Exam 1: Economic Issues and Concepts

Many economies in central and Eastern Europe,including the countries of the former Soviet Union,are still in the process of moving from a command economy to a market economy.In the first years of this transition,most of these countries experienced sharp drops in output and reductions in living standards.Economists generally see this as

Figure 1-7 shows the production possibilities boundary for an economy that produces two goods-cotton and bananas. FIGURE 1-7 Refer to Figure 1-7.A production possibilities boundary is shown for an economy that produces two goods-cotton and bananas,both measured in tonnes produced per year.Which of the following statements best describes the difference in opportunity costs that this economy faces at point A compared to point E?

Figure 1-7 shows the production possibilities boundary for an economy that produces two goods-cotton and bananas. FIGURE 1-7 Refer to Figure 1-7.A production possibilities boundary is shown for an economy that produces two goods-cotton and bananas,both measured in tonnes produced per year.Suppose the economy is currently producing at point A.What is the opportunity cost to this economy of increasing production of bananas by 100 tonnes?

The diagram below shows two production possibilities boundaries for Country X. FIGURE 1-4 Refer to Figure 1-4.If Country X,constrained by the production possibilities boundary PPB₁,is producing the combination of goods indicated at point F,it can produce more consumer goods by moving to one of the points

Which of the following is NOT considered a "factor of production" in economics?

Consider Canada's production possibilities boundary.Suppose fire destroys many millions of hectares of valuable Canadian forest.The effect on the Canadian economy would be best illustrated by ________ the production possibilities boundary.

With a budget of $500 000,a school board can choose to purchase 20 000 textbooks or 2000 laptop computers (or some intermediate combination)for use in classrooms. FIGURE 1-2 Refer to Figure 1-2.Suppose the school board chooses to allocate all $500 000 to the purchase of laptop computers.What is the opportunity cost of this entire purchase?

Suppose you own a courier service and you use two types of delivery vehicles - Model A,which costs to purchase,and Model B,which costs $50 000 to purchase.You have a budget of for the purchase of new vehicles.What is the opportunity cost of one Model A vehicle?

The diagram below shows two production possibilities boundaries for Country X. FIGURE 1-4 Refer to Figure 1-4.Suppose Country X is currently producing at point E.Country X could achieve production at point D if

With a budget of $200 million,the government can choose to purchase 4 helicopters or repair 200 km of highway. FIGURE 1-1 Refer to Figure 1-1.For the government,the opportunity cost of one search and rescue helicopter is

The diagram below shows two production possibilities boundaries for Country X. FIGURE 1-4 Refer to Figure 1-4.If Country X is currently producing at point A,it could move to point B if

If some income earned by households is not spent on output,or if some income earned by firms is not spent on factor services,the circular flow of income will

A farmer selling tomatoes and corn at a roadside,and a currency trader in Hong Kong are each participating in

The world price of oil fell in 2014-2015 from over $100 per barrel to less than $50.As a producer of oil,what effect did this change have on Canada's production possibilities boundary?

On a diagram of a production possibilities boundary,the concept of opportunity cost is illustrated by the

Consider Canada's production possibilities boundary.Suppose a scientific breakthrough leads to a lower-cost method of producing battery-operated cars in Canada.The likely effect would be to move Canada's current production

In practice,the term "centrally planned economy" refers to an economy in which

Consider Canada's production possibilities boundary.During the nineteenth and early twentieth centuries,millions of people immigrated to western Canada.The effect on the Canadian economy was to

Karl Marx argued that

Complex economic plans for many economic sectors are most associated with a