Question 1

The opportunity cost of every investment in capital goods is

Accepted Answer

A)  current consumption consumer goods). 
B)  future consumption capital goods today). 
C)  absolute advantage. 
D)  comparative advantage. 
E)  scarcity. 
A)  current consumption consumer goods). 
B)  future consumption capital goods today). 
C)  absolute advantage. 
D)  comparative advantage. 
E)  scarcity.

Question 2

Refer to the following figure to answer the next  questions.
  
-This society could reach point F when there is an)

Accepted Answer

A)  increase in the monetary price of white rice. 
B)  credible new study that shows eating pasta reduces the risk of heart attacks. 
C)  new technology that makes the storage and transport of both rice and pasta more efficient. 
D)  new tax on the sale of both rice and pasta. 
E)  increase in the monetary price of macaroni. 
A)  increase in the monetary price of white rice. 
B)  credible new study that shows eating pasta reduces the risk of heart attacks. 
C)  new technology that makes the storage and transport of both rice and pasta more efficient. 
D)  new tax on the sale of both rice and pasta. 
E)  increase in the monetary price of macaroni.

Question 3

When testing a paper airplane on a campus quad, which of the following would be an exogenous factor?

Accepted Answer

A)  the weight of the paper used in making the plane 
B)  the ratio of wingspan to plane length 
C)  the height of the body of the plane 
D)  the level of wind encountered 
E)  the number of folds in the wings 
A)  the weight of the paper used in making the plane 
B)  the ratio of wingspan to plane length 
C)  the height of the body of the plane 
D)  the level of wind encountered 
E)  the number of folds in the wings

Question 4

Mikhail and Stefan 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 next  questions  
-Based on the table, does Mikhail or Stefan have a comparative advantage?

Accepted Answer

A)  Yes, Mikhail has a comparative advantage in both sculptures and paintings. 
B)  Yes, Stefan has a comparative advantage in both sculptures and paintings. 
C)  Yes, Mikhail has a comparative advantage in paintings, and Stefan has a comparative advantage in sculptures. 
D)  Yes, Mikhail has a comparative advantage in sculptures, and Stefan has a comparative advantage in paintings. 
E)  No, neither has a comparative advantage. 
A)  Yes, Mikhail has a comparative advantage in both sculptures and paintings. 
B)  Yes, Stefan has a comparative advantage in both sculptures and paintings. 
C)  Yes, Mikhail has a comparative advantage in paintings, and Stefan has a comparative advantage in sculptures. 
D)  Yes, Mikhail has a comparative advantage in sculptures, and Stefan has a comparative advantage in paintings. 
E)  No, neither has a comparative advantage.

Question 5

Mrs. Abel has a comparative advantage in producing cabbage if, in comparison to Mr. Lace, Mrs. Abel can grow cabbage

Accepted Answer

A)  with less labor. 
B)  with fewer inputs. 
C)  at a lower equilibrium. 
D)  at a lower opportunity cost. 
E)  with less technology. 
A)  with less labor. 
B)  with fewer inputs. 
C)  at a lower equilibrium. 
D)  at a lower opportunity cost. 
E)  with less technology.

Question 6

Refer to the following figure to answer the next  questions.
  
-Which of the following represents a point that is unattainable with current resources and technology?

Accepted Answer

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

Question 7

Suppose someone finds a production possibilities frontier PPF) that is shaped like a straight line. What can one determine about the production of the two goods?

Accepted Answer

A)  Production of the two goods is subject to decreasing relative cost. 
B)  Production of the two goods is subject to increasing relative cost. 
C)  Production of the two goods is subject to constant opportunity cost anywhere along the PPF. 
D)  One producer must have an absolute advantage in production. 
E)  More resources will not cause the PPF to shift. 
A)  Production of the two goods is subject to decreasing relative cost. 
B)  Production of the two goods is subject to increasing relative cost. 
C)  Production of the two goods is subject to constant opportunity cost anywhere along the PPF. 
D)  One producer must have an absolute advantage in production. 
E)  More resources will not cause the PPF to shift.

