Question 1

-As output moves from point a to point b to point c along the PPF in the above figure, the opportunity cost of one more unit of good X

Accepted Answer

A)   rises. The opportunity cost of one more unit of good Y also rises.
B)   rises. The opportunity cost of one more unit of good Y falls.
C)   falls. The opportunity cost of one more unit of good Y also falls.
D)   falls. The opportunity cost of one more unit of good Y rises.E) B) and C)
F) A) and C)

Question 2

Marginal cost is the one more unit of a good and of the good increases.

Accepted Answer

A)   opportunity cost of producing; decreases as production
B)   opportunity cost of producing; increases as production
C)   benefit from consuming; decreases as consumption
D)   benefit from consuming; increases as consumptionE) A) and B)
F) A) and C)

Question 3

Tom takes 20 minutes to burn a CD and 5 minutes to make a sandwich. Jerry takes 15 minutes to burn a CD and 3 minutes to make a sandwich. Both individuals will be better off if

Accepted Answer

A)   Jerry trades sandwiches in exchange for CDs.
B)   Tom trades sandwiches in exchange for CDs.
C)   they trade, no matter who trades sandwiches and who CDs.
D)   they don't trade.E) A) and C)
F) All of the above

Question 4

Explain the connection between opportunity cost and the PPF.

Accepted Answer

When moving along the production possibi...

Question 5

-Refer to the production possibilities frontier in the figure above. Which production point indicates that resources are NOT fully utilized or are misallocated?

Accepted Answer

A)   Point a
B)   Point b
C)   Point c
D)   Point eE) B) and D)
F) A) and B)

Question 6

Tom takes 20 minutes to burn a CD and 5 minutes to make a sandwich. Jerry takes 15 minutes to burn a CD and 3 minutes to make a sandwich. If Tom and Jerry trade

Accepted Answer

A)   Jerry will benefit and Tom will not.
B)   Tom will benefit and Jerry will not.
C)   both will benefit.
D)   none of them will benefit.E) A) and B)
F) All of the above

Question 7

What is the relationship between the bowed out shape of the production possibilities frontier and the increasing opportunity cost of a good as more of it is produced?

Accepted Answer

The production possibilities frontier is...

Question 8

"Allocative efficiency requires that the maximum number of people have access to all of the goods and services that our economy produces." Is this statement true or false? Explain your answer.

Accepted Answer

The statement is false. Allocative effic...

Question 9

Increasing opportunity costs suggests that

Accepted Answer

A)   various types of labor are not perfect substitutes for one another.
B)   there is no difference between inputs used in a production process.
C)   all labor and capital are costlessly interchangeable.
D)   various types of labor are perfect substitutes for one another.E) B) and D)
F) A) and B)

Question 10

The most anyone is willing to pay for another purse is $30. Currently the price of a purse is $40, and the cost of producing another purse is $50. The marginal benefit of a purse is

Accepted Answer

A)   $40.
B)   $50.
C)   $30.
D)   an amount not given in the answers above.E) A) and B)
F) All of the above

Question 11

Economic growth is the result of all of the following EXCEPT

Accepted Answer

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

Question 12

A reduction in the amount of unemployment

Accepted Answer

A)   moves the economy's point of production along the production possibilities frontier.
B)   moves the economy's point of production further away from the production possibilities frontier.
C)   moves the economy's point of production closer to the production possibilities frontier.
D)   shifts the production possibilities frontier outward.E) None of the above
F) All of the above

Question 13

Moving on a bowed out PPF, what happens to the opportunity cost of a good as more of it is produced?

Accepted Answer

The bowed out PPF indicates th...

Question 14

-In the table above, country B is producing 4 units of X and 6 units of Y. For country B, the opportunity cost of producing an additional unit of X is

Accepted Answer

A)   4 units of Y.
B)   2 units of Y.
C)   1 unit of Y
D)   3/2 units of Y.E) A) and C)
F) A) and D)

Question 15

A circular flow diagram shows the flows from the goods and resources markets.

Accepted Answer

A) True 
 B)False

Question 16

-Using the values for the marginal benefit and the marginal cost of a bushel of apples given in the table above, what is the allocatively efficient quantity of apples? Suppose 10 million bushels of apples are produced. Should the quantity be increased or deceased? What if 20 million bushels are produced; should the quantity be increased or decreased?

Accepted Answer

The allocatively efficient quantity of a...

Question 17

Generally, opportunity costs increase and the production possibilities frontier bows outward. Why?

Accepted Answer

A)   Labor is scarcer than capital.
B)   Technology is slow to change.
C)   Unemployment is inevitable.
D)   Resources are not equally useful in all activities.E) All of the above
F) B) and C)

Question 18

We measure the marginal of a good by what a for another unit of the good.

Accepted Answer

A)   cost; person's preferences are
B)   benefit; person must pay
C)   cost; person is willing to pay
D)   benefit; person is willing to payE) B) and C)
F) None of the above

Question 19

A computer software program is most strongly an example of

Accepted Answer

A)   vicarious property.
B)   fiat property.
C)   intellectual property.
D)   real property.E) None of the above
F) A) and C)

Question 20

-In the above figure, curve b shows the

Accepted Answer

A)   bottles of soda that people are willing to forgo to get another bicycle.
B)   benefits of producing more soda is greater than the benefits of producing more bicycles.
C)   benefits of producing more bicycles is greater than the benefits of producing more soda.
D)   bottles of soda that people must forgo to get another bicycle.E) None of the above
F) A) and C)

Exam 2: The Economic Problem

Correct Answer
verified
The allocatively efficient quantity of a...
View Answer

Economic growth is the result of all of the following EXCEPT

Correct Answer
verified

-In the table above, country B is producing 4 units of X and 6 units of Y. For country B, the opportunity cost of producing an additional unit of X is

Correct Answer
verified

Explain the connection between opportunity cost and the PPF.

