1. With given resources and technology, a country can produceeither 100 million cars or 50 million tons of paper. What is theopportunity cost of producing one ton of paper?
a.) 500,000 cars
b.) 100 million cars
c.) 2 million cars
d.) None
2. With its given resources and technology, an economy canproduce either 100 units of good Y or 50 units of good X. For eachof the following combinations of goods indicate whether thecombination is NF (not feasible), FE (feasible and efficient), orFI (feasible but inefficient)
50 units of good Y and 30 units of good X _____
80 units of good Y and 10 units good X ______
15 units of good Y and 40 units of good X _____
3. John's total cost of producing 12 units is $120 and his totalcost of producing 13 units is $150. What is the marginal cost ofproducing the last unit, in other words the marginal cost ofproducing unit 13?
1. With given resources and technology, a country can produceeither 100 million cars or 50 million tons of paper. What is theopportunity cost of producing one ton of paper?
a.) 500,000 cars
b.) 100 million cars
c.) 2 million cars
d.) None
2. With its given resources and technology, an economy canproduce either 100 units of good Y or 50 units of good X. For eachof the following combinations of goods indicate whether thecombination is NF (not feasible), FE (feasible and efficient), orFI (feasible but inefficient)
50 units of good Y and 30 units of good X _____
80 units of good Y and 10 units good X ______
15 units of good Y and 40 units of good X _____
3. John's total cost of producing 12 units is $120 and his totalcost of producing 13 units is $150. What is the marginal cost ofproducing the last unit, in other words the marginal cost ofproducing unit 13?
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Related questions
A bowed out PPF reflects which of the following ideas?
i.increasing opportunity cost
ii. resources are not equally productive in all activities
iii. prices of goods increase over time
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I only |
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I and iii |
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ii and iii |
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I and ii |
1 point
QUESTION 2
With no international trade, a country ________ consume at a point outside of its PPF; with international trade, a country ________ consume at a point outside of its PPF.
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can; cannot |
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cannot; can |
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cannot; cannot |
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can; can |
1 point
QUESTION 3
If the production possibilities frontier between two goods is a straight line, then the
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the line does not qualify as a production possibilities frontier because the unattainable production points are too close to the inefficient production points. |
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opportunity cost is not a ratio. |
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increasing opportunity costs. |
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resources are equally productive in both goods. |
1 point
QUESTION 4
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?
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It might increase, decrease, or remain constant depending on how much people value the additional units of the good. |
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It decreases. |
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It increases. |
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It remains constant. |
1 point
QUESTION 5
"Comparative advantage" is defined as a situation in which one person can produce
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more of a good than another person. |
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a good for a lower dollar cost than another person. |
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a good for a lower opportunity cost than another person. |
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more of all goods than another person. |
1 point
QUESTION 6
When a production possibilities frontier is bowed outward, as more of one good is produced, its opportunity cost
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increases. |
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decreases. |
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might increase, decrease, or remain constant depending on how much people value the additional units of the good. |
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remains constant. |
1 point
QUESTION 7
A bowed out production possibility frontier shows that the
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opportunity cost relationship is linear. |
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the opportunity cost of a good is constant as more of the good is produced. |
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the opportunity cost of a good increase as more of the good is produced. |
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the opportunity cost of a good decrease as more of the good is produced. |
1 point
QUESTION 8
Which of the following statements is correct?
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The production possibilities frontier shows that there are no limits to production. |
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Any point on or within the PPF is production efficient. |
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If capital is idle, the economy is producing at its full potential. |
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A tradeoff is a limit that forces an exchange or a substitution of one thing for something else. |
1 point
QUESTION 9
A major earthquake occurs in the central part of the United States. What impact would this have on the nation's production possibilities frontier and why?
