Question 1

A country produces only apples and bananas.Moving from point A to point B along its production possibilities frontier,5 apples are forgone and 4 bananas are gained.What is the opportunity cost of a banana?

Accepted Answer

A)   4 apples
B)   5/4 of an apple
C)   4/5 of an apple
D)   1 banana
E)   None of the above answers is correct.

Question 2

-A (very,very small)country produces milk and shirts and its production possibilities frontier is in the table above.
a.The nation is currently producing at point B.What is the opportunity cost of two additional gallons of milk? At point C? At point D? What do your results show?
b.Suppose the nation is initially producing 4 gallons of milk and 40 shirts.What is the opportunity cost of 2 additional gallons of milk? Explain your answer.

Accepted Answer

a.At point B,the opportunity cost of 2 a...

Question 3

-The above figure shows the production possibility frontier for a country.Suppose the country is producing at point E.What would be the opportunity cost to increase the production of wine to 9 thousand bottles?

Accepted Answer

A)   12 tons of rice
B)   15 thousand bottles of wine
C)   9 thousand bottles of wine
D)   3 tons of rice
E)   Nothing, it is a free lunch.

Question 4

Hank requires 1 hour to cut the grass and 3 hours to clean the house.His sister Holly requires 1 hour to cut the grass and 4 hours to clean the house.Which of the following statements is true?

Accepted Answer

A)   Hank has a comparative advantage in both cutting the grass and cleaning the house.
B)   Hank and Holly both have a comparative advantage in cutting the grass.
C)   Hank has a lower opportunity cost of cutting the grass.
D)   Hank has an absolute advantage in both cutting the grass and cleaning the house.
E)   Holly has a comparative advantage in cutting the grass.

Question 5

-Deb and Pete have volunteered to help their favorite charity mail out fundraiser information.The figure above shows their production possibilities frontiers for assembling packets and stuffing envelopes.What is Deb's opportunity cost of assembling 1 packet?

Accepted Answer

A)   160 envelopes
B)   40 envelopes
C)   4 envelopes
D)   1/4 of an envelope
E)   4 packets

Question 6

-Suppose that Germany,France,Estonia,and India all have the same production possibilities,illustrated in the figure above.Based on the production points in the figure,which country is most likely to expand its PPF to PPF??

Accepted Answer

A)   India
B)   Germany
C)   Estonia
D)   France and Germany equally
E)   France

Question 7

-In the above table,for Mary the opportunity cost of producing a dress is ________,and the opportunity cost for Mark of producing a dress is ________.

Accepted Answer

A)   1 1/2 jackets; 2/3 of a jacket
B)   1 1/2 jackets; 2 1/2 jackets
C)   1 1/4 jackets; 1/2 of a jacket
D)   1 jacket; 1 jacket
E)   1 dress; 1 dress

Question 8

"If Mexico is currently operating at a point inside its production possibilities frontier,then there are unemployed or misallocated resources in Mexico." Is this statement true or false? Briefly explain your answer.

Accepted Answer

The statement is true.Points within the ...

Question 9

When all of the available factors of production are being efficiently employed,the

Accepted Answer

A)   economy is producing at a point within its PPF.
B)   economy is producing at a point on its PPF.
C)   economy is producing at a point beyond its PPF.
D)   PPF disappears.
E)   opportunity cost of changing production is infinite.

Question 10

Using the figure above,suppose with no trade Liz and Joe each produce at point A on their respective PPFs.Then,Liz suggests that they specialize and trade.She would produces only smoothies and Joe would produce only salads.Then she would sell 10 smoothies to Joe at a price of 2.5 salads per smoothie.In this scenario,

Accepted Answer

A)   Liz gains 10 smoothies and 5 salads, and Joe gains 5 smoothies.
B)   Liz gains 5 smoothies, and Joe gains 10 smoothies.
C)   Liz gains 10 smoothies, and Joe loses 5 smoothies.
D)   Liz gains 5 smoothies and 5 salads, and Joe loses 5 salads.
E)   None of the individuals gains from trade.

Question 11

-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?

Accepted Answer

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

Question 12

For country North,the opportunity cost incurred when 3 tractors are produced is 21 watches.For country South,the opportunity cost incurred when 5 tractors are produced is 100 watches.Which country has the comparative advantage in the production of tractors?

