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Exam 3: The Economic Problem

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Question 141

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-Suppose India and France have the same PPF,shown in the figure above.Based on their current production points,which is India's most likely future PPF?

A) PPF₂
B) PPF₁
C) PPF₀
D) either PPF₀ or PPF₁
E) None of the above because economic growth will not happen in India.

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Question 142

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As technology advances,

A) all opportunity costs decrease.
B) the PPF shifts outward.
C) a country moves toward the midpoint along its PPF and can produce more of both goods.
D) all opportunity costs increase.
E) the PPF shifts inward because unemployment occurs.

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Question 143

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On a production possibilities frontier,500 pounds of apples and 1,200 pounds of bananas can be produced while at another point on the same frontier,300 pounds of apples and 1,300 pounds of bananas can be produced.Between these points,what is the opportunity cost of producing a pound of bananas?

The production possibilities frontier is a boundary that separates

-The figure above illustrates a small country's production possibilities frontier.Moving from point C to point B,the per unit opportunity cost of computers is ________ per computer.

The production possibilities frontier is a graph showing the

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.Based on these data,

-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

-Suppose India and France have the same PPF,shown in the figure above.Based on their current production points,which is France's most likely future PPF?

$\begin{array} { l | c c c } & \begin{array} { l } \text { Potatoes } \\\text { (pounds) }\end{array} & \begin{array} { c } \text { Tomatoes } \\\text { (pounds) }\end{array} \\\hline \text { Huey } & 12 & \text { or } & 8 \\\text { Steve } & 6 & \text { or } & 2\end{array}$ -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,Huey's opportunity cost of producing one pound of tomatoes is

-The above figure shows the production possibility frontier for an economy.The point or points that are attainable are

Moving from one point to another on a production possibilities frontier implies

-Suppose Puerto Rico and Hawaii currently have the same production possibilities so that the above figure is the PPF for hotels and consumption goods in the two areas.Hotels are a capital good that,once built,will help produce still more consumption goods.If Puerto Rico produces more hotels than Hawaii,

$\begin{array} { c c c } \hline \text { Possibility } & \text { Capital goods } & \text { Consumption goods } \\\hline \text { A } & 0 & 60 \\\text { B } & 2 & 55 \\\text { C } & 4 & 45 \\\text { D } & 6 & 25 \\\text { E } & 8 & 0\end{array}$ -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

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

$\begin{array}{c}\begin{array}{lc}\text { Nation A's production in } 1 \text { day } \\\hline \text { Computers } & 100 \\\text { Software } & 140\end{array}\begin{array}{lc}\text { Nation B's production in } 1 \text { day } \\\hline \text { Computers } & 120 \\\text { Software } & 150 \end{array}\end{array}$ -Two nations can produce computers and software in the amounts given in the table above.Does either nation have an absolute advantage in producing the products? Which nation has a comparative advantage in computers? Which nation has a comparative advantage in software? Explain your answers.

The figure above shows Liz's and Joe's production possibilities for Salads and Smoothies. -Liz has a comparative advantage in ________ and an absolute advantage in ________.

A country produces only cans of soup and ink pens.If the country produces on its bowed outward PPF and increases the production of cans of soup,the opportunity cost of additional

Japan can use all of its resources to produce 100 videos or 400 shoes.China can use all of its resources to produce 25 videos or 200 shoes.Which nation has the comparative advantage in shoes and which nation has the comparative advantage in videos?

-The figure above shows the production possibilities frontier for a country.In order for it to move from producing at point A to producing at point B,the country would need to incur an opportunity cost of