Question 1

Jose has one evening in which to prepare for two exams and can employ one of two possible strategies:  The opportunity cost of receiving a 92 on the statistics exam is __________ points on the economics exam.

Accepted Answer

A)  12
B)  11
C)  16
D)  77 C

Question 2

Exhibit 2-5
 
-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.

Question 3

Which of the following statements is false?

Accepted Answer

A)  If there are only two goods, guns and butter, it is possible to produce more of both goods through economic growth.
B)  If there are only two goods, guns and butter, it is possible to produce more of both goods if the economy is currently operating at a productive inefficient point.
C)  If there are only two goods, guns and butter, it is possible to produce more of both goods if the economy is currently operating at a productive efficient point.
D)  If there are only two goods, guns and butter, producing more of one means producing less of the other if the economy is currently operating at a productive efficient point.

Question 4

An increase in the quantity of resources available

Accepted Answer

A)  shifts the PPF leftward.
B)  shifts the PPF rightward.
C)  moves the economy to a new point up along a given PPF.
D)  moves the economy to a new point down along a given PPF.

Question 5

A PPF is a straight line as a result of

Accepted Answer

A)  constant opportunity costs.
B)  increasing opportunity costs.
C)  decreasing opportunity costs.
D)  scarcity.
E)  choice.

Question 6

Exhibit 2-8
 
-Refer to Exhibit 2-8. If Maria and Maya each specialize in the good in which she has a comparative advantage and then engage in trade, ____________________ can consume a combination of goods that lies beyond her PPF.

Accepted Answer

A)  Maria, but not Maya,
B)  Maya, but not Maria,
C)  both Maria and Maya
D)  neither Maria nor Maya

Question 7

Exhibit 2-9
 
-Refer to Exhibit 2-9. If Alex and Adam each specialize in the good in which he has a comparative advantage and then engage in trade, ____________________ can consume a combination of goods that lies beyond their PPF.

Accepted Answer

A)  Alex, but not Adam,
B)  Adam, but not Alex
C)  Alex and Adam
D)  neither Alex nor Adam

Question 8

Exhibit 2-7
 1. B) inefficient if the economy's PPF is PPF2. C) attainable if the economy's PPF is PPF2. D) all of the above E) none of the above" class="answers-bank-image d-inline" rel="preload" >
-Refer to Exhibit 2-7. Point F is

Accepted Answer

A)  unattainable if the economy's PPF is PPF1.
B)  inefficient if the economy's PPF is PPF2.
C)  attainable if the economy's PPF is PPF2.
D)  all of the above
E)  none of the above

Question 9

If the law of increasing opportunity costs is operable, and currently the opportunity cost of producing the 101st unit of good X is 5Y, then the opportunity cost of producing the 201st unit of good is X is

Accepted Answer

A)  less than 5Y.
B)  greater than 1/5Y but less than 5Y.
C)  greater than 5Y.
D)  less than 1/5Y but more than zero.

Question 10

Give a definition of an advance in technology. Suppose that you are drawing a PPF for civilian goods and military goods, describe the effect on the PPF of an advance in technology in both civilian goods and military goods. How would the impact on the PPF be different if the technological improvement only helped in the production of military goods, but not civilian goods?

Accepted Answer

An advance in technology commonly refers to the ability to produce more output with a fixed amount of resources (or the same amount of output with a smaller amount of resources). When technology advances in the production of both products the PPF shifts outward. When technology advances in the production of military goods, but not civilian goods, the PPF shifts outward along the axis for military goods and the intercept remains constant along the axis for civilian goods.

Question 11

An economy is productive efficient if it produces

Accepted Answer

A)  more than enough food to feed everyone.
B)  more goods and services in each successive year.
C)  maximum output with given resources and technology.
D)  enough output so that no one lives in poverty. C

Question 12

Exhibit 2-1
 
-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.

Question 13

A decrease in the quantity of resources available causes a movement from one point on a given PPF to another point along the same PPF.

Accepted Answer

A) True 
 B)False

Question 14

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.

Question 15

Which of the following is not true about production possibilities frontiers?

Accepted Answer

A)  moving from one point to another on a PPF incurs a tradeoff
B)  economic growth is shown by shifting the PPF outward
C)  unemployment of resources is shown by shifting the PPF inward
D)  a PPF can shift inward or outward

Question 16

Which of the following statements is true?

Accepted Answer

A)  Productive inefficiency implies that it is possible to produce more of one good and no less of another, but only if additional resources are made available.
B)  Productive efficiency implies that it is possible to produce more of one good and no less of another, even without additional resources.
C)  Productive inefficiency implies that it is impossible to produce more of one good and no less of another.
D)  Productive inefficiency implies that it is possible to produce more of one good and no less of another, even without additional resources.

Question 17

A decrease in unemployment causes the PPF to shift outward (to the right).

Accepted Answer

A) True 
 B)False

Question 18

If a production possibilities frontier (PPF)  is concave outward, it follows that

Accepted Answer

A)  opportunity costs are constant between two goods.
B)  the opportunity cost (of producing the good on the horizontal axis)  rises as more of the good is produced.
C)  the opportunity cost (of producing the good on the horizontal axis)  falls as more of the good is produced.
D)  the opportunity cost (of producing the good on the horizontal axis)  first rises and then falls as more of the good is produced.
E)  none of the above

Question 19

Exhibit 2-8
 
-Refer to Exhibit 2-8. For Maria, the opportunity cost of producing one unit of good Y is ___________ unit(s)  of good X.