Correct Answer
verified
When moving along the production possibi...
View Answer

A reduction in the amount of unemployment

Correct Answer
verified

Generally, opportunity costs increase and the production possibilities frontier bows outward. Why?

Correct Answer
verified

Tom takes 20 minutes to burn a CD and 5 minutes to make a sandwich. Jerry takes 15 minutes to burn a CD and 3 minutes to make a sandwich. Both individuals will be better off if

Correct Answer
verified

Marginal cost is the one more unit of a good and of the good increases.

Correct Answer
verified

-In the above figure, curve b shows the

Correct Answer
verified

A computer software program is most strongly an example of

Correct Answer
verified

A circular flow diagram shows the flows from the goods and resources markets.

Correct Answer
verified

Tom takes 20 minutes to burn a CD and 5 minutes to make a sandwich. Jerry takes 15 minutes to burn a CD and 3 minutes to make a sandwich. If Tom and Jerry trade

Correct Answer
verified

Moving on a bowed out PPF, what happens to the opportunity cost of a good as more of it is produced?

Correct Answer
verified
The bowed out PPF indicates th...
View Answer

Increasing opportunity costs suggests that

Correct Answer
verified

"Allocative efficiency requires that the maximum number of people have access to all of the goods and services that our economy produces." Is this statement true or false? Explain your answer.

Correct Answer
verified
The statement is false. Allocative effic...
View Answer

-Refer to the production possibilities frontier in the figure above. Which production point indicates that resources are NOT fully utilized or are misallocated?

Correct Answer
verified

The most anyone is willing to pay for another purse is $30. Currently the price of a purse is $40, and the cost of producing another purse is $50. The marginal benefit of a purse is

Correct Answer
verified

We measure the marginal of a good by what a for another unit of the good.

Correct Answer
verified

What is the relationship between the bowed out shape of the production possibilities frontier and the increasing opportunity cost of a good as more of it is produced?

Correct Answer
verified
The production possibilities frontier is...
View Answer

-As output moves from point a to point b to point c along the PPF in the above figure, the opportunity cost of one more unit of good X

Correct Answer
verified

Exam 2: The Economic Problem

Correct AnswerverifiedThe allocatively efficient quantity of a...View AnswerShow Answer

Economic growth is the result of all of the following EXCEPT

Correct AnswerverifiedShow Answer

-In the table above, country B is producing 4 units of X and 6 units of Y. For country B, the opportunity cost of producing an additional unit of X is

Correct AnswerverifiedShow Answer

Explain the connection between opportunity cost and the PPF.

Correct AnswerverifiedWhen moving along the production possibi...View AnswerShow Answer

A reduction in the amount of unemployment

Correct AnswerverifiedShow Answer

Generally, opportunity costs increase and the production possibilities frontier bows outward. Why?

Correct AnswerverifiedShow Answer

Tom takes 20 minutes to burn a CD and 5 minutes to make a sandwich. Jerry takes 15 minutes to burn a CD and 3 minutes to make a sandwich. Both individuals will be better off if

Correct AnswerverifiedShow Answer

Marginal cost is the one more unit of a good and of the good increases.

Correct AnswerverifiedShow Answer

-In the above figure, curve b shows the

Correct AnswerverifiedShow Answer

A computer software program is most strongly an example of

Correct AnswerverifiedShow Answer

A circular flow diagram shows the flows from the goods and resources markets.

Correct AnswerverifiedShow Answer

Tom takes 20 minutes to burn a CD and 5 minutes to make a sandwich. Jerry takes 15 minutes to burn a CD and 3 minutes to make a sandwich. If Tom and Jerry trade

Correct AnswerverifiedShow Answer

Moving on a bowed out PPF, what happens to the opportunity cost of a good as more of it is produced?

Correct AnswerverifiedThe bowed out PPF indicates th...View AnswerShow Answer

Increasing opportunity costs suggests that

Correct AnswerverifiedShow Answer

"Allocative efficiency requires that the maximum number of people have access to all of the goods and services that our economy produces." Is this statement true or false? Explain your answer.

Correct AnswerverifiedThe statement is false. Allocative effic...View AnswerShow Answer

-Refer to the production possibilities frontier in the figure above. Which production point indicates that resources are NOT fully utilized or are misallocated?

Correct AnswerverifiedShow Answer

The most anyone is willing to pay for another purse is $30. Currently the price of a purse is $40, and the cost of producing another purse is $50. The marginal benefit of a purse is

Correct AnswerverifiedShow Answer

We measure the marginal of a good by what a for another unit of the good.

Correct AnswerverifiedShow Answer

What is the relationship between the bowed out shape of the production possibilities frontier and the increasing opportunity cost of a good as more of it is produced?

Correct AnswerverifiedThe production possibilities frontier is...View AnswerShow Answer

-As output moves from point a to point b to point c along the PPF in the above figure, the opportunity cost of one more unit of good X

Correct AnswerverifiedShow Answer

Correct Answer
verified
The allocatively efficient quantity of a...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
When moving along the production possibi...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The bowed out PPF indicates th...
View Answer

Correct Answer
verified

Correct Answer
verified
The statement is false. Allocative effic...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The production possibilities frontier is...
View Answer

Correct Answer
verified