Question 1

-The above figure shows the production possibility frontier for a country.What is the opportunity cost to move from point D to point E?

Accepted Answer

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

Question 2

The production possibilities frontier is the

Accepted Answer

A)  maximum output that can be produced at an opportunity cost of zero. 
B)  minimum output that can be produced when resources are used inefficiently. 
C)  boundary between the combinations of goods and services that can be produced and the combinations that cannot be produced, given the available factors of production and the state of technology. 
D)  boundary between the combinations of goods and services that can be produced and the combinations that cannot be produced when technology is changing. 
E)  maximum opportunity cost combinations of goods and services. 
A)  maximum output that can be produced at an opportunity cost of zero. 
B)  minimum output that can be produced when resources are used inefficiently. 
C)  boundary between the combinations of goods and services that can be produced and the combinations that cannot be produced, given the available factors of production and the state of technology. 
D)  boundary between the combinations of goods and services that can be produced and the combinations that cannot be produced when technology is changing. 
E)  maximum opportunity cost combinations of goods and services.

Question 3

-The figure above shows the production possibilities frontier for a country.The opportunity cost of a gallon of milk between combination point A and B is

Accepted Answer

A)  4 gallons of ice cream for a gallon of milk. 
B)  3 gallons of ice cream for a gallon of milk. 
C)  1 gallon of ice cream for a gallon of milk. 
D)  1/3 of a gallon of ice cream for a gallon of milk. 
E)  zero because at point A zero milk is being produced. 
A)  4 gallons of ice cream for a gallon of milk. 
B)  3 gallons of ice cream for a gallon of milk. 
C)  1 gallon of ice cream for a gallon of milk. 
D)  1/3 of a gallon of ice cream for a gallon of milk. 
E)  zero because at point A zero milk is being produced.

Question 4

-The figure above shows the production possibilities frontier for a country.A combination of 4 million gallons of milk and 4 million gallons of ice cream is

Accepted Answer

A)  unattainable. 
B)  attainable and production efficient. 
C)  attainable and production inefficient. 
D)  unattainable and production efficient. 
E)  More information is needed to determine if the point is attainable or not. 
A)  unattainable. 
B)  attainable and production efficient. 
C)  attainable and production inefficient. 
D)  unattainable and production efficient. 
E)  More information is needed to determine if the point is attainable or not.

Question 5

-The above figure shows the production possibility frontier for a country.Suppose the country is producing at point D.What would be the opportunity cost to move to point C?

Accepted Answer

A)  6 thousand bottles of wine 
B)  15 thousand bottles of wine 
C)  12 tons of rice 
D)  Nothing, it is a free lunch. 
E)  This movement is not possible without economic growth. 
A)  6 thousand bottles of wine 
B)  15 thousand bottles of wine 
C)  12 tons of rice 
D)  Nothing, it is a free lunch. 
E)  This movement is not possible without economic growth.

Question 6

-The above figure shows the PPF for a country that produces computers and computer factories.Which of the following would most likely shift the PPF from PPF? in one year to PPF? in the next?

Accepted Answer

A)  Nothing, because the PPF does not shift. 
B)  Increase the production of computers from 9 million (at point C.) to 11 million (at point B.) 
C)  Decrease the production of computers from 11 million (at point 
A)  Nothing, because the PPF does not shift. 
B)  Increase the production of computers from 9 million (at point C.) to 11 million (at point B.) 
C)  Decrease the production of computers from 11 million (at point

Question 7

As we move along the production possibilities frontier,

Accepted Answer

A)  the production of one good increases as the production of the other good decreases. 
B)  the possibilities of tradeoffs diminish. 
C)  a tradeoff is not possible because nations need all goods. 
D)  more of both goods can be produced. 
E)  less of both goods can be produced. 
A)  the production of one good increases as the production of the other good decreases. 
B)  the possibilities of tradeoffs diminish. 
C)  a tradeoff is not possible because nations need all goods. 
D)  more of both goods can be produced. 
E)  less of both goods can be produced.

Question 8

-The table above shows a nation's production possibilities frontier.If the nation chooses to increase the production of robots from 2 to 3 and it is on its PPF,it will have to forgo ________ pizzas.

Accepted Answer

A)  37 
B)  34 
C)  3 
D)  35.5 
E)  None of the above answers is correct. 
A)  37 
B)  34 
C)  3 
D)  35.5 
E)  None of the above answers is correct.

