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

Question 2

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 3

If a society's unemployment rate rises from 5 percent to 8 percent,the result will be a leftward shift of the society's PPF.

Accepted Answer

A) True 
 B)False

Question 4

The law of increasing opportunity costs states that as

Accepted Answer

A)   less of a good is produced,the higher the opportunity costs of producing that good.
B)   more of a good is produced,the lower the opportunity costs of producing that good.
C)   more of a good is produced,the higher the opportunity costs of producing that good.
D)   more of a good is produced,the opportunity cost of producing the good remains the same.
E)   a and b

Question 5

The PPF between goods X and Y will be a downward-sloping

Accepted Answer

A)   straight line if increasing opportunity costs exist.
B)   straight line if decreasing opportunity costs exist.
C)   curve that is bowed inward if increasing opportunity costs exist.
D)   straight line if constant opportunity costs exist.

Question 6

An economy can produce the following combinations of goods: 50X and 0Y,40X and 10Y,30X and 20Y,20X and 30Y,10X and 40Y,and 0X and 50Y.The production possibilities frontier (PPF) for the economy is

Accepted Answer

A)   concave downward because the opportunity cost of producing the 10th unit of Y is greater than the opportunity cost of producing the first unit of Y.
B)   a straight (downward-sloping) line because the opportunity cost of producing the two goods is constant.
C)   concave downward because the opportunity cost of producing the 40th unit of Y is less than the opportunity cost of producing the 10th unit of Y.
D)   a straight (downward-sloping) line because the opportunity cost of producing the 10th unit of X is greater than the opportunity cost of producing the 40th unit of X.
E)   a straight (downward-sloping) line because the opportunity cost of producing the 30th unit of Y is greater than the opportunity cost of producing the 30th unit of X.

Question 7

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

Accepted Answer

A)   10,000 units of butter.
B)   20,000 units of butter.
C)   20,000 units of guns.
D)   10,000 units of guns.

Question 8

The PPF between goods X and Y will be a downward-sloping

Accepted Answer

A)   straight line if increasing opportunity costs exist.
B)   straight line if decreasing opportunity costs exist.
C)   curve that is bowed outward if increasing opportunity costs exist.
D)   curve that is bowed outward if constant opportunity costs exist.

Question 9

If Luke can bake bread at a lower opportunity cost than Jason,and Jason can produce paintings at a lower opportunity cost than Luke,it follows that

Accepted Answer

A)   Luke has a comparative advantage in paintings and Jason has a comparative advantage in baking bread.
B)   Both Luke and Jason have a comparative advantage in baking bread.
C)   Both Luke and Jason have a comparative disadvantage in producing paintings.
D)   Luke has a comparative advantage in baking bread and Jason has a comparative advantage in producing paintings.
E)   There is not enough information to answer the question.

Question 10

In the production possibilities framework,economic growth is depicted by the PPF

Accepted Answer

A)   shifting leftward (toward the origin) .
B)   shifting rightward (away from the origin) .
C)   becoming a straight line rather than a bowed outward curve.
D)   becoming bowed outward rather than a straight line.

Question 11

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 12

In a PPF graph of goods X and Y,points that lie beyond (to the right of)the PPF represent combinations of the two goods that are currently unattainable.

Accepted Answer

A) True 
 B)False

Question 13

Through war,many of the factories in country 1 are destroyed and many of its people are killed.As a result,the country's

Accepted Answer

A)   production possibilities frontier (PPF) after the war has probably shifted to the right compared to its PPF prior to the war.
B)   PPF after the war has probably shifted to the left compared to its PPF prior to the war.
C)   PPF after the war is probably the same PPF as before the war.
D)   ability to produce goods and services has increased.
E)   b and d

Question 14

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

Accepted Answer

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

Question 15

Productive inefficiency implies that

Accepted Answer

A)   it is possible to obtain gains in one area without losses in another.
B)   it is impossible to obtain gains in one area without losses in another.
C)   there are too many resources.
D)   there are too few resources.
E)   none of the above

Question 16

-Refer to Exhibit 2-6.Which graph depicts a discovery of a new cheap source of energy that assists in the production of both good X and good Y?

Accepted Answer

A)   (1) 
B)   (2) 
C)   (3) 
D)   (4) 
E)   none of the above

Question 17

A person has a comparative advantage in the production of a good when they can produce the product at a(n) ________ opportunity cost compared to another person.

Accepted Answer

A)   higher
B)   increasing
C)   lower
D)   equal

Question 18

The endpoints of an economy's production possibilities frontier (PPF) for goods X and Y are: (2,000X,0Y) and (0X,500Y) .Furthermore,the opportunity cost between these two goods is always constant.Which of the following combinations of the two goods,X and Y,lies on the economy's PPF?

Accepted Answer

A)   400 units of X and 200 units of Y
B)   600 units of X and 250 units of Y
C)   400 units of X and 150 units of Y
D)   1,000 units of X and 250 units of Y
E)   300 units of X and 150 units of Y

Question 19

-Refer to Exhibit 2-9.For Adam,the opportunity cost of producing one unit of good A is ____________ unit(s) of good B.

Accepted Answer

A)   3.00
B)   0.33
C)   0.75
D)   1.33

Question 20

If an economy can produce a maximum of 100 units of good X and the opportunity cost of 1X is always 5Y,then what is the maximum number of units of good Y the economy can produce?

Accepted Answer

A)   250
B)   100
C)   20
D)   500
E)   none of the above

Exam 2: Production Possibilities Frontier Framework

Productive inefficiency implies that

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-Refer to Exhibit 2-6.Which graph depicts a discovery of a new cheap source of energy that assists in the production of both good X and good Y?

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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 AnswerverifiedShow Answer

In the production possibilities framework,economic growth is depicted by the PPF

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If Luke can bake bread at a lower opportunity cost than Jason,and Jason can produce paintings at a lower opportunity cost than Luke,it follows that

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In a PPF graph of goods X and Y,points that lie beyond (to the right of)the PPF represent combinations of the two goods that are currently unattainable.

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The law of increasing opportunity costs states that as

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If a society's unemployment rate rises from 5 percent to 8 percent,the result will be a leftward shift of the society's PPF.

Correct AnswerverifiedShow Answer

Through war,many of the factories in country 1 are destroyed and many of its people are killed.As a result,the country's

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Which of the following statements is false?

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The endpoints of an economy's production possibilities frontier (PPF) for goods X and Y are: (2,000X,0Y) and (0X,500Y) .Furthermore,the opportunity cost between these two goods is always constant.Which of the following combinations of the two goods,X and Y,lies on the economy's PPF?

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The PPF between goods X and Y will be a downward-sloping

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

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

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-Refer to Exhibit 2-9.For Adam,the opportunity cost of producing one unit of good A is ____________ unit(s) of good B.

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If an economy can produce a maximum of 100 units of good X and the opportunity cost of 1X is always 5Y,then what is the maximum number of units of good Y the economy can produce?

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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 AnswerverifiedShow Answer

The PPF between goods X and Y will be a downward-sloping

Correct AnswerverifiedShow Answer

A person has a comparative advantage in the production of a good when they can produce the product at a(n) ________ opportunity cost compared to another person.

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An economy can produce the following combinations of goods: 50X and 0Y,40X and 10Y,30X and 20Y,20X and 30Y,10X and 40Y,and 0X and 50Y.The production possibilities frontier (PPF) for the economy is

Correct AnswerverifiedShow Answer

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