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A tradeoff would occur to replace the resources and goods destroyed. |
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It would shift inward because some of the nation's resources, such as capital and labor, would be destroyed. |
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It would shift outward because unemployment would be reduced. |
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Nothing would happen because the nation would still have the same capabilities. |
1 point
QUESTION 10
When a nation is producing on its production possibilities frontier, if more resources are used to produce one good, then the production of other goods
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must increase. |
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must decrease. |
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must remain the same. |
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must change but they might increase or decrease. |
1 point
QUESTION 11
Moving along a country's PPF, a reasonable opportunity costs increase is that
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unemployment increases as a country produce more and more of one good. |
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unemployment decreases as a country produces more and more of one good. |
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some resources are better suited for producing one good rather than the other. |
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technology declines as a country produce more and more of one good. |
1 point
QUESTION 12
A reason the production possibilities frontier exists is
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scarcity of resources and unlimited technology. |
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unemployment. |
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scarcity of resources. |
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unlimited resources and technology. |
1 point
QUESTION 13
Moving from one point to another on a production possibilities frontier implies
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increasing the production of one good and decreasing the production of another. |
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increasing the production of both goods. |
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decreasing the production of both goods. |
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holding the production levels of both goods constant. |
1 point
QUESTION 14
Specialization and trade make a country better off because with trade the country can consume at a point
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outside its production possibilities frontier. |
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on its trading partner's production possibilities frontier. |
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inside its production possibilities frontier. |
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on its production possibilities frontier. |
1 point
QUESTION 15
The production possibilities frontier is the
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the boundary between the combinations of goods and services that can be produced and the combinations that cannot be produced when technology is changing. |
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the minimum output that can be produced when resources are used inefficiently. |
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the boundary between the combinations of goods and services that can be produced and the combinations that cannot be produced, given the available factors of production and the state of technology. |
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maximum output that can be produced at an opportunity cost of zero. |
1 point
QUESTION 16
The opportunity cost of economic growth is ________ and the benefit of economic growth is ________.
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decreased current consumption; decreased future consumption |
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decreased current consumption; increased future consumption |
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increased current consumption; increased future consumption |
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increased current consumption; decreased future consumption |
1 point
QUESTION 17
In terms of a nation's production possibilities frontier, what impact does international trade have?
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International trade shifts the nation's production possibilities frontier outward. |
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International trade shifts the production possibilities frontier outward for the goods that are exported and inward for the goods that are imported. |
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International trade shifts the nation's production possibilities frontier inward. |
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International trade allows the nation to consume at a point outside its production possibilities frontier. |
1 point
QUESTION 18
The production possibilities frontier illustrates the
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goods and services that people want. |
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limits to people's wants. |
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resources the economy possesses, but not it is the level of technology. |
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maximum combinations of goods and services that can be produced. |
1 point
QUESTION 19
As we move along the production possibilities frontier,
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the possibilities of tradeoffs diminish. |
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the production of one good increases as the production of the other good decreases. |
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more of both goods can be produced. |
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a tradeoff is not possible because nations need all goods. |
1 point
QUESTION 20
What is the opportunity cost of economic growth?
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Eliminate scarcity |
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Land. |
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Capital goods. |
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Consumption of goods. |
1 point
QUESTION 21
Which of the following statements is correct?
i.As the economy grows, the opportunity costs of economic growth decrease.
ii. Economic growth has no opportunity cost.
iii. The opportunity cost of economic growth is current consumption forgone.
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ii only |
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iii only |
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I only |
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I and iii |
1 point
QUESTION 22
Does economic growth depend upon which of the following?
i. Increasing the quantity of labor.
ii. Lowering the prices of goods and services.
iii. Advancing technology.
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ii only. |
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I only. |
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I and iii. |
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iii only. |
1 point
QUESTION 23
When drawing a production possibilities frontier, which of the following is held constant?
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the amount of money in the economy |
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the prices of goods and services |
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the quantity of the goods and services that are produced |
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the available factors of production and the state of technology |
1 point
QUESTION 24
To increase its economic growth, a nation should
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encourage spending on goods and services. |
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increase in current consumption. |
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encourage education because that increases the quality of labor. |
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limit the number of people in college because they produce nothing. |
1 point
QUESTION 25
The opportunity cost of one more slice of pizza in terms of sodas is the
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some pizza slices we have to give up to get one extra soda. |
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the total number of sodas that we have divided by the total number of pizza slices that we have. |
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the total number of pizza slices that we have divided by the total number of sodas that we have. |
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the number of sodas we have to give up to get one extra pizza slice. |
QUESTION 1
Assume there are two basic goods produced in a nation, consumer goods and capital goods. The production possibilities graph for these two goods is bowed out from the origin. This reason for this shape of the graph is because of:
| A. | the other-things-equal assumption. | |
| B. | the law of increasing opportunity costs. | |
| C. | diminishing marginal utility. | |
| D. | present choices and future possibilities. |
1 points
QUESTION 2
From an economic perspective, when a student decides to attend another year of college, the student has concluded that the:
| A. | marginal costs of attending college are reduced by the availability of grants and subsidies. | |
| B. | marginal benefits of attending college have increased because the future is brighter. | |
| C. | marginal benefits of attending college are greater than the marginal costs. | |
| D. | marginal costs of attending college have decreased to make college affordable. |
1 points
QUESTION 3
A person observes that as consumer prices fall, economic growth increases. The person concludes that fall consumer prices leads to economic growth. This conclusion would be an example of:
| A. | confusing correlation with causation. | |
| B. | the fallacy of composition. | |
| C. | trade-offs among economic goals. | |
| D. | the other-things-equal assumption. |
1 points
QUESTION 4
The problem of unlimited wants and limited income is known as
| A. | the scientific method. | |
| B. | unequal wealth distribution. | |
| C. | normative economics. | |
| D. | the economizing problem. |
1 points
QUESTION 5
A point outside the production possibilities curve is:
| A. | unattainable without economic growth. | |
| B. | attainable and the economy is efficient. | |
| C. | unattainable without inflation. | |
| D. | attainable, but the economy is inefficient. |
1 points
QUESTION 6
Which one of the following would be an example of loaded terminology?
