Question 1

Claire and Dag are farmers who produce beef and corn. In a year, Claire can produce 16 tons of beef or 40 bushels of corn, while Dag can produce 5 tons of beef or 25 bushels of corn. The opportunity cost of producing a ton of beef is

Accepted Answer

A)   10 bushels of corn for Dag and 8 bushels of corn for Claire.
B)   5 bushels of corn for Dag and 2.5 bushels of corn for Claire.
C)   20 bushels of corn for Dag and 50 bushels of corn for Claire.
D)   36.5 days for Dag and 45.6 days for Claire.E) B) and D)
F) B) and C)

Question 2

-The opportunity cost of producing a unit of consumption at point b in the figure ________ point a.

Accepted Answer

A)   is greater than at
B)   is less than at
C)   cannot be compared with
D)   is the same asE) A) and B)
F) A) and C)

Question 3

-The above table shows production points on Sweet-Tooth Land's production possibilities frontier. Which of the following statements is TRUE?

Accepted Answer

A)   Producing 0 chocolate bars and 100 cans of cola is both attainable and efficient.
B)   Producing 20 chocolate bars and 80 cans of cola is attainable, but inefficient.
C)   Producing 30 chocolate bars and 38 cans of cola is only attainable with an increase in technology.
D)   Producing 40 chocolate bars and 0 cans of cola is unattainable and inefficient.E) B) and C)
F) C) and D)

Question 4

-In the figure above, the curve is known as the

Accepted Answer

A)   production possibilities frontier.
B)   substitution options frontier.
C)   production function.
D)   opportunity cost curve.E) A) and B)
F) A) and C)

Question 5

-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 6

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) B) and D)
F) A) and B)

Question 7

Production possibilities 
-Based on the above table, as the production of pizza increases, the opportunity cost of pizza in terms of forgone cases of soda

Accepted Answer

A)   increases.
B)   decreases.
C)   does not change.
D)   initially increases then decreases.E) A) and B)
F) C) and D)

Question 8

-In the production possibilities frontier depicted in the figure above, which of the following combinations of hats and bananas is unattainable?

Accepted Answer

A)   4 million pounds of bananas and 4 million hats
B)   2 million pounds of bananas and 5 million hats
C)   0 pounds of bananas and 6 million hats
D)   1 million pounds of bananas and 3 million hatsE) B) and D)
F) C) and D)

Question 9

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

Question 10

-Refer to the table above, which gives five points on a nation's PPF. As we increase the production of X,

Accepted Answer

A)   the output of Y increases.
B)   unemployment increases.
C)   the opportunity cost of each new unit of X increases.
D)   the opportunity cost of each new unit of X decreases.E) None of the above
F) A) and B)

Question 11

-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, China's PPF will

Accepted Answer

A)   shift outward.
B)   shift inward.
C)   rotate outward.
D)   become flatter.E) A) and D)
F) A) and B)

Question 12

The United States has an absolute advantage in producing sugar over all of the other sugar producing countries. Does this fact mean that we should not import any sugar from the other countries?

Accepted Answer

Having an absolute advantage doesn't mea...

Question 13

Before the first Gulf War in 1991, Kuwait had the capacity to produce a certain amount of oil from its oil wells. After the war, it found that capacity greatly diminished because the oil wells had been set on fire. Draw Kuwait's PPF before and after the war, assuming that the only two goods produced are oil and food. Further assume that setting the oil wells on fire did not affect Kuwait's ability to produce food. Explain why the PPF before the war is different from the PPF after the war.

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> When a PPF is drawn, we draw it for a f...

Question 14

A society that is producing on its production possibilities frontier is

Accepted Answer

A)   not utilizing all of its resources.
B)   not being technologically efficient.
C)   producing too much output.
D)   fully utilizing all of its productive resources.E) B) and D)
F) A) and D)

Question 15

Susan likes to drink sodas. The ________ soda Susan drinks, the ________ of the last soda.

Accepted Answer

A)   more; higher the marginal benefit
B)   less; higher the opportunity cost
C)   less; lower the marginal benefit
D)   more; lower the marginal benefitE) A) and B)
F) A) and D)

Question 16

The more we have of a good or service, the smaller is its marginal benefit and the less we are willing to pay for an additional unit of it.

Accepted Answer

A) True 
 B)False

Question 17

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 18

What is comparative advantage? Give an example.

Accepted Answer

Comparative advantage is the ability of ...

Question 19

The kitchen manager at an Italian restaurant is deciding what assignments he should give to his two cooks, John and David. John can make 25 pizzas or 40 servings of pasta per hour and David can make 20 pizzas or 30 servings of pasta. Which of the following should be the manager's choice?

Accepted Answer

A)   Fire David because he is not as productive as John. John will do both jobs.
B)   John will make pizza because he has comparative advantage in making pizza.
C)   David will make pizza because he has comparative advantage in making pizza.
D)   John and David both will spend half their time making pizza and half their time making pasta because each has a comparative advantage in making pizza.E) A) and C)
F) None of the above

Question 20

-In the above figure, at point b what is the opportunity cost of producing 2 more audio tapes?