Question 8

Suppose that Leslie and Hussein can either make salads or grill steaks. Their maximum outputs per hour are listed in the following table. Given the same quantity of resources, at what terms of trade relative price ratio) could they specialize and trade so that both consume outside their own production possibilities frontiers PPFs)? $$\begin{array} { l l l l l } 
\hline & \begin{array} { l } 
\text { Maximum } \
\text { Number of Salads }
\end{array} & \begin{array} { l } 
\text { Opportunity } \
\text { Cost of 1 Salad }
\end{array} & \begin{array} { l } 
\text { Maximum } \
\text { Number of Steaks }
\end{array} & \begin{array} { l } 
\text { Opportunity Cost } \
\text { of 1 Steak }
\end{array} \
\hline \text { Leslie } & 9 & 1 / 3 \text { steak } & 3 & 3 \text { salads } \
\text { Hussein } & 12 & 1 / 2 \text { steak } & 6 & 2 \text { salads } \
\hline
\end{array}$$

Accepted Answer

A)  1 salad per 1 steak 
B)  2 salads per 1 steak 
C)  2.5 salads per 1 steak 
D)  3 salads per 1 steak 
E)  3.5 salads per 1 steak 
A)  1 salad per 1 steak 
B)  2 salads per 1 steak 
C)  2.5 salads per 1 steak 
D)  3 salads per 1 steak 
E)  3.5 salads per 1 steak

Question 9

On a production possibilities frontier PPF) that shows the trade-off between consumer goods and capital goods given a fixed amount of labor, unemployment is illustrated by

Accepted Answer

A)  movement from a point within the frontier to a point on the frontier. 
B)  a point outside the frontier. 
C)  a point within the frontier. 
D)  movement from a point on the frontier to another point on the frontier. 
E)  a point on the frontier. 
A)  movement from a point within the frontier to a point on the frontier. 
B)  a point outside the frontier. 
C)  a point within the frontier. 
D)  movement from a point on the frontier to another point on the frontier. 
E)  a point on the frontier.

Question 10

Draw a production possibilities frontier PPF) that shows a pizza shop's production trade-offs
between producing pizzas and stromboli. Suppose the pizza shop upgrades to a larger, more automated oven. On the same graph, show how the PPF changes. The oven is used to bake both pizzas and stromboli.)

Accepted Answer

The answer of Draw a production possibilities frontier PPF) that...

Question 11

Which of the following is a positive statement?

Accepted Answer

A)  Nelly's dog should lose some weight. 
B)  Legally requiring dogs to have rabies shots will reduce the number of rabid dogs. 
C)  Nelly should take her dog to the veterinarian once a year for a checkup. 
D)  Chihuahuas are cuter than bulldogs. 
E)  All dogs should be required to wear leashes at all times. 
A)  Nelly's dog should lose some weight. 
B)  Legally requiring dogs to have rabies shots will reduce the number of rabid dogs. 
C)  Nelly should take her dog to the veterinarian once a year for a checkup. 
D)  Chihuahuas are cuter than bulldogs. 
E)  All dogs should be required to wear leashes at all times.

Question 12

A society that is producing its maximum combination of goods and using all available resources for production

Accepted Answer

A)  has minimized its opportunity cost. 
B)  has maximized its opportunity cost. 
C)  is operating on its production possibilities frontier PPF). 
D)  is operating outside its PPF. 
E)  has eliminated scarcity. 
A)  has minimized its opportunity cost. 
B)  has maximized its opportunity cost. 
C)  is operating on its production possibilities frontier PPF). 
D)  is operating outside its PPF. 
E)  has eliminated scarcity.

Question 13

Explain why, ultimately, the opportunity cost of producing consumer goods instead of capital goods must be defined in terms of consumer goods.

