Question 1

Exhibit 2-11 Production possibilities curves

In Exhibit 2-11, which of the following could have caused the production possibilities curve of an economy to shift from the one labeled A to the one labeled B?

Accepted Answer

A)   A major natural disaster
B)   An increase in consumption goods production this year
C)   An advance in technology
D)   An increase in unemployment

Question 2

Exhibit 2-4 Production possibilities curve data
      A   B   C   D   E    Capital goods      0     10     20   30   40    Consumer goods  200   180   140   80     0   
According to the data in Exhibit 2-4, a total output of 140 units of consumer goods and 10 units of capital goods would:

Accepted Answer

A)   be unobtainable in this economy.
B)   be an efficient way of using the economy's scarce resources.
C)   result in the maximum use of the economy's labor force.
D)   result in a less than maximum rate of growth for this economy.

Question 3

The law of increasing opportunity costs causes the production possibilities curve to:

Accepted Answer

A)   be a straight line.
B)   slope upwards.
C)   have a bowed-out shape.
D)   shift inward.

Question 4

The production possibilities curve for the nation of Economagic shifts to the left. This could have been caused by:

Accepted Answer

A)   an increase in Economagic's labor supply.
B)   innovation in the production of goods in Economagic.
C)   a war that destroyed some of Economagic's resource base.
D)   unemployment among Economagic's workers.

Question 5

According to marginal analysis, you should choose to do something if the extra benefit:

Accepted Answer

A)   is positive.
B)   outweighs the extra cost.
C)   exceeds the benefits of the previous time spent on the activity.
D)   will change the outcome.

Question 6

Exhibit 2-18 Production possibilities curves

-In Exhibit 2-18, the production possibilities curves for a country are shown for the years Year X and Year Y. Suppose this country was located at point A in Year X and point B in Year Y. This country:

Accepted Answer

A)   is producing the same number of capital goods in both years.
B)   is producing the same number of consumption goods in both years.
C)   has shown no growth between Year X and Year Y.
D)   has higher unemployment in Year X than in Year Y.

Question 7

The question "Should children receive free lunch at school?" is an example of which fundamental economic question?

Accepted Answer

A)   The What to Produce question.
B)   The Why to Produce question.
C)   The How to Produce question.
D)   The For Whom to Produce question.

Question 8

A rational decision maker always chooses the option for which marginal benefit is:

Accepted Answer

A)   less than marginal cost.
B)   equal to marginal cost.
C)   unrelated to marginal cost.
D)   more than marginal cost.

Question 9

Adding more resources causes:

Accepted Answer

A)   downward movement along a production possibilities curve.
B)   the production possibilities curve to shift in.
C)   upward movement along a production possibilities curve.
D)   the production possibilities curve to shift out.

Question 10

Using a production possibilities curve, a technological advance that increases the amount of output for the same amount of inputs would be illustrated as a(n) :

Accepted Answer

A)   flattening of the curve.
B)   movement from one point to another point along the curve.
C)   outward shift of the curve.
D)   movement from a point on the curve to a point inside the curve.

Question 11

Draw a graph of a production possibilities curve with consumption goods and capital goods that displays the law of increasing opportunity costs. What do points on, inside and outside the curve represent? What does a rightward shift of the curve represent? How is economic growth expressed in terms of the production possibilities model?

Accepted Answer

The production possibilities curve will ...

Question 12

Why are all costs really "opportunity costs"? What is an opportunity cost of attending class?

Accepted Answer

An opportunity cost is what must be give...

Question 13

Which of the following sayings best reflects the concept of opportunity cost?

Accepted Answer

A)   "You can't teach an old dog new tricks."
B)   "There is no such thing as a free lunch."
C)   "I have a baker's dozen."
D)   "There's no business like show business."

Question 14

Exhibit 2-8 Production possibilities curve data
      A   B   C   D   E   F    Capital goods  15   14   12   9   5     0    Consumer goods    0     2     4   6   8   10   
As shown in Exhibit 2-8, the concept of increasing opportunity costs is reflected in the fact that:

Accepted Answer

A)   the quantity of consumer goods produced can never be zero.
B)   the labor force in the economy is homogeneous.
C)   greater amounts of capital goods must be sacrificed to produce an additional 2 units of consumer goods.
D)   a graph of the production data is a downward-sloping straight line.

Question 15

When the opportunity cost of producing carrots increases as more carrots are produced, then:

Accepted Answer

A)   no more carrots will be produced.
B)   resources are equally suited to the production of carrots and to other goods.
C)   the production possibilities curve is a straight line.
D)   the law of increasing opportunity costs is present

Question 16

Exhibit 2-16 Production possibilities curve

From the information in Exhibit 2-16, which of the following points on the production possibilities curve are attainable with the resources and technology currently available?

