Question 1

2, a country would grow slowest by producing at point A)  A. B)  B. C)  C. D)  D." class="answers-bank-image d-inline" rel="preload" >
-In the above figure, once on PPF2, a country would grow slowest by producing at point

Accepted Answer

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

Question 2

To obtain the gains available from comparative advantage, individuals or countries must do more than specialize; they must also

Accepted Answer

A)   save.
B)   invest.
C)   engage in research and development.
D)   trade.E) All of the above
F) None of the above

Question 3

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

Accepted Answer

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

Question 4

China's State Council has encouraged more spending to "improve transportation links and other infrastructure...." It will also "step up its spending on vocational training and other educational programs for adults." www.nytimes.com, Keith Bradsher, October 19, 2008
Suppose that capital goods are on the vertical axis while consumption goods are on the horizontal axis of China's PPF. As a result of enacting the policies, we would expect
I. an expansion of China's production possibilities.
II. capital accumulation.
III. an increase in human capital.

Accepted Answer

A)   i and II only.
B)   i, II and III.
C)   i and III only.
D)   II and III only.E) All of the above
F) B) and C)

Question 5

Explain how the production possibilities frontier illustrates scarcity.

Accepted Answer

The PPF illustrates ...

Question 6

Marginal benefit is the benefit ________ one more unit of the good and ________ of the good increases.

Accepted Answer

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

Question 7

The term "market" refers to

Accepted Answer

A)   physical structures only.
B)   locations where buyers and sellers physically meet.
C)   any arrangement that enables buyers and sellers to get information and trade with one another.
D)   trading arrangements that have been approved by the government.E) B) and C)
F) C) and D)

Question 8

-Point C on the production possibilities frontier in the above diagram illustrates

Accepted Answer

A)   a point that achieves production efficiency.
B)   a combination of goods and services that cannot be produced efficiently.
C)   all goods and services that are desired but cannot be produced due to scarce resources.
D)   a production point that has underutilization of resources.E) All of the above
F) None of the above

Question 9

A system of property rights

Accepted Answer

A)   encourages economic growth by creating incentives to invest in capital and to be innovative.
B)   discourages economic growth by discouraging the development of new ideas and ways of doing things.
C)   reduces the efficiency of government, which reduces the growth rate of the economy over time.
D)   encourages investment but discourages entrepreneurial activity, so the effect on economic growth is uncertain.E) A) and B)
F) All of the above

Question 10

-Two nations can produce computers and software in the amounts given in the table above. Does either nation have an absolute advantage in producing the products? Which nation has a comparative advantage in computers? Which nation has a comparative advantage in software? Explain your answers.

Accepted Answer

Nation B has an absolute advantage in pr...

Question 11

-Suppose a factory can be designed to produce either trucks or cars. The figure above shows the marginal cost and marginal benefit of producing trucks in terms of the forgone cars.
a) What is the marginal benefit of the 25th truck?
b) What is the marginal cost of the 25th truck?
c) Should the 25th truck be produced? Why or why not.
d) What is the marginal benefit of the 75th truck?
e) What is the marginal cost of the 75th truck?
f) Should the 75th truck be produced? Why or why not?
g) What is the allocatively efficient quantity of trucks?

Accepted Answer

a) 3 cars per truck
b) 1 car per truck
c...

Question 12

Capital accumulation definitely

Accepted Answer

A)   has no impact on the production possibilities frontier.
B)   shifts the production possibilities frontier inward.
C)   makes the production possibilities frontier steeper.
D)   shifts the production possibilities frontier outward.E) All of the above
F) B) and D)

Question 13

Allocative efficiency occurs when

Accepted Answer

A)   we cannot produce more of any good without giving up some other good that we value more highly.
B)   we cannot produce more of any one good without giving up some other good.
C)   marginal benefit exceeds marginal cost.
D)   opportunity costs are decreasing.E) All of the above
F) A) and B)

Question 14

At one point along a PPF, 10 pizzas and 7 sandwiches can be produced. At another point along the same PPF, 9 pizzas and 10 sandwiches can be produced. The opportunity cost of a pizza between these points is ________ per pizza.

Accepted Answer

A)   7/10 of a sandwich
B)   10/7 of a sandwich
C)   1/3 of a sandwich
D)   3 sandwichesE) None of the above
F) A) and B)

Question 15

One point on a PPF shows production levels at 50 tons of coffee and 100 tons of bananas. Remaining on the PPF, an increase of banana production to 140 tons shows coffee production at 30 tons. Still remaining on the PPF, coffee production at 10 tons allows banana production at 160 tons. The opportunity cost of a ton of bananas is

Accepted Answer

A)   constant because coffee production decreased by the same amount each time.
B)   decreasing, since the increase in banana production is less at each point considered.
C)   16 to 1, that is every 1 ton of coffee given up will result in 16 more tons of bananas.
D)   increasing from 1/2 ton of coffee per ton of bananas to 1 ton of coffee per ton of bananas.E) A) and B)
F) All of the above

Question 16

A computer software program is most strongly an example of

Accepted Answer

A)   real property.
B)   fiat property.
C)   intellectual property.
D)   vicarious property.E) C) and D)
F) A) and D)

Question 17

-Two countries, Blue Violet and Sweet Pansy, produce only two goods: teapots and coffeepots. The table above gives their production possibilities.

