Question 1

Which of the following is the best definition of economic growth?

Accepted Answer

A)   The investment in capital and consumption goods by an economy
B)   The opportunity cost of capital
C)   The opportunity cost of consumption
D)   Increased development of land and entrepreneurship
E)   The sustained expansion of production possibilitiesF) B) and E)
G) B) and D)

Question 2

-Gabriel operates a ranch in Idaho where he raises cattle and grows potatoes.The figure above illustrates his production possibilities frontier.What is Gabriel's opportunity cost of raising another 100 cows?

Accepted Answer

A)   1.25 tons of potatoes
B)   5.0 tons of potatoes
C)   3.0 tons of potatoes
D)   1.0 ton of potatoes
E)   100 cowsF) B) and E)
G) C) and D)

Question 3

As an economy produces more of one of the goods on a bowed out production possibilities frontier,what happens to the opportunity cost of producing the good?

Accepted Answer

A)   It remains constant.
B)   It decreases.
C)   It increases.
D)   It might increase, decrease, or remain constant depending on how much people value the additional units of the good.
E)   None of these depicts what happens to opportunity cost.F) A) and C)
G) A) and D)

Question 4

A point on the production possibilities frontier reflects an

Accepted Answer

A)   attainable point with full employment of all resources.
B)   attainable point without full employment of all resources.
C)   unattainable point with full employment of all resources.
D)   unattainable point without full employment of all resources.
E)   None of the above answers is correct.F) A) and B)
G) A) and C)

Question 5

When production efficiency does NOToccur,
i.an economy is producing at a point within its PPF.
ii.there are unemployed resources.
iii.allocative efficiency cannot occur.

Accepted Answer

A)   i only
B)   i and ii
C)   iii only
D)   i and iii
E)   i, ii, and iiiF) D) and E)
G) B) and C)

Question 6

To increase its economic growth,a nation should

Accepted Answer

A)   limit the number of people in college because they produce nothing.
B)   encourage spending on goods and services.
C)   encourage education because that increases the quality of labor.
D)   increase current consumption.
E)   eliminate expenditure on capital goods.F) A) and C)
G) A) and B)

Question 7

Relative to Al,Joe has ________ if Joe can produce a good at a lower opportunity cost than Al.

Accepted Answer

A)   a comparative advantage
B)   more production efficiency
C)   a comparative benefit
D)   a marginal benefit
E)   a free lunchF) None of the above
G) All of the above

Question 8

-The figure above shows the production possibilities frontier for a country.If the economy is operating at point B,then the opportunity cost of another million gallons of milk is

Accepted Answer

A)   4 gallons of ice cream for a gallon of milk.
B)   3 gallons of ice cream for a gallon of milk.
C)   1 gallon of ice cream for a gallon of milk.
D)   1/3 of a gallon of ice cream for a gallon of milk.
E)   zero because after producing another million gallons of milk then zero gallons of ice cream are produced.F) All of the above
G) A) and D)

Question 9

If the production possibilities frontier between bottled water and water in a jug is a straight line,which of the following statements would be correct?

Accepted Answer

A)   A large amount of unemployment must exist.
B)   Resources are equally productive at producing either product.
C)   There is no tradeoff between the two goods.
D)   There is no decrease in the production of one good when the production of the other is increased.
E)   Producing more of one good gives the economy a free lunch.F) B) and D)
G) A) and E)

Question 10

The idea of increasing opportunity cost is reflected in the

Accepted Answer

A)   bowed out shape of the production possibilities frontier.
B)   bowed in shape of the production possibilities frontier.
C)   linear shape of the production possibilities frontier.
D)   positive slope of the production possibilities frontier.
E)   fact that the PPF shows there are unattainable production points.F) All of the above
G) C) and D)

Question 11

The negative slope of the production possibilities frontier represents the idea

Accepted Answer

A)   that free lunches are possible.
B)   of tradeoffs, that in order to produce more of one good, the nation must produce less of another.
C)   of unemployment.
D)   of inefficient production.
E)   that prices rise as less is produced.F) A) and C)
G) B) and C)

Question 12

The figure above shows Liz's and Joe's production possibilities for Salads and Smoothies.
-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.F) None of the above
G) A) and B)

Question 13

Consider a PPF with consumption goods on the horizontal axis and capital goods on the vertical axis.If the country operates on its PPF near its ________ axis,this country ________.

Accepted Answer

A)   vertical; will experience greater economic growth
B)   vertical; will not face opportunity costs
C)   horizontal; will have a larger chance at economic growth
D)   horizontal; faces larger trade offs
E)   vertical; is operating at an inefficient pointF) A) and D)
G) A) and E)

Question 14

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 bananasF) A) and D)
G) A) and C)

Question 15

If the production possibilities frontier between two goods is a straight line,then the

Accepted Answer

A)   opportunity cost is not a ratio.
B)   resources are equally productive in both goods.
C)   line does not qualify as a production possibilities frontier because the unattainable production points are too close to the inefficient production points.
D)   Both answers A and C are correct.
E)   Both answers A and B are correct.F) A) and E)
G) All of the above

Question 16

-The figure above shows the production possibilities frontier for a country.If the country is producing at point D,then the

Accepted Answer

A)   resources are being used efficiently.
B)   technology associated with producing SUVs and compact cars is advancing.
C)   resources are not being used efficiently and/or are unemployed.
D)   production of SUVs and compact cars is maximized.
E)   None of the above answers are correct because it is not possible to produce at point D.F) B) and D)
G) B) and C)

Question 17

-The above figure shows the production possibility frontier for a country.What is the opportunity cost per ton of rice to move from point B to point D?

