Question 1

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 2

If there is unemployment in an economy,then the

Accepted Answer

A)  production possibilities frontier will shift inwards. 
B)  economy is operating at an unattainable point. 
C)  production possibilities frontier will shift outwards. 
D)  economy is producing at a point inside the production possibilities frontier. 
E)  production possibilities frontier must be bowed inward. 
A)  production possibilities frontier will shift inwards. 
B)  economy is operating at an unattainable point. 
C)  production possibilities frontier will shift outwards. 
D)  economy is producing at a point inside the production possibilities frontier. 
E)  production possibilities frontier must be bowed inward.

Question 3

If the production possibilities frontier between bottled water and water in a jug is a straight line,which of the following statements would be correct?

Accepted Answer

A)  A large amount of unemployment must exist. 
B)  Resources are equally productive at producing either product. 
C)  There is no tradeoff between the two goods. 
D)  There is no decrease in the production of one good when the production of the other is increased. 
E)  Producing more of one good gives the economy a free lunch. 
A)  A large amount of unemployment must exist. 
B)  Resources are equally productive at producing either product. 
C)  There is no tradeoff between the two goods. 
D)  There is no decrease in the production of one good when the production of the other is increased. 
E)  Producing more of one good gives the economy a free lunch.

Question 4

Moving along a country's PPF,a reason opportunity costs increase is that

Accepted Answer

A)  unemployment decreases as a country produces more and more of one good. 
B)  unemployment increases as a country produces more and more of one good. 
C)  technology declines as a country produces more and more of one good. 
D)  some resources are better suited for producing one good rather than the other. 
E)  technology must advance in order to produce more and more of one good. 
A)  unemployment decreases as a country produces more and more of one good. 
B)  unemployment increases as a country produces more and more of one good. 
C)  technology declines as a country produces more and more of one good. 
D)  some resources are better suited for producing one good rather than the other. 
E)  technology must advance in order to produce more and more of one good.

Question 5

-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 are 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 are correct because it is not possible to produce at point D.

Question 6

Moving from a point inside the production possibilities frontier to a point on the production possibilities frontier,the opportunity cost of producing more of the good on the horizontal axis

Accepted Answer

A)  increases. 
B)  decreases. 
C)  is constant. 
D)  is 0. 
E)  is infinite. 
A)  increases. 
B)  decreases. 
C)  is constant. 
D)  is 0. 
E)  is infinite.

Question 7

-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,Steve has a comparative advantage in

Accepted Answer

A)  both potatoes and tomatoes. 
B)  neither potatoes nor tomatoes. 
C)  potatoes. 
D)  tomatoes. 
E)  More information is needed about Huey's comparative advantage in order to determine Steve's comparative advantage. 
A)  both potatoes and tomatoes. 
B)  neither potatoes nor tomatoes. 
C)  potatoes. 
D)  tomatoes. 
E)  More information is needed about Huey's comparative advantage in order to determine Steve's comparative advantage.

Question 8

The negative slope of the production possibilities frontier represents the idea

Accepted Answer

A)  that free lunches are possible. 
B)  of tradeoffs, that in order to produce more of one good, the nation must produce less of another. 
C)  of unemployment. 
D)  of inefficient production. 
E)  that prices rise as less is produced. 
A)  that free lunches are possible. 
B)  of tradeoffs, that in order to produce more of one good, the nation must produce less of another. 
C)  of unemployment. 
D)  of inefficient production. 
E)  that prices rise as less is produced.

Question 9

If John can produce 10 chairs or 20 lamps during a week while Mary can produce 12 chairs or 22 lamps in the same time,who has the absolute advantage in producing each good?

Accepted Answer

A)  Mary in producing both goods 
B)  John in producing both goods 
C)  Mary in producing chairs, John in producing lamps 
D)  John in producing chairs, Mary in producing lamps 
E)  Both Mary and John in both goods 
A)  Mary in producing both goods 
B)  John in producing both goods 
C)  Mary in producing chairs, John in producing lamps 
D)  John in producing chairs, Mary in producing lamps 
E)  Both Mary and John in both goods

Question 10

"When a person has an absolute advantage in producing a good,the person necessarily has a lower opportunity cost of producing it." Is this assertion correct or incorrect?