Accepted Answer

A)   Blue Violet has a comparative advantage in teapots.
B)   Sweet Pansy has a comparative advantage in teapots.
C)   Both have a comparative advantage in teapots.
D)   Sweet Pansy has an absolute advantage in teapots.E) C) and D)
F) A) and C)

Question 18

-In the figure above, Joe is producing at point A. Joe's opportunity cost of producing one shirt is

Accepted Answer

A)   5/3 of a pair of pants per shirt.
B)   3/5 of a pair of pants per shirt.
C)   5 pairs of pants per shirt.
D)   2 pairs of pants per shirt.E) None of the above
F) B) and C)

Question 19

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 20

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) None of the above
F) C) and D)

Exam 2: The Economic Problem

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A computer software program is most strongly an example of

Correct Answer
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Allocative efficiency occurs when

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A system of property rights

Correct Answer
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The term "market" refers to

Correct Answer
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-In the above figure, once on PPF₂, a country would grow slowest by producing at point

Correct Answer
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At one point along a PPF, 10 pizzas and 7 sandwiches can be produced. At another point along the same PPF, 9 pizzas and 10 sandwiches can be produced. The opportunity cost of a pizza between these points is ________ per pizza.

Correct Answer
verified

-In the figure above, Joe is producing at point A. Joe's opportunity cost of producing one shirt is

Correct Answer
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-Two nations can produce computers and software in the amounts given in the table above. Does either nation have an absolute advantage in producing the products? Which nation has a comparative advantage in computers? Which nation has a comparative advantage in software? Explain your answers.

Correct Answer
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Nation B has an absolute advantage in pr...
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Explain how the production possibilities frontier illustrates scarcity.

Correct Answer
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The PPF illustrates ...
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Generally, opportunity costs increase and the production possibilities frontier bows outward. Why?

Correct Answer
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-Point C on the production possibilities frontier in the above diagram illustrates

Correct Answer
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-Two countries, Blue Violet and Sweet Pansy, produce only two goods: teapots and coffeepots. The table above gives their production possibilities.

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

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

Capital accumulation definitely

Correct Answer
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To obtain the gains available from comparative advantage, individuals or countries must do more than specialize; they must also

Correct Answer
verified

Correct Answer
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a) 3 cars per truck
b) 1 car per truck
c...
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Marginal benefit is the benefit one more unit of the good and of the good increases.

Correct Answer
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Exam 2: The Economic Problem

Correct AnswerverifiedShow Answer

A computer software program is most strongly an example of

Correct AnswerverifiedShow Answer

Allocative efficiency occurs when

Correct AnswerverifiedShow Answer

A system of property rights

Correct AnswerverifiedShow Answer

The term "market" refers to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

-In the above figure, once on PPF2, a country would grow slowest by producing at point

Correct AnswerverifiedShow Answer

At one point along a PPF, 10 pizzas and 7 sandwiches can be produced. At another point along the same PPF, 9 pizzas and 10 sandwiches can be produced. The opportunity cost of a pizza between these points is ________ per pizza.

Correct AnswerverifiedShow Answer

-In the figure above, Joe is producing at point A. Joe's opportunity cost of producing one shirt is

Correct AnswerverifiedShow Answer

-Two nations can produce computers and software in the amounts given in the table above. Does either nation have an absolute advantage in producing the products? Which nation has a comparative advantage in computers? Which nation has a comparative advantage in software? Explain your answers.

Correct AnswerverifiedNation B has an absolute advantage in pr...View AnswerShow Answer

Explain how the production possibilities frontier illustrates scarcity.

Correct AnswerverifiedThe PPF illustrates ...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

-Point C on the production possibilities frontier in the above diagram illustrates

Correct AnswerverifiedShow Answer

-Two countries, Blue Violet and Sweet Pansy, produce only two goods: teapots and coffeepots. The table above gives their production possibilities.

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

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

Capital accumulation definitely

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To obtain the gains available from comparative advantage, individuals or countries must do more than specialize; they must also

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Correct Answerverifieda) 3 cars per truckb) 1 car per truckc...View AnswerShow Answer

Marginal benefit is the benefit ________ one more unit of the good and ________ of the good increases.

Correct AnswerverifiedShow Answer

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-In the above figure, once on PPF₂, a country would grow slowest by producing at point

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Nation B has an absolute advantage in pr...
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The PPF illustrates ...
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The production possibilities frontier is...
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Correct Answer
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Correct Answer
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a) 3 cars per truck
b) 1 car per truck
c...
View Answer

Marginal benefit is the benefit one more unit of the good and of the good increases.

Correct Answer
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