Exam 2: The Economic Problem

-The figure above shows the production possibilities frontiers for four nations that have identical production possibilities frontiers in the present. The one that will grow most rapidly in the future is most likely to be producing at point

Consider a production possibilities frontier with corn on the vertical axis and cars on the horizontal. Unusually good weather for growing corn shifts

When we cannot produce more of any good without giving up some other good that we value more highly, we have achieved

-The above table shows production combinations on a country's production possibilities frontier. Which of the following is an example of a production point that is inefficient?

Employees at Bank of America are good at providing banking services and workers at Ben & Jerry's are good at making ice cream. If some bankers are moved to making ice cream, we get a small increase in the amount of ice cream produced and a large decrease in the amount of banking services provided. If the PPF has banking services on the vertical axis and ice cream on the horizontal axis, the effect of the change reflects

Resource use is allocatively efficient if the

-In the figure above, suppose that Mac and Izzie trade and reach point c. Then

Technological progress makes the production possibilities frontier

Which of the following is NOT illustrated by a production possibilities frontier?

-In the above table, the opportunity cost of the 2nd pizza is

-The above table shows the number of pencils or pens that could be produced by Don and Bob in an hour. This schedule shows that

The production possibilities frontier is the boundary between

-Jake takes 40 minutes to fry a chicken and 10 minutes to toast a slice of bread. His brother Elwood takes 60 minutes to fry a chicken and 4 minutes to toast a slice of bread. Calculate each brother's opportunity cost. Who has a comparative advantage in which activity? Explain. Will the brothers gain if they specialize?

Harry produces 2 balloon rides and 4 boat rides an hour. Harry could produce more balloon rides but to do so he must produce fewer boat rides. Harry is ________ his production possibilities frontier.

As long as the marginal benefit from a good is greater than its marginal cost, an economy is operating efficiently.

How do property rights help organize production and trade?

In one week Alice can produce 5 pairs of shoes or 4 bookshelves while Roger can produce 10 pairs of shoes or 6 bookshelves. Alice should specialize in the production of

The slope of a production possibilities frontier that displays increasing opportunity cost is

-In the figure above, moving from production at point d to production at point a requires

Marginal benefit curves slope