Question 9

-The figure above illustrates a small country's production possibilities frontier.Based on the figure,we can tell that the nation's resources are

Accepted Answer

A)  equally productive in all tasks because the slope is negative. 
B)  equally productive in all tasks because the production possibilities frontier is bowed out. 
C)  not equally productive in all tasks because the slope is negative. 
D)  not equally productive in all tasks because the production possibilities frontier is bowed out. 
E)  unlimited because the slope is negative and the PPF is bowed out. 
A)  equally productive in all tasks because the slope is negative. 
B)  equally productive in all tasks because the production possibilities frontier is bowed out. 
C)  not equally productive in all tasks because the slope is negative. 
D)  not equally productive in all tasks because the production possibilities frontier is bowed out. 
E)  unlimited because the slope is negative and the PPF is bowed out.

Question 10

What does the vertical intercept of a production possibilities frontier represent?

Accepted Answer

The vertical intercept is the

Question 11

In a production possibilities frontier graph,the cost of producing more units of a good is measured by the

Accepted Answer

A)  dollar value of the resources used to produce the good. 
B)  amount of the other good or service that must be forgone. 
C)  dollar value of the additional output. 
D)  area in the arc between the PPF and a straight line drawn between the starting point and the ending point. 
E)  None of the above answers is correct. 
A)  dollar value of the resources used to produce the good. 
B)  amount of the other good or service that must be forgone. 
C)  dollar value of the additional output. 
D)  area in the arc between the PPF and a straight line drawn between the starting point and the ending point. 
E)  None of the above answers is correct.

Question 12

-The figure above represents the production possibilities frontier for a country.
a.The nation is currently producing at point B and wants to move to point C.What is the opportunity cost of the move?
b.The nation is currently producing at point B and wants to move to point A.What is the opportunity cost of the move?
c.The nation is currently producing at point D and wants to move to point B.What is the opportunity cost of the move?

Accepted Answer

a.By moving from point B to point C,the

Question 13

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 14

Economic growth depends upon which of the following?
i.Increasing the quantity of labor
ii.Lowering the prices of goods and services
iii.Advancing technology

Accepted Answer

A)  i only 
B)  ii only 
C)  iii only 
D)  i and iii 
E)  i, ii, and iii 
A)  i only 
B)  ii only 
C)  iii only 
D)  i and iii 
E)  i, ii, and iii

Question 15

-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 16

As an economy moves down along a straight line production possibilities frontier,what happens to the opportunity cost of producing the good on the horizontal axis?

Accepted Answer

A)  It remains constant. 
B)  It decreases. 
C)  It increases. 
D)  Above the midpoint it decreases until it equals 1 at the midpoint and then it increases. 
E)  None of these depicts what happens to opportunity cost. 
A)  It remains constant. 
B)  It decreases. 
C)  It increases. 
D)  Above the midpoint it decreases until it equals 1 at the midpoint and then it increases. 
E)  None of these depicts what happens to opportunity cost.

Question 17

Production possibilities frontiers usually curve out and away from the origin.The implication is

Accepted Answer

A)  that as resources are used to produce one good, fewer resources are available to produce another good. 
B)  that the opportunity cost of producing a good goes down as more of that good is produced. 
C)  technological change is present. 
D)  that the opportunity cost of producing a good stays the same regardless of how much of that good is produced. 
E)  some resources are better at producing one good while other resources are better at producing alternative goods. 
A)  that as resources are used to produce one good, fewer resources are available to produce another good. 
B)  that the opportunity cost of producing a good goes down as more of that good is produced. 
C)  technological change is present. 
D)  that the opportunity cost of producing a good stays the same regardless of how much of that good is produced. 
E)  some resources are better at producing one good while other resources are better at producing alternative goods.

Question 18

David takes 10 minutes to process a customer,and 20 minutes to stock the shelves.Danny takes 15 minutes to process a customer,and 15 minutes to stock the shelves.Which of the following statements is true?