Accepted Answer

A)   1000 bottles of wine
B)   500 bottles of wine
C)   2 bottles of wine
D)   1/2 of a bottle of wine
E)   None of the above answers is correct.F) A) and B)
G) A) and C)

Question 18

The production possibilities frontier is the boundary between the

Accepted Answer

A)   goods and services that the economy can produce.
B)   attainable and unattainable combinations of goods and services.
C)   wanted and unwanted combinations of goods and services.
D)   rational and irrational choices facing a society.
E)   affordable and unaffordable combinations of production.F) All of the above
G) A) and B)

Question 19

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.F) A) and E)
G) C) and D)

Question 20

Scott and Cindy both produce only pizza and tacos.In one hour,Scott can produce 20 pizzas or 40 tacos.In one hour,Cindy can produce 30 pizzas or 40 tacos.Cindy's opportunity cost of producing 1 taco is

Accepted Answer

A)   3/4 of a pizza.
B)   1 pizza.
C)   30 pizzas.
D)   40 pizzas.
E)   1 1/3 tacos.F) A) and D)
G) A) and C)

Exam 3: The Economic Problem

Relative to Al,Joe has ________ if Joe can produce a good at a lower opportunity cost than Al.

Correct Answer
verified

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
verified

Correct Answer
verified

If the production possibilities frontier between two goods is a straight line,then the

Correct Answer
verified

The negative slope of the production possibilities frontier represents the idea

Correct Answer
verified

When production efficiency does NOToccur, i.an economy is producing at a point within its PPF. ii.there are unemployed resources. iii.allocative efficiency cannot occur.

Correct Answer
verified

-Gabriel operates a ranch in Idaho where he raises cattle and grows potatoes.The figure above illustrates his production possibilities frontier.What is Gabriel's opportunity cost of raising another 100 cows?

Correct Answer
verified

The production possibilities frontier is the boundary between the

Correct Answer
verified

If the production possibilities frontier between bottled water and water in a jug is a straight line,which of the following statements would be correct?

Correct Answer
verified

-The figure above shows the production possibilities frontier for a country.If the economy is operating at point B,then the opportunity cost of another million gallons of milk is

Correct Answer
verified

Which of the following is the best definition of economic growth?

Correct Answer
verified

As an economy produces more of one of the goods on a bowed out production possibilities frontier,what happens to the opportunity cost of producing the good?

Correct Answer
verified

A point on the production possibilities frontier reflects an

Correct Answer
verified

Consider a PPF with consumption goods on the horizontal axis and capital goods on the vertical axis.If the country operates on its PPF near its axis,this country .

Correct Answer
verified

-The figure above shows the production possibilities frontier for a country.If the country is producing at point D,then the

Correct Answer
verified

-The above figure shows the production possibility frontier for a country.What is the opportunity cost per ton of rice to move from point B to point D?

Correct Answer
verified

The idea of increasing opportunity cost is reflected in the

Correct Answer
verified

Scott and Cindy both produce only pizza and tacos.In one hour,Scott can produce 20 pizzas or 40 tacos.In one hour,Cindy can produce 30 pizzas or 40 tacos.Cindy's opportunity cost of producing 1 taco is

Correct Answer
verified

To increase its economic growth,a nation should

Correct Answer
verified

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

Exam 3: The Economic Problem

Relative to Al,Joe has ________ if Joe can produce a good at a lower opportunity cost than Al.

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

Correct AnswerverifiedShow Answer

If the production possibilities frontier between two goods is a straight line,then the

Correct AnswerverifiedShow Answer

The negative slope of the production possibilities frontier represents the idea

Correct AnswerverifiedShow Answer

When production efficiency does NOToccur, i.an economy is producing at a point within its PPF. ii.there are unemployed resources. iii.allocative efficiency cannot occur.

Correct AnswerverifiedShow Answer

-Gabriel operates a ranch in Idaho where he raises cattle and grows potatoes.The figure above illustrates his production possibilities frontier.What is Gabriel's opportunity cost of raising another 100 cows?

Correct AnswerverifiedShow Answer

The production possibilities frontier is the boundary between the

Correct AnswerverifiedShow Answer

If the production possibilities frontier between bottled water and water in a jug is a straight line,which of the following statements would be correct?

Correct AnswerverifiedShow Answer

-The figure above shows the production possibilities frontier for a country.If the economy is operating at point B,then the opportunity cost of another million gallons of milk is

Correct AnswerverifiedShow Answer

Which of the following is the best definition of economic growth?

Correct AnswerverifiedShow Answer

As an economy produces more of one of the goods on a bowed out production possibilities frontier,what happens to the opportunity cost of producing the good?

Correct AnswerverifiedShow Answer

A point on the production possibilities frontier reflects an

Correct AnswerverifiedShow Answer

Consider a PPF with consumption goods on the horizontal axis and capital goods on the vertical axis.If the country operates on its PPF near its ________ axis,this country ________.

Correct AnswerverifiedShow Answer

-The figure above shows the production possibilities frontier for a country.If the country is producing at point D,then the

Correct AnswerverifiedShow Answer

-The above figure shows the production possibility frontier for a country.What is the opportunity cost per ton of rice to move from point B to point D?

Correct AnswerverifiedShow Answer

The idea of increasing opportunity cost is reflected in the

Correct AnswerverifiedShow Answer

Scott and Cindy both produce only pizza and tacos.In one hour,Scott can produce 20 pizzas or 40 tacos.In one hour,Cindy can produce 30 pizzas or 40 tacos.Cindy's opportunity cost of producing 1 taco is

Correct AnswerverifiedShow Answer

To increase its economic growth,a nation should

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

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Consider a PPF with consumption goods on the horizontal axis and capital goods on the vertical axis.If the country operates on its PPF near its axis,this country .

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified