Question 1

Some time ago the government of China required many highly skilled technicians and scientists to engage in unskilled agricultural labor in order to develop "proper social attitudes." This policy probably caused China to produce

Accepted Answer

A)   at an inappropriate point along its production possibilities frontier.
B)   outside its production possibilities frontier with respect to food, but inside with respect to high-technology goods.
C)   inside its production possibilities frontier with respect to food, but outside with respect to high-technology goods.
D)   inside its production possibilities frontier.E) B) and D)
F) All of the above

Question 2

-As Rainclouds Inc. moves downward along its production possibilities frontier, illustrated in the figure above, the opportunity cost of a raincoat ________.

Accepted Answer

A)   decreases
B)   depends on the initial quantity produced
C)   increases
D)   remains the sameE) C) and D)
F) B) and D)

Question 3

-Employees at Bank of America are good at providing banking services and workers at Ben & Jerry's are good at making ice cream. The figure above shows the marginal cost and marginal benefit curves for ice cream. As Ben & Jerry's increases production from 1 to 2 million gallons of ice cream, the

Accepted Answer

A)   marginal cost curve shifts downward.
B)   marginal cost curve shifts upward.
C)   opportunity cost of ice cream decreases.
D)   opportunity cost of ice cream increases to 2 banking services per gallon.E) B) and D)
F) B) and C)

Question 4

A production possibilities frontier figure does NOT illustrate

Accepted Answer

A)   the limits on production imposed by our limited resources and technology.
B)   the exchange of one good or service for another.
C)   opportunity cost.
D)   attainable and unattainable points.E) None of the above
F) B) and C)

Question 5

-In the above table, the production of 3 pizzas and 80 cases of soda is

Accepted Answer

A)   impossible unless more resources become available or technology improves.
B)   feasible but would involve unemployed or misallocated resources.
C)   possible only if the economy produces with maximum efficiency.
D)   possible only if there is inflation.E) None of the above
F) C) and D)

Question 6

A person has a comparative advantage in producing a particular good if that person

Accepted Answer

A)   has higher productivity in producing it than anyone else has.
B)   can produce it at lower opportunity cost than anyone else can.
C)   has less desire to consume that good than anyone else has.
D)   has more human capital related to that good than anyone else has.E) A) and D)
F) B) and C)

Question 7

-Refer to the production possibilities frontier figure above. Which of the following movements requires the largest opportunity cost, in terms of good X forgone, per extra unit of good Y?

Accepted Answer

A)   from point e to point d
B)   from point d to point c
C)   from point c to point b
D)   from point b to point aE) B) and D)
F) A) and D)

Question 8

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

Accepted Answer

A)   0.
B)   minus 10 cameras.
C)   plus 10 cameras.
D)   plus 20 cameras.E) None of the above
F) C) and D)

Question 9

The production possibilities frontier represents

Accepted Answer

A)   the maximum amount of labor and capital available to society.
B)   combinations of goods and services among which consumers are indifferent.
C)   the maximum levels of production that can be attained.
D)   the maximum rate of growth of capital and labor in a country.E) B) and C)
F) C) and D)

Question 10

Which of the following is NOT true concerning a society's production possibilities frontier (PPF) ?

Accepted Answer

A)   It reveals the maximum amount of any two goods that can be produced from a given quantity of resources.
B)   Tradeoffs occur when moving along a PPF.
C)   Production efficiency occurs when production is on the frontier itself.
D)   Consumers will receive equal benefits from the two goods illustrated in the PPF.E) A) and D)
F) B) and D)

Question 11

-The table above lists six points on the production possibilities frontier for grain and cars. Given this information, which of the following combinations is unattainable?

Accepted Answer

A)   6 tons of grain and 18 cars
B)   4 tons of grain and 26 cars
C)   2 tons of grain and 27 cars
D)   7 tons of grain and 10 carsE) B) and C)
F) None of the above

Question 12

One of the opportunity costs of economic growth is

Accepted Answer

A)   capital accumulation.
B)   technological change.
C)   reduced current consumption.
D)   the gain in future consumption.E) A) and C)
F) A) and B)

Question 13

At one point along a PPF 40 tons of wheat are produced while 80 tons of rice are produced. At another point along the same PPF, 41 tons of wheat are produced while 70 tons of rice are produced. The opportunity cost of producing a ton of wheat between these points is ________ per ton of wheat.

