Question 1

-Refer to Exhibit 2-9.Who has the comparative advantage in the production of good A?

Accepted Answer

A)   Alex
B)   Adam
C)   Both Alex and Adam
D)   Neither Alex nor AdamE) A) and B)
F) None of the above

Question 2

If there is an increase in the amount of good B foregone as every additional unit of good A is produced,the PPF between goods A and B would

Accepted Answer

A)   be a straight line.
B)   be a bowed-outward curve.
C)   be a bowed-inward curve.
D)   not exist.E) B) and D)
F) None of the above

Question 3

-Refer to Exhibit 2-5.Which of the following labeled points are productive efficient?

Accepted Answer

A)   A,B,C,D,and E
B)   B,C and D only
C)   C only
D)   All of the points are productive efficient.
E)   None of the points are productive efficient.F) All of the above
G) None of the above

Question 4

-Refer to Exhibit 2-7.For which of the following is the statement "In order to get more military goods,we have to forfeit some civilian goods" true?

Accepted Answer

A)   a movement from A to C
B)   a movement from B to D
C)   a movement from F to D
D)   a movement from B to A
E)   none of the aboveF) D) and E)
G) A) and B)

Question 5

Currently an economy is producing at a point on its production possibilities frontier for goods X and Y.It is producing 100 units of good X and the opportunity cost of producing 1X is 3Y.If good X is produced at increasing opportunity costs,then when the economy produces 120 units of good X (on the same PPF) the opportunity cost of producing 1X could be ______Y.

Accepted Answer

A)   4
B)   2.5
C)   2
D)   1
E)   all of the aboveF) All of the above
G) A) and E)

Question 6

With a constant opportunity cost between goods A and B,the PPF for goods A and B would

Accepted Answer

A)   be a straight line.
B)   be a bowed-outward line.
C)   be a bowed-inward line.
D)   not exist.E) C) and D)
F) B) and C)

Question 7

The point where the PPF intersects the horizontal axis is

Accepted Answer

A)   unattainable.
B)   attainable and productive efficient.
C)   attainable but productive inefficient.
D)   attainable and neither productive efficient nor productive inefficient.E) A) and D)
F) A) and C)

Question 8

With respect to a PPF for goods X and Y,productive efficiency implies that in order to produce more of good X there will be a reduction in production of good Y.

Accepted Answer

A) True 
 B)False

Question 9

In a situation where two goods can be produced by two different people,it is possible for one person to have a comparative advantage in the production of both goods and the other person to have the comparative advantage in the production of neither good.

Accepted Answer

A) True 
 B)False

Question 10

-Refer to Exhibit 2-1.If the economy is at point C,it follows that

Accepted Answer

A)   more guns and more butter could be produced with available resources than are currently being produced.
B)   only more guns could be produced with available resources than are currently being produced.
C)   only more butter can be produced with available resources than are currently being produced.
D)   C is an unattainable point.E) B) and C)
F) All of the above

Question 11

Within the production possibilities frontier (PPF) framework,choice is depicted by the

Accepted Answer

A)   PPF itself.
B)   PPF being bowed outward.
C)   need to select among the points making up the PPF.
D)   straight-line PPF.E) A) and D)
F) A) and C)

Question 12

Suppose Andrea is taking just two courses and is at a point on her PPF of grades for those two courses.Now this PPF shifts inward and Andrea moves to a point on the new PPF.Which of the following would be impossible after her PPF has shifted inward compared to before the PPF shifted?

Accepted Answer

A)   both of her grades to fall
B)   both of her grades to rise
C)   one of her grades to rise and the other grade to fall
D)   one of her grades to fall while the other grade stays constantE) A) and B)
F) B) and C)

Question 13

What is the reason for the law of increasing opportunity costs?