Accepted Answer

A)   North
B)   South
C)   Both have the comparative advantage in the production of tractors.
D)   Neither country has the comparative advantage in the production of tractors.
E)   More information is needed about which country has the comparative advantage in the production of watches.

Question 13

-The figure above shows the production possibilities frontiers for the United Kingdom and France.If the United Kingdom and France specialize and engage in trade,the United Kingdom will export ________ and France will export ________.

Accepted Answer

A)   wheat; wheat
B)   wheat; fish
C)   fish; wheat
D)   fish; fish
E)   nothing; nothing

Question 14

-The table above shows a production possibilities frontier for an economy.Which of the following combinations is unattainable?

Accepted Answer

A)   0 loaves of bread and 800 books
B)   100 loaves of bread and 800 books
C)   200 loaves of bread and 800 books
D)   300 loaves of bread and 200 books
E)   0 loaves of bread and 0 books

Question 15

If Toni has an absolute advantage in both sewing and ironing when compared to Tom,then

Accepted Answer

A)   they might benefit from trading, but we need more information to determine in which task they should specialize.
B)   neither Toni nor Tom can benefit from trading with each other.
C)   Toni should specialize in sewing, and Tom should specialize in ironing.
D)   Toni cannot benefit from trading with Tom, but Tom can benefit from trading with Toni.
E)   Tom cannot benefit from trading with Toni, but Toni can benefit from trading with Tom.

Question 16

If a nation devotes a larger share of its current production to consumption goods,then

Accepted Answer

A)   its economic growth will slow down.
B)   its PPF will shift outward.
C)   its PPF will shift inward.
D)   some productive factors will become unemployed.
E)   it must produce at a point within its PPF.

Question 17

Increasing opportunity cost exists

Accepted Answer

A)   in the real world.
B)   as long as there is high unemployment.
C)   only in theory but not in real life.
D)   for a country but not for an individual.
E)   inside the PPF but not on the PPF.

Question 18

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 apples?

Accepted Answer

A)   2 pounds of bananas
B)   100 pounds of bananas
C)   2 pounds of apples
D)   0.5 of a pound of bananas
E)   5/12 of a pound of bananas

Question 19

-The above figure shows the production possibility frontier for a country.Suppose the country is producing at point D.What is the opportunity cost of increasing the production of rice to 15 tons?

Accepted Answer

A)   9 thousand bottles of wine
B)   6 thousand bottles of wine
C)   15 thousand bottles of wine
D)   12 tons of rice
E)   Nothing, it is a free lunch.

Question 20

In order for Ireland to grow more potatoes,wool production must decrease.This situation is an example of

Accepted Answer

A)   producing at a point that lies beyond the PPF.
B)   zero opportunity cost.
C)   opportunity benefit.
D)   a free lunch.
E)   a tradeoff.

Exam 3: The Economic Problem

When all of the available factors of production are being efficiently employed,the

Correct Answer
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-The above figure shows the production possibility frontier for a country.Suppose the country is producing at point E.What would be the opportunity cost to increase the production of wine to 9 thousand bottles?

Correct Answer
verified

-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?

Correct Answer
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"If Mexico is currently operating at a point inside its production possibilities frontier,then there are unemployed or misallocated resources in Mexico." Is this statement true or false? Briefly explain your answer.

Correct Answer
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The statement is true.Points within the ...
View Answer

-In the above table,for Mary the opportunity cost of producing a dress is ,and the opportunity cost for Mark of producing a dress is .

Correct Answer
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If a nation devotes a larger share of its current production to consumption goods,then

Correct Answer
verified

-The above figure shows the production possibility frontier for a country.Suppose the country is producing at point D.What is the opportunity cost of increasing the production of rice to 15 tons?

Correct Answer
verified

In order for Ireland to grow more potatoes,wool production must decrease.This situation is an example of

Correct Answer
verified

-Suppose that Germany,France,Estonia,and India all have the same production possibilities,illustrated in the figure above.Based on the production points in the figure,which country is most likely to expand its PPF to PPF??

Correct Answer
verified

-Deb and Pete have volunteered to help their favorite charity mail out fundraiser information.The figure above shows their production possibilities frontiers for assembling packets and stuffing envelopes.What is Deb's opportunity cost of assembling 1 packet?

Correct Answer
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Correct Answer
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Hank requires 1 hour to cut the grass and 3 hours to clean the house.His sister Holly requires 1 hour to cut the grass and 4 hours to clean the house.Which of the following statements is true?

