Exam 3: The Economic Problem

The figure above shows a production possibilities frontier. In the figure, which of the following combinations of the two goods are efficient?

When drawing a production possibilities frontier, which of the following is held constant?

Possibility Bread (number) Books (number) A 0 1,000 B 100 900 C 200 700 D 300 400 E 400 0 - The table above shows the production possibilities for an economy. The opportunity cost of a loaf of bread is _{--------------------}when moving from possibility B to possibility C.

Hank requires 1 hour to cut the grass and 3 hours to clean the house. His sister Holly requires 1 hour to cut the grass and 4 hours to clean the house. Which of the following statements is true?

The production possibilities frontier is the

- The above figure shows the production possibility frontier for a country. Suppose the country is producing at point A. What would be the opportunity cost to increase the production of rice to 12 tons?

Moving from one point to another on a production possibilities frontier implies

A bowed out PPF reflects which of the following ideas? i. increasing opportunity cost ii. resources are not equally productive in all activities iii. prices of goods increase over time

Possibility Airplanes (number) Cruise ships (number) A 100 0 B 80 20 C 50 40 D 0 60 - The table above gives four production possibilities for airplanes and cruise ships. In possibility A, how many resources are devoted to the production of cruise ships?

$\quad\quad\quad\quad\quad\quad\text { Anaconda }$$\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { Bear }$ Production Corn Shoes Production Corn Shoes point (tons) (number) point (tons) (number) 0 and 700 0 and 1000 1 and 650 1 and 900 2 and 550 2 and 700 3 and 350 3 and 400 4 and 0 4 and 0 - The table above gives the production possibilities frontier for two countries, Anaconda and Bear. The table shows that

In a production possibilities frontier graph, the cost of producing more units of a good is measured by the

In the production possibilities model, the vertical axis measures _{--------------------}and the horizontal axis measures_{--------------------}.

Consider the United States' production of soy beans and running shoes. If the United States has an absolute advantage in the production of both goods compared to China,

The opportunity cost of a good increases as more of it is produced because

- The figure above shows the production possibilities frontier for a country. In order for it to produce at point E, the

Why does a nation experience increasing opportunity cost?

$\text { Jack's production possibilities }$$\quad\quad\quad\quad\quad\quad\quad\quad\text { Jill's production possibilities }$ Production Food Clothing Production Food Clothing point (pounds) (pounds) point (pounds) (pounds) A 24 and 0 A 45 and 0 B 16 and 4 B 30 and 5 C 8 and 8 C 15 and 10 D 0 and 12 D 0 and 15 - In the table above, Jill's opportunity cost for 1 pound of food is_{--------------------} and her opportunity cost for 1 pound of clothing is_{--------------------}.

As an economy produces more of one of the goods on a bowed out production possibilities frontier, What happens to the opportunity cost of producing the good?

What is gained when people engage in specialization and trade?

Relative to Al, Joe has_{-------------}if Joe can produce a good at a lower opportunity cost than Al.