Accepted Answer

A)   There is no reason: it is just one of the laws of economics.
B)   Resources have varying abilities and those with lower opportunity costs of producing a good will be used to produce it before resources with higher opportunity costs produce it.
C)   The price of a good rises as more of it is demanded.
D)   As more of a good is produced,the taxes applied to the production of the good rise.
E)   c and dF) All of the above
G) A) and B)

Question 14

Productive efficiency implies

Accepted Answer

A)   the possibility of gains in one area without losses in another.
B)   that more output has been produced.
C)   the impossibility of gains in one area without losses in another.
D)   that prices are stable.
E)   c and dF) B) and E)
G) A) and B)

Question 15

For each additional lamp produced,a constant opportunity cost is incurred in terms of bookshelves.This means that

Accepted Answer

A)   it takes more resources to produce a lamp than a bookshelf.
B)   it takes fewer resources to produce a lamp than a bookshelf.
C)   for every lamp produced,a constant number of bookshelves is forfeited.
D)   for every lamp produced,a different number of bookshelves is forfeited.E) B) and D)
F) C) and D)

Question 16

Consider two straight-line PPFs.They have the same vertical intercept,but curve I is flatter than curve II.The opportunity cost of producing the good on the horizontal axis

Accepted Answer

A)   is greater along curve I.
B)   is greater along curve II.
C)   is the same along both curves.
D)   cannot be compared for the two curves without more information.E) A) and B)
F) B) and D)

Question 17

If the economy is currently producing at a point on its production possibilities frontier (PPF) ,the economy is

Accepted Answer

A)   productive inefficient.
B)   operating with no unemployed resources.
C)   productive efficient.
D)   b and c
E)   none of the aboveF) None of the above
G) A) and E)

Question 18

1 is the relevant production possibilities frontier,society may move to PPF2 as a result of A)  an increase in resources. B)  a decrease in resources. C)  an increase in technology. D)  both a and c E)  both b and c" class="answers-bank-image d-inline" rel="preload" >
-Refer to Exhibit 2-3.If PPF1 is the relevant production possibilities frontier,society may move to PPF2 as a result of

Accepted Answer

A)   an increase in resources.
B)   a decrease in resources.
C)   an increase in technology.
D)   both a and c
E)   both b and cF) A) and E)
G) D) and E)

Question 19

-Refer to Exhibit 2-4.The opportunity cost of moving from point A to point B is

Accepted Answer

A)   60,000 copiers.
B)   40,000 copiers.
C)   20,000 copiers.
D)   20,000 fax machines.
E)   40,000 fax machines.F) A) and B)
G) None of the above

Question 20

-Refer to Exhibit 2-1.The opportunity cost of moving from point B to A is

Accepted Answer

A)   10,000 units of butter.
B)   20,000 units of butter.
C)   50,000 units of guns.
D)   the maximum amount of butter that can be produced with available resources.E) A) and B)
F) None of the above

Exam 2: Production Possibilities Frontier Framework

If the economy is currently producing at a point on its production possibilities frontier (PPF) ,the economy is

Correct Answer
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-Refer to Exhibit 2-7.For which of the following is the statement "In order to get more military goods,we have to forfeit some civilian goods" true?

Correct Answer
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-Refer to Exhibit 2-3.If PPF₁ is the relevant production possibilities frontier,society may move to PPF₂ as a result of

Correct Answer
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Consider two straight-line PPFs.They have the same vertical intercept,but curve I is flatter than curve II.The opportunity cost of producing the good on the horizontal axis

Correct Answer
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-Refer to Exhibit 2-9.Who has the comparative advantage in the production of good A?

Correct Answer
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Suppose Andrea is taking just two courses and is at a point on her PPF of grades for those two courses.Now this PPF shifts inward and Andrea moves to a point on the new PPF.Which of the following would be impossible after her PPF has shifted inward compared to before the PPF shifted?

Correct Answer
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Productive efficiency implies

Correct Answer
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-Refer to Exhibit 2-4.The opportunity cost of moving from point A to point B is

Correct Answer
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What is the reason for the law of increasing opportunity costs?