Accepted Answer

Initially, the opportunity cost of produ

The opportunity cost of every investment in capital goods is

Refer to the following figure to answer the next questions. -This society could reach point F when there is an)

When testing a paper airplane on a campus quad, which of the following would be an exogenous factor?

Mikhail and Stefan 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 next questions -Based on the table, does Mikhail or Stefan have a comparative advantage?

Mrs. Abel has a comparative advantage in producing cabbage if, in comparison to Mr. Lace, Mrs. Abel can grow cabbage

Refer to the following figure to answer the next questions. -Which of the following represents a point that is unattainable with current resources and technology?

Suppose someone finds a production possibilities frontier PPF) that is shaped like a straight line. What can one determine about the production of the two goods?

On a production possibilities frontier PPF) that shows the trade-off between consumer goods and capital goods given a fixed amount of labor, unemployment is illustrated by

Draw a production possibilities frontier PPF) that shows a pizza shop's production trade-offs between producing pizzas and stromboli. Suppose the pizza shop upgrades to a larger, more automated oven. On the same graph, show how the PPF changes. The oven is used to bake both pizzas and stromboli.)

Which of the following is a positive statement?

A society that is producing its maximum combination of goods and using all available resources for production

Explain why, ultimately, the opportunity cost of producing consumer goods instead of capital goods must be defined in terms of consumer goods.

Five Foundations of Economics

The Market at Work: Supply and Demand

Market Outcomes and Tax Incidence

Price Controls

Introduction to Macroeconomics and Gross Domestic Product

Unemployment

The Price Level and Inflation

Savings, Interest Rates, and the Market for Loanable Funds

Financial Markets and Securities

Economic Growth and the Wealth of Nations

Growth Theory

The Aggregate Demandaggregate Supply Model

The Great Recession, the Great Depression, and Great Macroeconomic Debates

Federal Budgets: the Tools of Fiscal Policy

Fiscal Policy

Money and the Federal Reserve

Monetary Policy Learning Objectives

International Trade

International Finance

Filters

Exam 2: Model Building and Gains From Trade

The opportunity cost of every investment in capital goods is

Refer to the following figure to answer the next questions. -This society could reach point F when there is an)

When testing a paper airplane on a campus quad, which of the following would be an exogenous factor?

Mikhail and Stefan 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 next questions -Based on the table, does Mikhail or Stefan have a comparative advantage?

Mrs. Abel has a comparative advantage in producing cabbage if, in comparison to Mr. Lace, Mrs. Abel can grow cabbage

Refer to the following figure to answer the next questions. -Which of the following represents a point that is unattainable with current resources and technology?

Suppose someone finds a production possibilities frontier PPF) that is shaped like a straight line. What can one determine about the production of the two goods?

On a production possibilities frontier PPF) that shows the trade-off between consumer goods and capital goods given a fixed amount of labor, unemployment is illustrated by

Draw a production possibilities frontier PPF) that shows a pizza shop's production trade-offs between producing pizzas and stromboli. Suppose the pizza shop upgrades to a larger, more automated oven. On the same graph, show how the PPF changes. The oven is used to bake both pizzas and stromboli.)

Which of the following is a positive statement?

A society that is producing its maximum combination of goods and using all available resources for production

Explain why, ultimately, the opportunity cost of producing consumer goods instead of capital goods must be defined in terms of consumer goods.

Five Foundations of Economics

The Market at Work: Supply and Demand

Market Outcomes and Tax Incidence

Price Controls

Introduction to Macroeconomics and Gross Domestic Product

Unemployment

The Price Level and Inflation

Savings, Interest Rates, and the Market for Loanable Funds

Financial Markets and Securities

Economic Growth and the Wealth of Nations

Growth Theory

The Aggregate Demandaggregate Supply Model

The Great Recession, the Great Depression, and Great Macroeconomic Debates

Federal Budgets: the Tools of Fiscal Policy

Fiscal Policy

Money and the Federal Reserve

Monetary Policy Learning Objectives

International Trade

International Finance

Filters