer.

How can a nation that is at an absolute disadvantage gain from trade?

If there is increasing opportunity cost,then when moving downward on a production possibilities frontier,the opportunity cost of the good on the horizontal axis ________ as more of the good is produced.

If Country A can produce an extra plane by giving up two boats,and Country B can produce an extra plane by giving up three boats,then

-The table above gives the production possibilities frontier for two countries,Anaconda and Bear.The opportunity cost of moving from is greater for .

In the production possibilities frontier model,an unattainable point lies

Production efficiency is represented by ________ a production possibilities frontier.

Getting Started

The U.S.and Global Economies

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 3: The Economic Problem

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

During a time of high unemployment,a country can increase the production of one good or service

A country has a comparative advantage in the production of a good if it can

Are all points inside the production possibilities frontier unattainable?

When a production possibilities frontier is bowed outward,as more of one good is produced,its opportunity cost

For country Gamma,the opportunity cost for producing 1 computer is 10 tons of steel.For country Beta,the opportunity cost for producing 1 computer is 6 tons of steel.Which country has the comparative advantage in the production of steel?

-In the above figure,Jill's opportunity cost of producing 1 gallon of soda is ________ of bottled water.

-Which point in the figure above is an attainable combination that would have unemployed resources?

While moving on the production possibilities frontier,if the opportunity cost of producing one good is 1/2,the opportunity cost of producing the other good (in the same range)is

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

Which of the following best describes comparative advantage?

If a country has

A bowed out production possibility frontier shows that the

-The figure above illustrates a small country's production possibilities frontier.Moving from point C to point B,the per unit opportunity cost of computers is ________ per computer.

How can a nation that is at an absolute disadvantage gain from trade?

If there is increasing opportunity cost,then when moving downward on a production possibilities frontier,the opportunity cost of the good on the horizontal axis ________ as more of the good is produced.

If Country A can produce an extra plane by giving up two boats,and Country B can produce an extra plane by giving up three boats,then

-The table above gives the production possibilities frontier for two countries,Anaconda and Bear.The opportunity cost of moving from ________ is greater for ________.

In the production possibilities frontier model,an unattainable point lies

Production efficiency is represented by ________ a production possibilities frontier.

Getting Started

The U.S.and Global Economies

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

-The table above gives the production possibilities frontier for two countries,Anaconda and Bear.The opportunity cost of moving from is greater for .