Correct Answer
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With respect to a PPF for goods X and Y,productive efficiency implies that in order to produce more of good X there will be a reduction in production of good Y.

Correct Answer
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The point where the PPF intersects the horizontal axis is

Correct Answer
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Within the production possibilities frontier (PPF) framework,choice is depicted by the

Correct Answer
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-Refer to Exhibit 2-5.Which of the following labeled points are productive efficient?

Correct Answer
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Correct Answer
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In a situation where two goods can be produced by two different people,it is possible for one person to have a comparative advantage in the production of both goods and the other person to have the comparative advantage in the production of neither good.

Correct Answer
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For each additional lamp produced,a constant opportunity cost is incurred in terms of bookshelves.This means that

Correct Answer
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-Refer to Exhibit 2-1.If the economy is at point C,it follows that

Correct Answer
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-Refer to Exhibit 2-1.The opportunity cost of moving from point B to A is

Correct Answer
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With a constant opportunity cost between goods A and B,the PPF for goods A and B would

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If there is an increase in the amount of good B foregone as every additional unit of good A is produced,the PPF between goods A and B would

Correct Answer
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Exam 2: Production Possibilities Frontier Framework

If the economy is currently producing at a point on its production possibilities frontier (PPF) ,the economy is

Correct AnswerverifiedShow Answer

-Refer to Exhibit 2-7.For which of the following is the statement "In order to get more military goods,we have to forfeit some civilian goods" true?

Correct AnswerverifiedShow Answer

-Refer to Exhibit 2-3.If PPF1 is the relevant production possibilities frontier,society may move to PPF2 as a result of

Correct AnswerverifiedShow Answer

Consider two straight-line PPFs.They have the same vertical intercept,but curve I is flatter than curve II.The opportunity cost of producing the good on the horizontal axis

Correct AnswerverifiedShow Answer

-Refer to Exhibit 2-9.Who has the comparative advantage in the production of good A?

Correct AnswerverifiedShow Answer

Suppose Andrea is taking just two courses and is at a point on her PPF of grades for those two courses.Now this PPF shifts inward and Andrea moves to a point on the new PPF.Which of the following would be impossible after her PPF has shifted inward compared to before the PPF shifted?

Correct AnswerverifiedShow Answer

Productive efficiency implies

Correct AnswerverifiedShow Answer

-Refer to Exhibit 2-4.The opportunity cost of moving from point A to point B is

Correct AnswerverifiedShow Answer

What is the reason for the law of increasing opportunity costs?

Correct AnswerverifiedShow Answer

With respect to a PPF for goods X and Y,productive efficiency implies that in order to produce more of good X there will be a reduction in production of good Y.

Correct AnswerverifiedShow Answer

The point where the PPF intersects the horizontal axis is

Correct AnswerverifiedShow Answer

Within the production possibilities frontier (PPF) framework,choice is depicted by the

Correct AnswerverifiedShow Answer

-Refer to Exhibit 2-5.Which of the following labeled points are productive efficient?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In a situation where two goods can be produced by two different people,it is possible for one person to have a comparative advantage in the production of both goods and the other person to have the comparative advantage in the production of neither good.

Correct AnswerverifiedShow Answer

For each additional lamp produced,a constant opportunity cost is incurred in terms of bookshelves.This means that

Correct AnswerverifiedShow Answer

-Refer to Exhibit 2-1.If the economy is at point C,it follows that

Correct AnswerverifiedShow Answer

-Refer to Exhibit 2-1.The opportunity cost of moving from point B to A is

Correct AnswerverifiedShow Answer

With a constant opportunity cost between goods A and B,the PPF for goods A and B would

Correct AnswerverifiedShow Answer

If there is an increase in the amount of good B foregone as every additional unit of good A is produced,the PPF between goods A and B would

Correct AnswerverifiedShow Answer

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-Refer to Exhibit 2-3.If PPF₁ is the relevant production possibilities frontier,society may move to PPF₂ as a result of

Correct Answer
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