Accepted Answer

A)   1/2 ton of rice
B)   10 tons of rice
C)   1/10 ton of rice
D)   4/7 ton of riceE) C) and D)
F) A) and D)

Question 14

-In the figure above, suppose that Mac and Izzie specialize and trade to reach point c. Mac sends Izzie

Accepted Answer

A)   12 computers in exchange for 12 TVs.
B)   12 computers in exchange for 6 TVs.
C)   6 computers in exchange for 12 TVs.
D)   6 computers in exchange for 6 TVs.E) All of the above
F) C) and D)

Question 15

Are all points inside the production possibilities frontier unattainable?

Accepted Answer

No, all points within the prod...

Question 16

Marginal benefit curves slope ________ and marginal cost curves slope ________.

Accepted Answer

A)   upward; upward
B)   upward; downward
C)   downward; downward
D)   downward; upwardE) A) and B)
F) None of the above

Question 17

Missouri can produce 10,000 tons of pecans per year or 5,000 tons of pears per year. Washington can produce 12,000 tons of pecans per year or 48,000 tons of pears per year. If these two states were to engage in trade, which of the following is true?

Accepted Answer

A)   Missouri would specialize in pear production and trade pears to Washington pecans.
B)   Missouri would specialize in pecan production and trade pecans to Washington for pears.
C)   Washington would produce both pears and pecans and Missouri would produce neither.
D)   Half of both Washington's and Missouri's resources would be devoted to pears and the other half to pecans because that is the comparative advantage.E) B) and D)
F) None of the above

Question 18

President Obama has proposed a goal that everyone complete at least one year of formal education or training beyond high school. This policy would

Accepted Answer

A)   increase human capital and increase economic growth.
B)   increase physical capital and increase economic growth.
C)   increase financial capital and increase economic growth.
D)   eliminate opportunity costs and increase economic growth.E) A) and B)
F) A) and D)

Question 19

Economic growth is the result of all of the following except

Accepted Answer

A)   technological change.
B)   capital accumulation.
C)   opportunity cost.
D)   investment in human capital.E) None of the above
F) A) and D)

Question 20

Country A Country B 
-A person who has an absolute advantage in the production of all goods will

Accepted Answer

A)   also have a comparative advantage in the production of all goods.
B)   not be able to gain from specialization and exchange.
C)   have a production possibilities frontier with a constant slope.
D)   have a comparative advantage in the production of some goods but not in the production of others.E) A) and D)
F) All of the above

Exam 2: The Economic Problem

-In the above table, the production of 3 pizzas and 80 cases of soda is

Correct Answer
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Missouri can produce 10,000 tons of pecans per year or 5,000 tons of pears per year. Washington can produce 12,000 tons of pecans per year or 48,000 tons of pears per year. If these two states were to engage in trade, which of the following is true?

Correct Answer
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Correct Answer
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Marginal benefit curves slope and marginal cost curves slope .

Correct Answer
verified

President Obama has proposed a goal that everyone complete at least one year of formal education or training beyond high school. This policy would

Correct Answer
verified

-Refer to the production possibilities frontier figure above. Which of the following movements requires the largest opportunity cost, in terms of good X forgone, per extra unit of good Y?

Correct Answer
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One of the opportunity costs of economic growth is

Correct Answer
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-Employees at Bank of America are good at providing banking services and workers at Ben & Jerry's are good at making ice cream. The figure above shows the marginal cost and marginal benefit curves for ice cream. As Ben & Jerry's increases production from 1 to 2 million gallons of ice cream, the

Correct Answer
verified

Economic growth is the result of all of the following except

Correct Answer
verified

-In the figure above, suppose that Mac and Izzie specialize and trade to reach point c. Mac sends Izzie

Correct Answer
verified

A production possibilities frontier figure does NOT illustrate

Correct Answer
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A person has a comparative advantage in producing a particular good if that person

Correct Answer
verified

-The table above lists six points on the production possibilities frontier for grain and cars. Given this information, which of the following combinations is unattainable?