Accepted Answer

A)   1/2 video tape per audio tape
B)   1 video tape per audio tape
C)   6 video tapes per audio tape
D)   There is no opportunity cost.E) C) and D)
F) B) and D)

Exam 2: The Economic Problem

Correct Answer
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When a PPF is drawn, we draw it for a f...
View Answer

A society that is producing on its production possibilities frontier is

Correct Answer
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Production possibilities -Based on the above table, as the production of pizza increases, the opportunity cost of pizza in terms of forgone cases of soda

Correct Answer
verified

The United States has an absolute advantage in producing sugar over all of the other sugar producing countries. Does this fact mean that we should not import any sugar from the other countries?

Correct Answer
verified
Having an absolute advantage doesn't mea...
View Answer

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

Correct Answer
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Correct Answer
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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

The kitchen manager at an Italian restaurant is deciding what assignments he should give to his two cooks, John and David. John can make 25 pizzas or 40 servings of pasta per hour and David can make 20 pizzas or 30 servings of pasta. Which of the following should be the manager's choice?

Correct Answer
verified

-In the above figure, at point b what is the opportunity cost of producing 2 more audio tapes?

Correct Answer
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The more we have of a good or service, the smaller is its marginal benefit and the less we are willing to pay for an additional unit of it.

Correct Answer
verified

What is comparative advantage? Give an example.

Correct Answer
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Comparative advantage is the ability of ...
View Answer

Claire and Dag are farmers who produce beef and corn. In a year, Claire can produce 16 tons of beef or 40 bushels of corn, while Dag can produce 5 tons of beef or 25 bushels of corn. The opportunity cost of producing a ton of beef is

Correct Answer
verified

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

Correct Answer
verified

-The above table shows production points on Sweet-Tooth Land's production possibilities frontier. Which of the following statements is TRUE?

Correct Answer
verified

-In the production possibilities frontier depicted in the figure above, which of the following combinations of hats and bananas is unattainable?

Correct Answer
verified

-Refer to the table above, which gives five points on a nation's PPF. As we increase the production of X,

Correct Answer
verified

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

-The opportunity cost of producing a unit of consumption at point b in the figure ________ point a.

Correct Answer
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-In the figure above, the curve is known as the

Correct Answer
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Susan likes to drink sodas. The soda Susan drinks, the of the last soda.

Correct Answer
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Exam 2: The Economic Problem

Correct Answerverified When a PPF is drawn, we draw it for a f...View AnswerShow Answer

A society that is producing on its production possibilities frontier is

Correct AnswerverifiedShow Answer

Production possibilities -Based on the above table, as the production of pizza increases, the opportunity cost of pizza in terms of forgone cases of soda

Correct AnswerverifiedShow Answer

The United States has an absolute advantage in producing sugar over all of the other sugar producing countries. Does this fact mean that we should not import any sugar from the other countries?

Correct AnswerverifiedHaving an absolute advantage doesn't mea...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

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

The kitchen manager at an Italian restaurant is deciding what assignments he should give to his two cooks, John and David. John can make 25 pizzas or 40 servings of pasta per hour and David can make 20 pizzas or 30 servings of pasta. Which of the following should be the manager's choice?

Correct AnswerverifiedShow Answer

-In the above figure, at point b what is the opportunity cost of producing 2 more audio tapes?

Correct AnswerverifiedShow Answer

The more we have of a good or service, the smaller is its marginal benefit and the less we are willing to pay for an additional unit of it.

Correct AnswerverifiedShow Answer

What is comparative advantage? Give an example.

Correct AnswerverifiedComparative advantage is the ability of ...View AnswerShow Answer

Claire and Dag are farmers who produce beef and corn. In a year, Claire can produce 16 tons of beef or 40 bushels of corn, while Dag can produce 5 tons of beef or 25 bushels of corn. The opportunity cost of producing a ton of beef is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

-The above table shows production points on Sweet-Tooth Land's production possibilities frontier. Which of the following statements is TRUE?

Correct AnswerverifiedShow Answer

-In the production possibilities frontier depicted in the figure above, which of the following combinations of hats and bananas is unattainable?

Correct AnswerverifiedShow Answer

-Refer to the table above, which gives five points on a nation's PPF. As we increase the production of X,

Correct AnswerverifiedShow Answer

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

-The opportunity cost of producing a unit of consumption at point b in the figure ________ point a.

Correct AnswerverifiedShow Answer

-In the figure above, the curve is known as the

Correct AnswerverifiedShow Answer

Susan likes to drink sodas. The ________ soda Susan drinks, the ________ of the last soda.

Correct AnswerverifiedShow Answer

Correct Answer
verified
When a PPF is drawn, we draw it for a f...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Having an absolute advantage doesn't mea...
View Answer

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Comparative advantage is the ability of ...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

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

Correct Answer
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Correct Answer
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Susan likes to drink sodas. The soda Susan drinks, the of the last soda.

Correct Answer
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