Accepted Answer

A)   A, B, C, E
B)   A, B, C, D, W
C)   E, U, W
D)   A, B, C, D, U

Question 17

On a production possibilities curve diagram, greater entrepreneurship:

Accepted Answer

A)   causes the curve to shift outward.
B)   keeps the economy on the curve.
C)   prevents movement along the curve.
D)   keeps the economy at the corners of the curve.

Question 18

After the terrorist attacks on September 11, 2001, the United States began devoting substantial resources toward the War on Terrorism, homeland security, and relief efforts. As long as our resources were being used efficiently, the production possibilities curve would suggest that:

Accepted Answer

A)   we will have to give up the production of other goods that could have been produced with these resources.
B)   we will be able to produce the same amount of other goods as before.
C)   the military spending will result in an outward shift in the production possibilities curve but that the relief effort will result in an offsetting inward shift.
D)   we will be unable to devote the resources necessary toward these efforts unless there is an improvement in technology.

Question 19

Exhibit 2-3 Production possibilities curve data
      A   B   C   D   E    Capital goods    0     1     2   3   4    Consumer goods  20   18   14   8   0   
According to the data given in Exhibit 2-3, the production of 1 unit of capital goods and 20 units of consumer goods:

Accepted Answer

A)   is possible but would be inefficient.
B)   may be a result of unemployment.
C)   may be a result of unused natural resources.
D)   is not feasible with current resources and technology.

Question 20

The production possibilities curve shows that:

Accepted Answer

A)   some of one good must be given up to get more of another good in an economy that is operating efficiently.
B)   no output combination is impossible.
C)   an economy that is operating efficiently can have more of one good without giving up some of another good.
D)   scarcity can be eliminated.

Exam 2: Production Possibilities Opportunity Cost and Economic Growth

Which of the following sayings best reflects the concept of opportunity cost?

Correct Answer
verified

Exhibit 2-16 Production possibilities curve From the information in Exhibit 2-16, which of the following points on the production possibilities curve are attainable with the resources and technology currently available?

Correct Answer
verified

The production possibilities curve for the nation of Economagic shifts to the left. This could have been caused by:

Correct Answer
verified

Exhibit 2-4 Production possibilities curve data

A

B

C

D

E

Capital goods
    0

  10

  20

30

40

Consumer goods
200

180

140

80

  0

According to the data in Exhibit 2-4, a total output of 140 units of consumer goods and 10 units of capital goods would:

Correct Answer
verified

A rational decision maker always chooses the option for which marginal benefit is:

Correct Answer
verified

Correct Answer
verified
The production possibilities curve will ...
View Answer

Adding more resources causes:

Correct Answer
verified

Exhibit 2-3 Production possibilities curve data

A

B

C

D

E

Capital goods
  0

  1

  2

3

4

Consumer goods
20

18

14

8

0

According to the data given in Exhibit 2-3, the production of 1 unit of capital goods and 20 units of consumer goods:

Correct Answer
verified

Using a production possibilities curve, a technological advance that increases the amount of output for the same amount of inputs would be illustrated as a(n) :

Correct Answer
verified

On a production possibilities curve diagram, greater entrepreneurship:

Correct Answer
verified

After the terrorist attacks on September 11, 2001, the United States began devoting substantial resources toward the War on Terrorism, homeland security, and relief efforts. As long as our resources were being used efficiently, the production possibilities curve would suggest that:

Correct Answer
verified

The production possibilities curve shows that:

Correct Answer
verified

Exhibit 2-8 Production possibilities curve data

A

B

C

D

E

F

Capital goods
15

14

12

9

5

  0

Consumer goods
  0

  2

  4

6

8

10

As shown in Exhibit 2-8, the concept of increasing opportunity costs is reflected in the fact that:

Correct Answer
verified

When the opportunity cost of producing carrots increases as more carrots are produced, then:

Correct Answer
verified

The question "Should children receive free lunch at school?" is an example of which fundamental economic question?

Correct Answer
verified

According to marginal analysis, you should choose to do something if the extra benefit:

Correct Answer
verified

Exhibit 2-11 Production possibilities curves In Exhibit 2-11, which of the following could have caused the production possibilities curve of an economy to shift from the one labeled A to the one labeled B?