Accepted Answer

The assertion is incorrect.An absolute a

Question 11

The opportunity cost of economic growth is

Accepted Answer

A)  0, because it means an expansion of production possibilities. 
B)  the decrease in the current production of productive factors. 
C)  a slower accumulation of human capital. 
D)  the decrease in the current production of consumption goods. 
E)  the increase in the nation's capital stock and/or its technology. 
A)  0, because it means an expansion of production possibilities. 
B)  the decrease in the current production of productive factors. 
C)  a slower accumulation of human capital. 
D)  the decrease in the current production of consumption goods. 
E)  the increase in the nation's capital stock and/or its technology.

Question 12

The production possibilities frontier is a boundary that separates

Accepted Answer

A)  the combinations of goods that can be produced from the combinations of services. 
B)  attainable combinations of goods and services that can be produced from unattainable ones. 
C)  equitable combinations of goods and services that can be produced from inequitable ones. 
D)  fair combinations of goods and services that can be consumed from unfair ones. 
E)  affordable production points from unaffordable points. 
A)  the combinations of goods that can be produced from the combinations of services. 
B)  attainable combinations of goods and services that can be produced from unattainable ones. 
C)  equitable combinations of goods and services that can be produced from inequitable ones. 
D)  fair combinations of goods and services that can be consumed from unfair ones. 
E)  affordable production points from unaffordable points.

Question 13

To find the opportunity cost of producing one more unit of any product while on the production possibilities frontier requires

Accepted Answer

A)  setting the amounts of the two products equal to each other. 
B)  setting the change in one product equal to the change in the other product. 
C)  dividing the amount of the product forgone by the amount of the product gained. 
D)  subtracting the change in the product whose production increased from the change in the product whose production decreased. 
E)  None of these describe how to find opportunity cost. 
A)  setting the amounts of the two products equal to each other. 
B)  setting the change in one product equal to the change in the other product. 
C)  dividing the amount of the product forgone by the amount of the product gained. 
D)  subtracting the change in the product whose production increased from the change in the product whose production decreased. 
E)  None of these describe how to find opportunity cost.

Question 14

-The table above shows a nation's production possibilities frontier.If the nation wants to produce 4 robots and 34 pizzas,

Accepted Answer

A)  it will shift the production possibilities frontier. 
B)  the opportunity cost is 9 pizzas. 
C)  the nation will be producing inefficiently. 
D)  it will be unable to do so because the production point is unattainable. 
E)  the nation will then be producing at a production efficient point. 
A)  it will shift the production possibilities frontier. 
B)  the opportunity cost is 9 pizzas. 
C)  the nation will be producing inefficiently. 
D)  it will be unable to do so because the production point is unattainable. 
E)  the nation will then be producing at a production efficient point.

Question 15

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

Accepted Answer

A)  3000 bottles of wine 
B)  333 bottles of wine 
C)  3 bottles of wine 
D)  1/3 of a bottle of wine 
E)  None of the above answers is correct. 
A)  3000 bottles of wine 
B)  333 bottles of wine 
C)  3 bottles of wine 
D)  1/3 of a bottle of wine 
E)  None of the above answers is correct.

Question 16

-The table above presents the production possibilities frontier for a nation.Using the information in the table,moving from possibility C to B means that

Accepted Answer

A)  4 units of capital goods are given up to get 55 units of consumption goods. 
B)  2 units of capital goods are given up to get 55 additional units of consumption goods. 
C)  4 units of capital goods are given up to get 10 additional units of consumption goods. 
D)  4 units of capital goods are given up to get 45 units of consumption goods. 
E)  2 units of capital goods are given up to get 10 additional units of consumption goods. 
A)  4 units of capital goods are given up to get 55 units of consumption goods. 
B)  2 units of capital goods are given up to get 55 additional units of consumption goods. 
C)  4 units of capital goods are given up to get 10 additional units of consumption goods. 
D)  4 units of capital goods are given up to get 45 units of consumption goods. 
E)  2 units of capital goods are given up to get 10 additional units of consumption goods.