| A. | market forces | |
| B. | tentative hypothesis | |
| C. | entrepreneurial functions | |
| D. | creeping socialism |
1 points
QUESTION 7
Suppose there are two economies, Alpha and Beta, both of which have the same production possibilities curves. If Beta devotes more resources to produce investment goods than consumer goods as compared to Alpha, then in the future:
| A. | Alpha will not be able to achieve full employment. | |
| B. | Beta will not be able to achieve full employment. | |
| C. | Alpha will experience greater economic growth than Beta. | |
| D. | Beta will experience greater economic growth than Alpha. |
1 points
QUESTION 8
Macroeconomics, as opposed to microeconomics, is concerned with
| A. | individual businesses. | |
| B. | new computer technology. | |
| C. | the stock market. | |
| D. | the economy as a whole. |
1 points
QUESTION 9
Which one of the following is an example of a positive economic statement?
| A. | The size of the Federal government should be reduced. | |
| B. | Midwest states affected by drought should be given more federal disaster aid. | |
| C. | Education and income are highly correlated. | |
| D. | The minimum wage for workers should be raised to help low-income workers. |
1 points
QUESTION 10
Economics is primarily concerned with
| A. | interactions between the government and market participants. | |
| B. | how scarce resources are used. | |
| C. | the production and distribution of capital goods. | |
| D. | how income is divided among individuals. |
1 points
QUESTION 11
The production possibilities table below shows the hypothetical relationship between the production of guns (national defense) and butter (social goods) in an economy.
A B C D E
Guns 0 4 7 9 10
Butter 4 3 2 1 0
If the economy is producing at alternative C, what is the opportunity cost of producing another unit of butter?
| A. | 3 units of guns. | |
| B. | 1 units of guns. | |
| C. | 2 units of guns. | |
| D. | 4 units of guns. |
1 points
QUESTION 12
Assume that a consumer can buy only two goods X and Y, and has an income of $120. The price of X is $10 and the price of Y is $20. If the consumer spends all of her money on X and Y, which of the following would be a possible combination:
| A. | 4X and 2Y | |
| B. | 5X and 3Y | |
| C. | 6X and 3Y | |
| D. | 8X and 1Y |
1 points
QUESTION 13
In the production possibilities model of an economy, when there is full employment of resources
| a nation will be operating at an interior point within its production possibilities curve. | ||
| a nation will be operating on the production possibilities curve. | ||
| the production possibilities curve will shift outward to the right. | ||
| the production possibilies curve will shift inward to the left. |
1 points
QUESTION 14
In economics the concept that there is "no free lunch" means
| A. | scarce resources were used to produce these "free" goods so there is an opportunity cost to producing them. | |
| B. | consumers are irrational when they ask for a free lunch unless they can make the case that the free lunch benefits business. | |
| C. | the marginal cost of the "lunch" is greater than the marginal benefit. | |
| D. | businesses could not make a profit if they gave away free goods to consumers. |
1 points
QUESTION 15
Assume that a consumer can only purchase two goods with her income. A straight-line budget constraint indicates that the opportunity cost of obtaining an additional unit of one good is:
| A. | negative. | |
| B. | constant. | |
| C. | increasing. | |
| D. | decreasing. |