Accepted Answer

A)  David has an absolute advantage in performing both tasks. 
B)  Danny has an absolute advantage in performing both tasks. 
C)  David has a comparative advantage in processing customers but not in stocking shelves. 
D)  Danny has a comparative advantage in processing customers but not in stocking shelves. 
E)  Danny has a comparative advantage in processing customers and in stocking shelves. 
A)  David has an absolute advantage in performing both tasks. 
B)  Danny has an absolute advantage in performing both tasks. 
C)  David has a comparative advantage in processing customers but not in stocking shelves. 
D)  Danny has a comparative advantage in processing customers but not in stocking shelves. 
E)  Danny has a comparative advantage in processing customers and in stocking shelves.

Question 19

A point on the production possibilities frontier reflects an

Accepted Answer

A)  attainable point with full employment of all resources. 
B)  attainable point without full employment of all resources. 
C)  unattainable point with full employment of all resources. 
D)  unattainable point without full employment of all resources. 
E)  None of the above answers is correct. 
A)  attainable point with full employment of all resources. 
B)  attainable point without full employment of all resources. 
C)  unattainable point with full employment of all resources. 
D)  unattainable point without full employment of all resources. 
E)  None of the above answers is correct.

Question 20

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.

-The above figure shows the production possibility frontier for a country.What is the opportunity cost to move from point D to point E?

The production possibilities frontier is the

-The figure above shows the production possibilities frontier for a country.The opportunity cost of a gallon of milk between combination point A and B is

-The figure above shows the production possibilities frontier for a country.A combination of 4 million gallons of milk and 4 million gallons of ice cream is

-The above figure shows the production possibility frontier for a country.Suppose the country is producing at point D.What would be the opportunity cost to move to point C?

-The above figure shows the PPF for a country that produces computers and computer factories.Which of the following would most likely shift the PPF from PPF? in one year to PPF? in the next?

As we move along the production possibilities frontier,

-The table above shows a nation's production possibilities frontier.If the nation chooses to increase the production of robots from 2 to 3 and it is on its PPF,it will have to forgo ________ pizzas.

-The figure above illustrates a small country's production possibilities frontier.Based on the figure,we can tell that the nation's resources are

What does the vertical intercept of a production possibilities frontier represent?

In a production possibilities frontier graph,the cost of producing more units of a good is measured by the

Specialization and trade

Economic growth depends upon which of the following? i.Increasing the quantity of labor ii.Lowering the prices of goods and services iii.Advancing technology

-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?

As an economy moves down along a straight line production possibilities frontier,what happens to the opportunity cost of producing the good on the horizontal axis?

Production possibilities frontiers usually curve out and away from the origin.The implication is

David takes 10 minutes to process a customer,and 20 minutes to stock the shelves.Danny takes 15 minutes to process a customer,and 15 minutes to stock the shelves.Which of the following statements is true?

A point on the production possibilities frontier reflects an

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

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

-The above figure shows the production possibility frontier for a country.What is the opportunity cost to move from point D to point E?

The production possibilities frontier is the

-The figure above shows the production possibilities frontier for a country.The opportunity cost of a gallon of milk between combination point A and B is

-The figure above shows the production possibilities frontier for a country.A combination of 4 million gallons of milk and 4 million gallons of ice cream is

-The above figure shows the production possibility frontier for a country.Suppose the country is producing at point D.What would be the opportunity cost to move to point C?

-The above figure shows the PPF for a country that produces computers and computer factories.Which of the following would most likely shift the PPF from PPF? in one year to PPF? in the next?

As we move along the production possibilities frontier,

-The table above shows a nation's production possibilities frontier.If the nation chooses to increase the production of robots from 2 to 3 and it is on its PPF,it will have to forgo ________ pizzas.

-The figure above illustrates a small country's production possibilities frontier.Based on the figure,we can tell that the nation's resources are

What does the vertical intercept of a production possibilities frontier represent?

In a production possibilities frontier graph,the cost of producing more units of a good is measured by the

Specialization and trade

Economic growth depends upon which of the following? i.Increasing the quantity of labor ii.Lowering the prices of goods and services iii.Advancing technology

-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?

As an economy moves down along a straight line production possibilities frontier,what happens to the opportunity cost of producing the good on the horizontal axis?

Production possibilities frontiers usually curve out and away from the origin.The implication is

David takes 10 minutes to process a customer,and 20 minutes to stock the shelves.Danny takes 15 minutes to process a customer,and 15 minutes to stock the shelves.Which of the following statements is true?

A point on the production possibilities frontier reflects an

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

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