Question 17

Other things equal,if Mexico devotes more resources to train its population than Spain,

Accepted Answer

A)  Mexico will be able to eliminate opportunity cost faster than Spain. 
B)  Mexico will be able to eliminate scarcity faster than Spain. 
C)  Spain will grow faster than Mexico. 
D)  Mexico will have more current consumption than Spain. 
E)  Mexico will grow faster than Spain. 
A)  Mexico will be able to eliminate opportunity cost faster than Spain. 
B)  Mexico will be able to eliminate scarcity faster than Spain. 
C)  Spain will grow faster than Mexico. 
D)  Mexico will have more current consumption than Spain. 
E)  Mexico will grow faster than Spain.

Question 18

In the movie Cast Away,Tom Hanks plays a FedEx efficiency expert stranded on a deserted island.While on the island,he divides his time between catching fish,gathering coconuts,painting,and building a raft.Suppose that these were Mr.Hanks' only activities.Did he face an opportunity cost from pursuing any of these activities? Why or why not?

Accepted Answer

Yes,Mr.Hanks faces an opportunity cost f

Question 19

-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 20

The bowed out (concave)shape of the production possibilities curve implies that as production of one good

Accepted Answer

A)  increases, society must forgo increasing amounts of another good. 
B)  increases, society must forgo decreasing amounts of another good. 
C)  decreases, production of other goods decreases as well. 
D)  increases, production of other goods increases as well. 
E)  increases, society can obtain a free lunch. 
A)  increases, society must forgo increasing amounts of another good. 
B)  increases, society must forgo decreasing amounts of another good. 
C)  decreases, production of other goods decreases as well. 
D)  increases, production of other goods increases as well. 
E)  increases, society can obtain a free lunch.

What is the opportunity cost of economic growth?

If there is unemployment in an economy,then the

If the production possibilities frontier between bottled water and water in a jug is a straight line,which of the following statements would be correct?

Moving along a country's PPF,a reason opportunity costs increase is that

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

Moving from a point inside the production possibilities frontier to a point on the production possibilities frontier,the opportunity cost of producing more of the good on the horizontal axis

-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,Steve has a comparative advantage in

The negative slope of the production possibilities frontier represents the idea

If John can produce 10 chairs or 20 lamps during a week while Mary can produce 12 chairs or 22 lamps in the same time,who has the absolute advantage in producing each good?

"When a person has an absolute advantage in producing a good,the person necessarily has a lower opportunity cost of producing it." Is this assertion correct or incorrect?

The opportunity cost of economic growth is

The production possibilities frontier is a boundary that separates

To find the opportunity cost of producing one more unit of any product while on the production possibilities frontier requires

-The table above shows a nation's production possibilities frontier.If the nation wants to produce 4 robots and 34 pizzas,

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

-The table above presents the production possibilities frontier for a nation.Using the information in the table,moving from possibility C to B means that

Other things equal,if Mexico devotes more resources to train its population than Spain,

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

The bowed out (concave)shape of the production possibilities curve implies that as production of one good

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

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Exam 3: The Economic Problem

What is the opportunity cost of economic growth?

If there is unemployment in an economy,then the

If the production possibilities frontier between bottled water and water in a jug is a straight line,which of the following statements would be correct?

Moving along a country's PPF,a reason opportunity costs increase is that

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

Moving from a point inside the production possibilities frontier to a point on the production possibilities frontier,the opportunity cost of producing more of the good on the horizontal axis

-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,Steve has a comparative advantage in

The negative slope of the production possibilities frontier represents the idea

If John can produce 10 chairs or 20 lamps during a week while Mary can produce 12 chairs or 22 lamps in the same time,who has the absolute advantage in producing each good?

"When a person has an absolute advantage in producing a good,the person necessarily has a lower opportunity cost of producing it." Is this assertion correct or incorrect?

The opportunity cost of economic growth is

The production possibilities frontier is a boundary that separates

To find the opportunity cost of producing one more unit of any product while on the production possibilities frontier requires

-The table above shows a nation's production possibilities frontier.If the nation wants to produce 4 robots and 34 pizzas,

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

-The table above presents the production possibilities frontier for a nation.Using the information in the table,moving from possibility C to B means that

Other things equal,if Mexico devotes more resources to train its population than Spain,

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

The bowed out (concave)shape of the production possibilities curve implies that as production of one good

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