Correct Answer
verified

Country A Country B -A person who has an absolute advantage in the production of all goods will

Correct Answer
verified

-As Rainclouds Inc. moves downward along its production possibilities frontier, illustrated in the figure above, the opportunity cost of a raincoat ________.

Correct Answer
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Are all points inside the production possibilities frontier unattainable?

Correct Answer
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No, all points within the prod...
View Answer

Some time ago the government of China required many highly skilled technicians and scientists to engage in unskilled agricultural labor in order to develop "proper social attitudes." This policy probably caused China to produce

Correct Answer
verified

At one point along a PPF 40 tons of wheat are produced while 80 tons of rice are produced. At another point along the same PPF, 41 tons of wheat are produced while 70 tons of rice are produced. The opportunity cost of producing a ton of wheat between these points is ________ per ton of wheat.

Correct Answer
verified

Which of the following is NOT true concerning a society's production possibilities frontier (PPF) ?

Correct Answer
verified

The production possibilities frontier represents

Correct Answer
verified

Exam 2: The Economic Problem

-In the above table, the production of 3 pizzas and 80 cases of soda is

Correct AnswerverifiedShow Answer

Missouri can produce 10,000 tons of pecans per year or 5,000 tons of pears per year. Washington can produce 12,000 tons of pecans per year or 48,000 tons of pears per year. If these two states were to engage in trade, which of the following is true?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Marginal benefit curves slope ________ and marginal cost curves slope ________.

Correct AnswerverifiedShow Answer

President Obama has proposed a goal that everyone complete at least one year of formal education or training beyond high school. This policy would

Correct AnswerverifiedShow Answer

-Refer to the production possibilities frontier figure above. Which of the following movements requires the largest opportunity cost, in terms of good X forgone, per extra unit of good Y?

Correct AnswerverifiedShow Answer

One of the opportunity costs of economic growth is

Correct AnswerverifiedShow Answer

-Employees at Bank of America are good at providing banking services and workers at Ben & Jerry's are good at making ice cream. The figure above shows the marginal cost and marginal benefit curves for ice cream. As Ben & Jerry's increases production from 1 to 2 million gallons of ice cream, the

Correct AnswerverifiedShow Answer

Economic growth is the result of all of the following except

Correct AnswerverifiedShow Answer

-In the figure above, suppose that Mac and Izzie specialize and trade to reach point c. Mac sends Izzie

Correct AnswerverifiedShow Answer

A production possibilities frontier figure does NOT illustrate

Correct AnswerverifiedShow Answer

A person has a comparative advantage in producing a particular good if that person

Correct AnswerverifiedShow Answer

-The table above lists six points on the production possibilities frontier for grain and cars. Given this information, which of the following combinations is unattainable?

Correct AnswerverifiedShow Answer

Country A Country B -A person who has an absolute advantage in the production of all goods will

Correct AnswerverifiedShow Answer

-As Rainclouds Inc. moves downward along its production possibilities frontier, illustrated in the figure above, the opportunity cost of a raincoat ________.

Correct AnswerverifiedShow Answer

Are all points inside the production possibilities frontier unattainable?

Correct AnswerverifiedNo, all points within the prod...View AnswerShow Answer

Some time ago the government of China required many highly skilled technicians and scientists to engage in unskilled agricultural labor in order to develop "proper social attitudes." This policy probably caused China to produce

Correct AnswerverifiedShow Answer

At one point along a PPF 40 tons of wheat are produced while 80 tons of rice are produced. At another point along the same PPF, 41 tons of wheat are produced while 70 tons of rice are produced. The opportunity cost of producing a ton of wheat between these points is ________ per ton of wheat.

Correct AnswerverifiedShow Answer

Which of the following is NOT true concerning a society's production possibilities frontier (PPF) ?

Correct AnswerverifiedShow Answer

The production possibilities frontier represents

Correct AnswerverifiedShow Answer

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Marginal benefit curves slope and marginal cost curves slope .

Correct Answer
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No, all points within the prod...
View Answer

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