Question 1

What assumptions do economists make when developing a production possibilities frontier (PPF)?

Accepted Answer

To simplify the complexity of the real w

Question 2

Draw a production possibilities frontier (PPF)for Good A and Good B.Suppose that these goods are subject to increasing relative costs in production,and be sure that your graph reflects this fact.
Now suppose that a new and innovative technology enhances the production of Good A but not Good B.Illustrate how this new innovation changes the production possibilities frontier (PPF).

Accepted Answer

The answer of Draw a production possibilities frontier (PPF)for Good...

Question 3

The ability of one producer to create more of a good than another producer using the same quantity of resources is called:

Accepted Answer

A) comparative advantage. 
B) absolute advantage. 
C) a positive-sum game. 
D) gains from trade. 
E) the law of increasing relative cost. 
A) comparative advantage. 
B) absolute advantage. 
C) a positive-sum game. 
D) gains from trade. 
E) the law of increasing relative cost.

Question 4

Michael and Angelo are both artists who can create sculptures or paint paintings each day.The following table describes their maximum outputs per day.Does either person have an absolute advantage?

Accepted Answer

A) Yes,Michael has an absolute advantage in both sculptures and paintings. 
B) Yes,Angelo has an absolute advantage in both sculptures and paintings. 
C) Yes,Michael has an absolute advantage in paintings,and Angelo has an absolute advantage in sculptures. 
D) Yes,Michael has an absolute advantage in sculptures,and Angelo has an absolute advantage in paintings. 
E) No,neither has an absolute advantage. 
A) Yes,Michael has an absolute advantage in both sculptures and paintings. 
B) Yes,Angelo has an absolute advantage in both sculptures and paintings. 
C) Yes,Michael has an absolute advantage in paintings,and Angelo has an absolute advantage in sculptures. 
D) Yes,Michael has an absolute advantage in sculptures,and Angelo has an absolute advantage in paintings. 
E) No,neither has an absolute advantage.

Question 5

Which of the following is necessary to build a good economic model?

Accepted Answer

A) normative statements 
B) assumptions 
C) opinions 
D) complex math 
E) realism 
A) normative statements 
B) assumptions 
C) opinions 
D) complex math 
E) realism

Question 6

Refer to the following figure for the questions that follow.
  
-Economic growth can be depicted on a production possibilities frontier (PPF)as an:

Accepted Answer

A) inward shift of the PPF. 
B) outward shift of the PPF. 
C) inward rotation along the x axis. 
D) inward rotation along the y axis. 
E) increase in opportunity cost. 
A) inward shift of the PPF. 
B) outward shift of the PPF. 
C) inward rotation along the x axis. 
D) inward rotation along the y axis. 
E) increase in opportunity cost.

Question 7

What does it mean when society is operating inside the production possibilities frontier (PPF)?

Accepted Answer

The society is not fully utilizing all o

Question 8

The process of using current resources to create new capital is:

Accepted Answer

A) absolute advantage. 
B) comparative advantage. 
C) specialization. 
D) investment. 
E) free. 
A) absolute advantage. 
B) comparative advantage. 
C) specialization. 
D) investment. 
E) free.

Question 9

Refer to the following figure for the questions that follow.
  
-According to the figure,a new technology that makes it easier to peel,core,and prepare apples will cause:

Accepted Answer

A) the entire production possibilities frontier (PPF)to shift outward. 
B) the entire PPF to shift inward. 
C) the PPF to rotate outward to a larger maximum quantity of apple pies with no change in maximum blueberry pies. 
D) the PPF to rotate outward to a larger maximum quantity of blueberry pies with no change in maximum apple pies. 
E) the PPF to stay exactly the same because there is no change in resources. 
A) the entire production possibilities frontier (PPF)to shift outward. 
B) the entire PPF to shift inward. 
C) the PPF to rotate outward to a larger maximum quantity of apple pies with no change in maximum blueberry pies. 
D) the PPF to rotate outward to a larger maximum quantity of blueberry pies with no change in maximum apple pies. 
E) the PPF to stay exactly the same because there is no change in resources.

Question 10

Consider the production possibilities frontier (PPF)shown in the figure below to answer the questions that follow.
  
-Given current resources and technology,the attainable range is best described as:

Accepted Answer

A) only area O: points outside the PPF. 
B) points on the PPF only. 
C) only area I: points inside the PPF. 
D) area I: points inside the PPF and points on the PPF. 
E) Area O: points outside the PPF and points on the PPF. 
A) only area O: points outside the PPF. 
B) points on the PPF only. 
C) only area I: points inside the PPF. 
D) area I: points inside the PPF and points on the PPF. 
E) Area O: points outside the PPF and points on the PPF.

Question 11

Use these production possibilities frontier (PPF)curves,which compare the ancient production of agricultural products to art and literature,to answer the questions that follow.