Correct Answer
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If Toni has an absolute advantage in both sewing and ironing when compared to Tom,then

Correct Answer
verified

For country North,the opportunity cost incurred when 3 tractors are produced is 21 watches.For country South,the opportunity cost incurred when 5 tractors are produced is 100 watches.Which country has the comparative advantage in the production of tractors?

Correct Answer
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-The table above shows a production possibilities frontier for an economy.Which of the following combinations is unattainable?

Correct Answer
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Correct Answer
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a.At point B,the opportunity cost of 2 a...
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-The figure above shows the production possibilities frontiers for the United Kingdom and France.If the United Kingdom and France specialize and engage in trade,the United Kingdom will export and France will export .

Correct Answer
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A country produces only apples and bananas.Moving from point A to point B along its production possibilities frontier,5 apples are forgone and 4 bananas are gained.What is the opportunity cost of a banana?

Correct Answer
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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 apples?

Correct Answer
verified

Increasing opportunity cost exists

Correct Answer
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Exam 3: The Economic Problem

When all of the available factors of production are being efficiently employed,the

Correct AnswerverifiedShow Answer

-The above figure shows the production possibility frontier for a country.Suppose the country is producing at point E.What would be the opportunity cost to increase the production of wine to 9 thousand bottles?

Correct AnswerverifiedShow Answer

-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?

Correct AnswerverifiedShow Answer

"If Mexico is currently operating at a point inside its production possibilities frontier,then there are unemployed or misallocated resources in Mexico." Is this statement true or false? Briefly explain your answer.

Correct AnswerverifiedThe statement is true.Points within the ...View AnswerShow Answer

-In the above table,for Mary the opportunity cost of producing a dress is ________,and the opportunity cost for Mark of producing a dress is ________.

Correct AnswerverifiedShow Answer

If a nation devotes a larger share of its current production to consumption goods,then

Correct AnswerverifiedShow Answer

-The above figure shows the production possibility frontier for a country.Suppose the country is producing at point D.What is the opportunity cost of increasing the production of rice to 15 tons?

Correct AnswerverifiedShow Answer

In order for Ireland to grow more potatoes,wool production must decrease.This situation is an example of

Correct AnswerverifiedShow Answer

-Suppose that Germany,France,Estonia,and India all have the same production possibilities,illustrated in the figure above.Based on the production points in the figure,which country is most likely to expand its PPF to PPF??

Correct AnswerverifiedShow Answer

-Deb and Pete have volunteered to help their favorite charity mail out fundraiser information.The figure above shows their production possibilities frontiers for assembling packets and stuffing envelopes.What is Deb's opportunity cost of assembling 1 packet?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Hank requires 1 hour to cut the grass and 3 hours to clean the house.His sister Holly requires 1 hour to cut the grass and 4 hours to clean the house.Which of the following statements is true?

Correct AnswerverifiedShow Answer

If Toni has an absolute advantage in both sewing and ironing when compared to Tom,then

Correct AnswerverifiedShow Answer

For country North,the opportunity cost incurred when 3 tractors are produced is 21 watches.For country South,the opportunity cost incurred when 5 tractors are produced is 100 watches.Which country has the comparative advantage in the production of tractors?

Correct AnswerverifiedShow Answer

-The table above shows a production possibilities frontier for an economy.Which of the following combinations is unattainable?

Correct AnswerverifiedShow Answer

Correct Answerverifieda.At point B,the opportunity cost of 2 a...View AnswerShow Answer

-The figure above shows the production possibilities frontiers for the United Kingdom and France.If the United Kingdom and France specialize and engage in trade,the United Kingdom will export ________ and France will export ________.

Correct AnswerverifiedShow Answer

A country produces only apples and bananas.Moving from point A to point B along its production possibilities frontier,5 apples are forgone and 4 bananas are gained.What is the opportunity cost of a banana?

Correct AnswerverifiedShow Answer

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 apples?

Correct AnswerverifiedShow Answer

Increasing opportunity cost exists

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The statement is true.Points within the ...
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-In the above table,for Mary the opportunity cost of producing a dress is ,and the opportunity cost for Mark of producing a dress is .

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a.At point B,the opportunity cost of 2 a...
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-The figure above shows the production possibilities frontiers for the United Kingdom and France.If the United Kingdom and France specialize and engage in trade,the United Kingdom will export and France will export .

Correct Answer
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