Correct Answer
verified

Exhibit 2-18 Production possibilities curves -In Exhibit 2-18, the production possibilities curves for a country are shown for the years Year X and Year Y. Suppose this country was located at point A in Year X and point B in Year Y. This country:

Correct Answer
verified

The law of increasing opportunity costs causes the production possibilities curve to:

Correct Answer
verified

Why are all costs really "opportunity costs"? What is an opportunity cost of attending class?

Correct Answer
verified
An opportunity cost is what must be give...
View Answer

	A	B	C	D	E
Capital goods	0	10	20	30	40
Consumer goods	200	180	140	80	0

Exam 2: Production Possibilities Opportunity Cost and Economic Growth

Which of the following sayings best reflects the concept of opportunity cost?

Correct AnswerverifiedShow Answer

Exhibit 2-16 Production possibilities curve From the information in Exhibit 2-16, which of the following points on the production possibilities curve are attainable with the resources and technology currently available?

Correct AnswerverifiedShow Answer

The production possibilities curve for the nation of Economagic shifts to the left. This could have been caused by:

Correct AnswerverifiedShow Answer

Exhibit 2-4 Production possibilities curve data A B C D E Capital goods 0 10 20 30 40 Consumer goods 200 180 140 80 0 According to the data in Exhibit 2-4, a total output of 140 units of consumer goods and 10 units of capital goods would:

Correct AnswerverifiedShow Answer

A rational decision maker always chooses the option for which marginal benefit is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe production possibilities curve will ...View AnswerShow Answer

Adding more resources causes:

Correct AnswerverifiedShow Answer

Exhibit 2-3 Production possibilities curve data A B C D E Capital goods 0 1 2 3 4 Consumer goods 20 18 14 8 0 According to the data given in Exhibit 2-3, the production of 1 unit of capital goods and 20 units of consumer goods:

Correct AnswerverifiedShow Answer

Using a production possibilities curve, a technological advance that increases the amount of output for the same amount of inputs would be illustrated as a(n) :

Correct AnswerverifiedShow Answer

On a production possibilities curve diagram, greater entrepreneurship:

Correct AnswerverifiedShow Answer

After the terrorist attacks on September 11, 2001, the United States began devoting substantial resources toward the War on Terrorism, homeland security, and relief efforts. As long as our resources were being used efficiently, the production possibilities curve would suggest that:

Correct AnswerverifiedShow Answer

The production possibilities curve shows that:

Correct AnswerverifiedShow Answer

Exhibit 2-8 Production possibilities curve data A B C D E F Capital goods 15 14 12 9 5 0 Consumer goods 0 2 4 6 8 10 As shown in Exhibit 2-8, the concept of increasing opportunity costs is reflected in the fact that:

Correct AnswerverifiedShow Answer

When the opportunity cost of producing carrots increases as more carrots are produced, then:

Correct AnswerverifiedShow Answer

The question "Should children receive free lunch at school?" is an example of which fundamental economic question?

Correct AnswerverifiedShow Answer

According to marginal analysis, you should choose to do something if the extra benefit:

Correct AnswerverifiedShow Answer

Exhibit 2-11 Production possibilities curves In Exhibit 2-11, which of the following could have caused the production possibilities curve of an economy to shift from the one labeled A to the one labeled B?

Correct AnswerverifiedShow Answer

Exhibit 2-18 Production possibilities curves -In Exhibit 2-18, the production possibilities curves for a country are shown for the years Year X and Year Y. Suppose this country was located at point A in Year X and point B in Year Y. This country:

Correct AnswerverifiedShow Answer

The law of increasing opportunity costs causes the production possibilities curve to:

Correct AnswerverifiedShow Answer

Why are all costs really "opportunity costs"? What is an opportunity cost of attending class?

Correct AnswerverifiedAn opportunity cost is what must be give...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Exhibit 2-4 Production possibilities curve data

A

B

C

D

E

Capital goods
0

10

20

30

40

Consumer goods
200

180

140

80

0

According to the data in Exhibit 2-4, a total output of 140 units of consumer goods and 10 units of capital goods would:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The production possibilities curve will ...
View Answer

Correct Answer
verified

Exhibit 2-3 Production possibilities curve data

A

B

C

D

E

Capital goods
0

1

2

3

4

Consumer goods
20

18

14

8

0

According to the data given in Exhibit 2-3, the production of 1 unit of capital goods and 20 units of consumer goods:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Exhibit 2-8 Production possibilities curve data

A

B

C

D

E

F

Capital goods
15

14

12

9

5

0

Consumer goods
0

2

4

6

8

10

As shown in Exhibit 2-8, the concept of increasing opportunity costs is reflected in the fact that:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
An opportunity cost is what must be give...
View Answer