Accepted Answer

A)  2.00
B)  1.00
C)  10.00
D)  0.50

Question 20

Consider the following combinations of guns and butter that can be produced: 0 guns, 20,000 units of butter; 5,000 guns, 15,000 units of butter; 10,000 guns, 10,000 units of butter; 15,000 guns, 5,000 units of butter; 20,000 guns, 0 units of butter. The PPF between guns and butter is

Accepted Answer

A)  a downward-sloping bowed-out curve.
B)  a downward-sloping straight line.
C)  an upward-sloping straight line.
D)  It is impossible to answer this question without knowing which good would be plotted on the vertical axis.

Exam 2: Production Possibilities Frontier Framework

Jose has one evening in which to prepare for two exams and can employ one of two possible strategies: The opportunity cost of receiving a 92 on the statistics exam is __________ points on the economics exam.

Correct Answer
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C

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

Correct Answer
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Which of the following statements is false?

Correct Answer
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An increase in the quantity of resources available

Correct Answer
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A PPF is a straight line as a result of

Correct Answer
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Exhibit 2-8 -Refer to Exhibit 2-8. If Maria and Maya each specialize in the good in which she has a comparative advantage and then engage in trade, ____________________ can consume a combination of goods that lies beyond her PPF.

Correct Answer
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Exhibit 2-9 -Refer to Exhibit 2-9. If Alex and Adam each specialize in the good in which he has a comparative advantage and then engage in trade, ____________________ can consume a combination of goods that lies beyond their PPF.

Correct Answer
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Exhibit 2-7 -Refer to Exhibit 2-7. Point F is

Correct Answer
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If the law of increasing opportunity costs is operable, and currently the opportunity cost of producing the 101st unit of good X is 5Y, then the opportunity cost of producing the 201st unit of good is X is

Correct Answer
verified

An economy is productive efficient if it produces

Correct Answer
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C

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

Correct Answer
verified

A decrease in the quantity of resources available causes a movement from one point on a given PPF to another point along the same PPF.

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

Correct Answer
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Which of the following is not true about production possibilities frontiers?

Correct Answer
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Which of the following statements is true?

Correct Answer
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A decrease in unemployment causes the PPF to shift outward (to the right).

Correct Answer
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If a production possibilities frontier (PPF) is concave outward, it follows that

Correct Answer
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Exhibit 2-8 -Refer to Exhibit 2-8. For Maria, the opportunity cost of producing one unit of good Y is ___________ unit(s) of good X.

Correct Answer
verified

Consider the following combinations of guns and butter that can be produced: 0 guns, 20,000 units of butter; 5,000 guns, 15,000 units of butter; 10,000 guns, 10,000 units of butter; 15,000 guns, 5,000 units of butter; 20,000 guns, 0 units of butter. The PPF between guns and butter is

Correct Answer
verified

Exam 2: Production Possibilities Frontier Framework

Jose has one evening in which to prepare for two exams and can employ one of two possible strategies: The opportunity cost of receiving a 92 on the statistics exam is __________ points on the economics exam.

Correct AnswerverifiedC

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

Correct AnswerverifiedShow Answer

Which of the following statements is false?

Correct AnswerverifiedShow Answer

An increase in the quantity of resources available

Correct AnswerverifiedShow Answer

A PPF is a straight line as a result of

Correct AnswerverifiedShow Answer

Exhibit 2-8 -Refer to Exhibit 2-8. If Maria and Maya each specialize in the good in which she has a comparative advantage and then engage in trade, ____________________ can consume a combination of goods that lies beyond her PPF.

Correct AnswerverifiedShow Answer

Exhibit 2-9 -Refer to Exhibit 2-9. If Alex and Adam each specialize in the good in which he has a comparative advantage and then engage in trade, ____________________ can consume a combination of goods that lies beyond their PPF.

Correct AnswerverifiedShow Answer

Exhibit 2-7 -Refer to Exhibit 2-7. Point F is

Correct AnswerverifiedShow Answer

If the law of increasing opportunity costs is operable, and currently the opportunity cost of producing the 101st unit of good X is 5Y, then the opportunity cost of producing the 201st unit of good is X is

Correct AnswerverifiedShow Answer

An economy is productive efficient if it produces

Correct AnswerverifiedC

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

Correct AnswerverifiedShow Answer

A decrease in the quantity of resources available causes a movement from one point on a given PPF to another point along the same PPF.

Correct AnswerverifiedShow Answer

The point where the PPF intersects the horizontal axis is

Correct AnswerverifiedShow Answer

Which of the following is not true about production possibilities frontiers?

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

A decrease in unemployment causes the PPF to shift outward (to the right).

Correct AnswerverifiedShow Answer

If a production possibilities frontier (PPF) is concave outward, it follows that

Correct AnswerverifiedShow Answer

Exhibit 2-8 -Refer to Exhibit 2-8. For Maria, the opportunity cost of producing one unit of good Y is ___________ unit(s) of good X.

Correct AnswerverifiedShow Answer

Consider the following combinations of guns and butter that can be produced: 0 guns, 20,000 units of butter; 5,000 guns, 15,000 units of butter; 10,000 guns, 10,000 units of butter; 15,000 guns, 5,000 units of butter; 20,000 guns, 0 units of butter. The PPF between guns and butter is

Correct AnswerverifiedShow Answer

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C

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C

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