-Suppose the printing press is invented.Which graph best depicts how this would affect the PPF?

Accepted Answer

A) Graph A 
B) Graph B 
C) Graph C 
D) Graph D 
E) Graph E 
A) Graph A 
B) Graph B 
C) Graph C 
D) Graph D 
E) Graph E

Question 12

Refer to the following figures to answer the questions that follow.
  
-Which allocation point in the short-run production possibilities frontier (PPF)will lead to the most significant growth in the long-run PPF?

Accepted Answer

A) point A 
B) point B 
C) point C 
D) point D 
E) point E 
A) point A 
B) point B 
C) point C 
D) point D 
E) point E

Question 13

You can make four trips to the garden center with your pickup truck and haul it yourself.It will cost you $75 per load for the mulch,plus $25 in fuel and truck wear per load.You estimate it will take about five hours to haul and unload all four loads.
What is the full cost of each method? Which method is cheaper? How is opportunity cost relevant?

Accepted Answer

Hauling the mulch yourself would cost $1

Question 14

Consider the production possibilities frontier (PPF)shown in the figure below to answer the questions that follow.
  
-The set of efficient points is best described as:

Accepted Answer

A) only area O: points outside the PPF. 
B) points on the PPF only. 
C) only area I: points inside the PPF. 
D) area I: inside the PPF and points on the PPF. 
E) area O: outside the PPF and points on the PPF. 
A) only area O: points outside the PPF. 
B) points on the PPF only. 
C) only area I: points inside the PPF. 
D) area I: inside the PPF and points on the PPF. 
E) area O: outside the PPF and points on the PPF.

Question 15

Which of the following is a normative statement?

Accepted Answer

A) The sky is blue. 
B) The sky is green with pink polka dots. 
C) Points on the production possibilities frontier (PPF)are efficient. 
D) Points outside the PPF are unattainable with current resources. 
E) We should strive to push the PPF outward. 
A) The sky is blue. 
B) The sky is green with pink polka dots. 
C) Points on the production possibilities frontier (PPF)are efficient. 
D) Points outside the PPF are unattainable with current resources. 
E) We should strive to push the PPF outward.

Question 16

Refer to the following figure for the questions that follow.
  
-The opportunity cost of increasing production of apple pies from 14 to 16 pies is:

Accepted Answer

A) 2 blueberry pies. 
B) 14 apple pies. 
C) 7 blueberry pies. 
D) 4 blueberry pies. 
E) 16 blueberry pies. 
A) 2 blueberry pies. 
B) 14 apple pies. 
C) 7 blueberry pies. 
D) 4 blueberry pies. 
E) 16 blueberry pies.

Question 17

Michael and Angelo are both artists who can create sculptures or paintings each day.The following table describes their maximum outputs per day.Use this table to answer the questions that follow.
  
-What is Angelo's opportunity cost of a sculpture?

Accepted Answer

A) 1/2 painting 
B) 1/3 painting 
C) 3 paintings 
D) 1/3 sculpture 
E) 6/10 sculpture 
A) 1/2 painting 
B) 1/3 painting 
C) 3 paintings 
D) 1/3 sculpture 
E) 6/10 sculpture

Question 18

Is it always better to forgo current consumption in order to invest more in capital goods that will provide more growth in society's production possibilities frontier (PPF)and make us better off in the future?

Accepted Answer

No,it is not always better to forgo curr

Question 19

The figures below depict the production possibilities frontiers (PPFs)for two people who can allocate the same amount of time between building wooden boats and solving crimes.Refer to these figures to answer the questions that follow.
  
-What is Gibbs's opportunity cost of solving a crime?

Accepted Answer

A) 20 solved crimes 
B) 30 solved crimes 
C) 5 solved crimes 
D) 1/20 of a boat 
E) 1/10 of a boat 
A) 20 solved crimes 
B) 30 solved crimes 
C) 5 solved crimes 
D) 1/20 of a boat 
E) 1/10 of a boat

Question 20

The area inside (within)the production possibilities frontier (PPF)contains:

Accepted Answer

A) normative points. 
B) positive points. 
C) efficient points. 
D) inefficient points. 
E) high opportunity cost points. 
A) normative points. 
B) positive points. 
C) efficient points. 
D) inefficient points. 
E) high opportunity cost points.

What assumptions do economists make when developing a production possibilities frontier (PPF)?

The ability of one producer to create more of a good than another producer using the same quantity of resources is called:

Michael and Angelo are both artists who can create sculptures or paint paintings each day.The following table describes their maximum outputs per day.Does either person have an absolute advantage?

Which of the following is necessary to build a good economic model?

Refer to the following figure for the questions that follow. -Economic growth can be depicted on a production possibilities frontier (PPF)as an:

What does it mean when society is operating inside the production possibilities frontier (PPF)?

