Exam 2: Confronting Scarcity: Choices in Production

Use the following to answer questions -(Exhibit: Bicycles and Radishes 1)The exhibit shows production possibilities curves for two countries that produce only radishes and bicycles.The axes of both graphs are measured in equivalent units.Country A is now operating at point M, and Country B is now operating at point N.Suppose Country A discovered a new technology that greatly increased its ability to produce bicycles.This would:

Use the following to answer questions : -(Exhibit: Guns and Butter)This production possibilities curve is:

The law of increasing opportunity cost means that:

When a nation experiences economic growth:

The law of increasing opportunity cost says that:

Any factor of production is capital if it:

In a market capitalist economy:

The slope of a production possibilities curve is based on opportunity cost.

The slope of a production possibilities curve is based on opportunity cost.

The law of increasing opportunity cost results in a constant slope of the production possibilities curve.

There is no role for government in a market capitalist economy.

Society's production possibilities curve is primarily concerned with answering the economic question of what goods and services a society can produce.

During the Great Depression:

Use the following to answer questions -(Exhibit: Bicycles and Radishes 2)In the country depicted in this exhibit, the opportunity cost of an additional ton of radishes would be greater at:

If Farmer Sam MacDonald can produce 200 pounds of cabbages and 0 pounds of potatoes or 0 pounds of cabbages and 100 pounds of potatoes and faces a linear production possibilities curve for his farm, the opportunity cost of producing an additional pound of potatoes is _____ _ pound(s)of cabbage.

Use the following to answer questions -(Exhibit: Production Possibilities Curve-Military and Civilian Goods)A movement from point G to H on Curve 1 would:

Use the following to answer questions -(Exhibit: Strawberries and Submarines)Suppose the economy is now operating at point A.The first submarine, which is achieved at point B, would have an opportunity cost of _______ million tons of strawberries.

If an economy is producing a level of output that is on its production possibilities curve, the economy

Countries import some goods and export other goods primarily because of:

Use the following to answer questions -(Exhibit: Sugar and Freight Trains)Suppose the economy is operating at point A, producing 244 tons of sugar and 1 freight train.The opportunity cost of producing the second freight train is: