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Exam 2: The Economic Problem

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Question 71

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-The figure above shows a nation's production possibilities frontier for apples and oranges. a) What combination of goods is represented by point A? b) What combination of goods is represented by point B? c) Which point represents an unattainable combination of goods?

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a)3 million bushels of apples ...

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Question 72

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A key factor that leads to economic growth is

A) human capital accumulation.
B) increasing current consumption.
C) avoiding the opportunity cost of investment.
D) Both answers A and B are correct.

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Question 73

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-Victor currently produces nuts and bolts at point a in the figure.Victor's marginal cost of producing an additional nut is ________.

An increase in the nation's capital stock will

-Based on the above,which figure shows the impact of a decrease in the population available to work?

$\begin{array} { | c | c | c | } \hline & \begin{array} { c } \text { U.S. production } \\\text { possibilities }\end{array} & \begin{array} { c } \text { France's production } \\\text { possibilities }\end{array} \\\hline \text { Steel } & 100 & 25 \\\hline \text { Concrete } & 200 & 100 \\\hline\end{array}$ -The data in the above table demonstrates that gains from trade can be captured if

As long as technology increases,economic growth is free.

In one day,Sue can change the oil on 20 cars or change the tires on 20 cars.In one day,Fred can change the oil on 20 cars or change the tires on 10 cars.Sue's opportunity cost of changing oil is ________ than Fred's and her opportunity cost for changing tires is ________ than Fred's.

Two social institutions that are essential for trade to be organized are ________.

Homer and Teddy are stranded on a desert island.To feed themselves each day they can either catch fish or pick fruit.In a day,Teddy could pick 60 pieces of fruit or catch 20 fish.Homer could pick 100 pieces of fruit or catch 150 fish.Which of the following is correct?

Marginal cost

Households are buyers in factor markets and sellers in goods markets.

Over the past several decades,the United States has devoted a greater fraction of its resources to consumption than Hong Kong,which is why the U.S.economy grew faster than Hong Kong's economy.

China's State Council has encouraged more spending to "improve transportation links and other infrastructure...." It will also "step up its spending on vocational training and other educational programs for adults." www.nytimes.com,Keith Bradsher,October 19,2008 Suppose that capital goods are on the vertical axis while consumption goods are on the horizontal axis of China's PPF. As a result of enacting the policies,we would expect I. an expansion of China's production possibilities. II. capital accumulation. III. an increase in human capital

Which of the following does NOT help organize trade?

-In the above figure,at point a what is the opportunity cost of producing one more audio tape?

Suppose that a typical German factory can produce 20 cameras or 1 computer in an hour,and that a typical American factory can produce 10 cameras or one computer in an hour.If Germany produces one less computer and switches resources to cameras,and the United States produces one more computer and takes resources out of cameras,then the net change in camera production in both countries taken together is

An increase in the nation's capital stock will

Technological progress makes the production possibilities frontier

While producing on the production possibilities frontier,if additional units of a good could be produced at a constant opportunity cost,the production possibilities frontier would be