Question 1

Exhibit 2-9   Refer to Exhibit 2-9. For Adam, the opportunity cost of producing one unit of good A is ____________ unit(s)of good B.

Accepted Answer

A) 3.00 
B) 0.33 
C) 0.75 
D) 1.33 
A) 3.00 
B) 0.33 
C) 0.75 
D) 1.33 D

Question 2

Exhibit 2-8   Refer to Exhibit 2-8. For Maria, the opportunity cost of producing one unit of good Y is ___________ unit(s)of good X.

Accepted Answer

A) 2.00 
B) 1.00 
C) 10.00 
D) 0.50 
A) 2.00 
B) 1.00 
C) 10.00 
D) 0.50 B

Question 3

Exhibit 2-5  
Refer to Exhibit 2-5. Which of the following labeled points are productive efficient?

Accepted Answer

A) A, B, C, D, and E 
B) B, C and D only 
C) C only 
D) All of the points are productive efficient. 
E) None of the points are productive efficient. 
A) A, B, C, D, and E 
B) B, C and D only 
C) C only 
D) All of the points are productive efficient. 
E) None of the points are productive efficient. A

Question 4

An increase in the quantity of resources available

Accepted Answer

A) shifts the PPF leftward. 
B) shifts the PPF rightward. 
C) moves the economy to a new point up along a given PPF. 
D) moves the economy to a new point down along a given PPF. 
A) shifts the PPF leftward. 
B) shifts the PPF rightward. 
C) moves the economy to a new point up along a given PPF. 
D) moves the economy to a new point down along a given PPF.

Question 5

Consider two points on the PPF: point A, at which there are 50 apples and 40 pears, and point B, at which there are 46 apples and 41 pears. If the economy is currently at point A, the opportunity cost of moving to point B is

Accepted Answer

A) 1 pear. 
B) 4 apples. 
C) 3 apples. 
D) 41 pears. 
A) 1 pear. 
B) 4 apples. 
C) 3 apples. 
D) 41 pears.

Question 6

Productive efficiency implies that

Accepted Answer

A) all consumers' wants are satisfied. 
B) no advance in technology will occur in the future. 
C) the attainable region is greater than the unattainable region. 
D) gains are impossible in one area without losses in another. 
A) all consumers' wants are satisfied. 
B) no advance in technology will occur in the future. 
C) the attainable region is greater than the unattainable region. 
D) gains are impossible in one area without losses in another.

Question 7

If there is always a 4-for-1 tradeoff between producing good X and good Y, it follows that the opportunity cost of X (in terms of Y)____________________ and the PPF for these two goods is ______________________.

Accepted Answer

A) decreases at low levels of X; a straight line 
B) rises at high levels of Y; bowed-outward 
C) decreases at high levels of X; bowed-outward 
D) is always the same; a straight line 
A) decreases at low levels of X; a straight line 
B) rises at high levels of Y; bowed-outward 
C) decreases at high levels of X; bowed-outward 
D) is always the same; a straight line

Question 8

An economy is productive efficient if it produces

Accepted Answer

A) more than enough food to feed everyone. 
B) more goods and services in each successive year. 
C) maximum output with given resources and technology. 
D) enough output so that no one lives in poverty. 
A) more than enough food to feed everyone. 
B) more goods and services in each successive year. 
C) maximum output with given resources and technology. 
D) enough output so that no one lives in poverty.

Question 9

Within the production possibilities frontier (PPF)framework, choice is depicted by the

Accepted Answer

A) PPF itself. 
B) PPF being bowed outward. 
C) need to select among the points making up the PPF. 
D) straight-line PPF. 
A) PPF itself. 
B) PPF being bowed outward. 
C) need to select among the points making up the PPF. 
D) straight-line PPF.

Question 10

With a constant opportunity cost between goods A and B, the PPF for goods A and B would

Accepted Answer

A) be a straight line. 
B) be a bowed-outward line. 
C) be a bowed-inward line. 
D) not exist. 
A) be a straight line. 
B) be a bowed-outward line. 
C) be a bowed-inward line. 
D) not exist.

Question 11

In the production possibilities framework, economic growth is depicted by the PPF

Accepted Answer

A) shifting leftward (toward the origin). 
B) shifting rightward (away from the origin). 
C) becoming a straight line rather than a bowed outward curve. 
D) becoming bowed outward rather than a straight line. 
A) shifting leftward (toward the origin). 
B) shifting rightward (away from the origin). 
C) becoming a straight line rather than a bowed outward curve. 
D) becoming bowed outward rather than a straight line.

Question 12

A production possibilities frontier separates an attainable region from an unattainable region.

Accepted Answer

A) True 
 B)False

Question 13

Economic growth causes the PPF to

Accepted Answer

A) shift leftward. 
B) shift rightward. 
C) remain constant. 
D) go from a straight line to a curve. 
A) shift leftward. 
B) shift rightward. 
C) remain constant. 
D) go from a straight line to a curve.

Question 14

Exhibit 2-2  
Refer to Exhibit 2-2.  The production possibilities frontiers shown in this exhibit depict _______________ opportunity costs.

Accepted Answer

A) constant 
B) increasing 
C) decreasing 
D) There is not enough information provided to answer this question. 
A) constant 
B) increasing 
C) decreasing 
D) There is not enough information provided to answer this question.

Question 15

Suppose Andrea is taking just two courses and is at a point inside (or below)her PPF of grades for those two courses.  If Andrea becomes more efficient in her study habits then it is impossible for ____________________,  ceteris paribus.