The process of using current resources to create new capital is:

Refer to the following figure for the questions that follow. -According to the figure,a new technology that makes it easier to peel,core,and prepare apples will cause:

Consider the production possibilities frontier (PPF)shown in the figure below to answer the questions that follow. -Given current resources and technology,the attainable range is best described as:

Use these production possibilities frontier (PPF)curves,which compare the ancient production of agricultural products to art and literature,to answer the questions that follow. -Suppose the printing press is invented.Which graph best depicts how this would affect the PPF?

Refer to the following figures to answer the questions that follow. -Which allocation point in the short-run production possibilities frontier (PPF)will lead to the most significant growth in the long-run PPF?

Consider the production possibilities frontier (PPF)shown in the figure below to answer the questions that follow. -The set of efficient points is best described as:

Which of the following is a normative statement?

Refer to the following figure for the questions that follow. -The opportunity cost of increasing production of apple pies from 14 to 16 pies is:

Michael and Angelo are both artists who can create sculptures or paintings each day.The following table describes their maximum outputs per day.Use this table to answer the questions that follow. -What is Angelo's opportunity cost of a sculpture?

Is it always better to forgo current consumption in order to invest more in capital goods that will provide more growth in society's production possibilities frontier (PPF)and make us better off in the future?

The figures below depict the production possibilities frontiers (PPFs)for two people who can allocate the same amount of time between building wooden boats and solving crimes.Refer to these figures to answer the questions that follow. -What is Gibbs's opportunity cost of solving a crime?

The area inside (within)the production possibilities frontier (PPF)contains:

The Five Foundations of Economics

The Market at Work: Supply and Demand

Elasticity

Price Controls

The Efficiency of Markets and the Costs of Taxation

Market Inefficiencies: Externalities and Public Goods

Business Costs and Production

Firms in a Competitive Market

Understanding Monopoly

Price Discrimination

Monopolistic Competition and Advertising

Oligopoly and Strategic Behavior

The Demand and Supply of Resources

Income,inequality,and Poverty

Consumer Choice

Behavioral Economics and Risk Taking

Health Insurance and Health Care

Filters

Exam 2: Model Building and Gains From Trade

What assumptions do economists make when developing a production possibilities frontier (PPF)?

The ability of one producer to create more of a good than another producer using the same quantity of resources is called:

Michael and Angelo are both artists who can create sculptures or paint paintings each day.The following table describes their maximum outputs per day.Does either person have an absolute advantage?

Which of the following is necessary to build a good economic model?

Refer to the following figure for the questions that follow. -Economic growth can be depicted on a production possibilities frontier (PPF)as an:

What does it mean when society is operating inside the production possibilities frontier (PPF)?

The process of using current resources to create new capital is:

Refer to the following figure for the questions that follow. -According to the figure,a new technology that makes it easier to peel,core,and prepare apples will cause:

Consider the production possibilities frontier (PPF)shown in the figure below to answer the questions that follow. -Given current resources and technology,the attainable range is best described as:

Use these production possibilities frontier (PPF)curves,which compare the ancient production of agricultural products to art and literature,to answer the questions that follow. -Suppose the printing press is invented.Which graph best depicts how this would affect the PPF?

Refer to the following figures to answer the questions that follow. -Which allocation point in the short-run production possibilities frontier (PPF)will lead to the most significant growth in the long-run PPF?

Consider the production possibilities frontier (PPF)shown in the figure below to answer the questions that follow. -The set of efficient points is best described as:

Which of the following is a normative statement?

Refer to the following figure for the questions that follow. -The opportunity cost of increasing production of apple pies from 14 to 16 pies is:

Michael and Angelo are both artists who can create sculptures or paintings each day.The following table describes their maximum outputs per day.Use this table to answer the questions that follow. -What is Angelo's opportunity cost of a sculpture?

Is it always better to forgo current consumption in order to invest more in capital goods that will provide more growth in society's production possibilities frontier (PPF)and make us better off in the future?

The figures below depict the production possibilities frontiers (PPFs)for two people who can allocate the same amount of time between building wooden boats and solving crimes.Refer to these figures to answer the questions that follow. -What is Gibbs's opportunity cost of solving a crime?

The area inside (within)the production possibilities frontier (PPF)contains:

The Five Foundations of Economics

The Market at Work: Supply and Demand

Elasticity

Price Controls

The Efficiency of Markets and the Costs of Taxation

Market Inefficiencies: Externalities and Public Goods

Business Costs and Production

Firms in a Competitive Market

Understanding Monopoly

Price Discrimination

Monopolistic Competition and Advertising

Oligopoly and Strategic Behavior

The Demand and Supply of Resources

Income,inequality,and Poverty

Consumer Choice

Behavioral Economics and Risk Taking

Health Insurance and Health Care

Filters