Accepted Answer

A) either one of her grades to rise 
B) both of her grades to rise 
C) one grade to rise and the other grade to fall 
D) both of her grades to fall 
A) either one of her grades to rise 
B) both of her grades to rise 
C) one grade to rise and the other grade to fall 
D) both of her grades to fall

Question 16

Exhibit 2-7  
Refer to Exhibit 2-7. Which of the following statements is true?

Accepted Answer

A) Points B and D are more efficient than points A and C. 
B) If the economy's PPF is represented by PPF1, points A and B are productive efficient, while C and D are unattainable. 
C) If the economy's PPF is represented by PPF2, points C and D are productive efficient, while A and B are unattainable. 
D) Point F is more efficient than point D. 
A) Points B and D are more efficient than points A and C. 
B) If the economy's PPF is represented by PPF1, points A and B are productive efficient, while C and D are unattainable. 
C) If the economy's PPF is represented by PPF2, points C and D are productive efficient, while A and B are unattainable. 
D) Point F is more efficient than point D.

Question 17

Exhibit 2-5  
Refer to Exhibit 2-5. The economy is currently operating at point F. The opportunity cost of moving to point E is approximately ____________ televisions.

Accepted Answer

A) 35 
B) 55 
C) zero 
D) 40 
A) 35 
B) 55 
C) zero 
D) 40

Question 18

Country 1 produces two goods, A and B. Country 2 produces the same two goods. Currently, country 1 produces 100A and 200B and country 2 produces 300A and 700B. Which of the following statements is true?

Accepted Answer

A) If country 1 is on its production possibilities frontier, then country 2 must be on its PPF, too. 
B) The PPF for country 1 may be closer to the origin (or further to the left)than the PPF for country 2. 
C) If country 1 is productive inefficient, then so is country 2. 
D) Country 2 is operating on its PPF, but country 1 is clearly not operating on its PPF. 
A) If country 1 is on its production possibilities frontier, then country 2 must be on its PPF, too. 
B) The PPF for country 1 may be closer to the origin (or further to the left)than the PPF for country 2. 
C) If country 1 is productive inefficient, then so is country 2. 
D) Country 2 is operating on its PPF, but country 1 is clearly not operating on its PPF.

Question 19

Suppose the economy goes from a point on its production possibilities frontier (PPF)to a point directly to the left of it. Assuming that the PPF has not shifted, this could be due to

Accepted Answer

A) a gain of resources. 
B) a loss of resources. 
C) technological improvement in the production of both goods. 
D) the implementation of a new law that interferes with productive efficiency. 
A) a gain of resources. 
B) a loss of resources. 
C) technological improvement in the production of both goods. 
D) the implementation of a new law that interferes with productive efficiency.

Question 20

A PPF is bowed outward as a result of

Accepted Answer

A) constant opportunity costs. 
B) increasing opportunity costs. 
C) decreasing opportunity costs. 
D) scarcity. 
E) choice. 
A) constant opportunity costs. 
B) increasing opportunity costs. 
C) decreasing opportunity costs. 
D) scarcity. 
E) choice.

Exam 2: Production Possibilities Frontier Framework

Exhibit 2-9 Refer to Exhibit 2-9. For Adam, the opportunity cost of producing one unit of good A is ____________ unit(s)of good B.

Exhibit 2-8 Refer to Exhibit 2-8. For Maria, the opportunity cost of producing one unit of good Y is ___________ unit(s)of good X.

Exhibit 2-5 Refer to Exhibit 2-5. Which of the following labeled points are productive efficient?

An increase in the quantity of resources available

Consider two points on the PPF: point A, at which there are 50 apples and 40 pears, and point B, at which there are 46 apples and 41 pears. If the economy is currently at point A, the opportunity cost of moving to point B is

Productive efficiency implies that

If there is always a 4-for-1 tradeoff between producing good X and good Y, it follows that the opportunity cost of X (in terms of Y)____________________ and the PPF for these two goods is ______________________.

An economy is productive efficient if it produces

Within the production possibilities frontier (PPF)framework, choice is depicted by the

With a constant opportunity cost between goods A and B, the PPF for goods A and B would

In the production possibilities framework, economic growth is depicted by the PPF

A production possibilities frontier separates an attainable region from an unattainable region.

Economic growth causes the PPF to

Exhibit 2-2 Refer to Exhibit 2-2. The production possibilities frontiers shown in this exhibit depict _______________ opportunity costs.

Suppose Andrea is taking just two courses and is at a point inside (or below)her PPF of grades for those two courses. If Andrea becomes more efficient in her study habits then it is impossible for ____________________, ceteris paribus.

Exhibit 2-7 Refer to Exhibit 2-7. Which of the following statements is true?

Exhibit 2-5 Refer to Exhibit 2-5. The economy is currently operating at point F. The opportunity cost of moving to point E is approximately ____________ televisions.

Country 1 produces two goods, A and B. Country 2 produces the same two goods. Currently, country 1 produces 100A and 200B and country 2 produces 300A and 700B. Which of the following statements is true?

Suppose the economy goes from a point on its production possibilities frontier (PPF)to a point directly to the left of it. Assuming that the PPF has not shifted, this could be due to

A PPF is bowed outward as a result of

What Economics Is About

Supply and Demand: Theory

Prices: Free, Controlled, and Relative

Supply, Demand, and Price: Applications

Elasticity

Consumer Choice: Maximizing Utility and Behavioral Economics

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition, Oligopoly, and Game Theory

Government and Product Markets: Antitrust and Regulation

Factor Markets: With Emphasis on the Labor Market

Wages, Union, and Labor

The Distribution of Income and Poverty

Interest, Rent, and Profit

Market Failure: Externalities, Public Goods, and Asymmetric Information

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

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If there is always a 4-for-1 tradeoff between producing good X and good Y, it follows that the opportunity cost of X (in terms of Y) and the PPF for these two goods is __.