Question 1

A reason the production possibilities frontier exists is

Accepted Answer

A)  unlimited resources and technology. 
B)  scarcity of resources. 
C)  scarcity of resources and unlimited technology. 
D)  unemployment. 
E)  that people's wants are unlimited. 
A)  unlimited resources and technology. 
B)  scarcity of resources. 
C)  scarcity of resources and unlimited technology. 
D)  unemployment. 
E)  that people's wants are unlimited. B

Question 2

"Comparative advantage" is defined as a situation in which one person can produce

Accepted Answer

A)  more of all goods than another person. 
B)  more of a good than another person. 
C)  a good for a lower dollar cost than another person. 
D)  a good for a lower opportunity cost than another person. 
E)  all goods for lower opportunity costs than another person. 
A)  more of all goods than another person. 
B)  more of a good than another person. 
C)  a good for a lower dollar cost than another person. 
D)  a good for a lower opportunity cost than another person. 
E)  all goods for lower opportunity costs than another person. D

Question 3

-The figure above shows a nation's production possibilities frontier.In the figure, point B shows

Accepted Answer

A)  an unattainable point. 
B)  an attainable point. 
C)  a point with a free lunch. 
D)  a point with no trade off. 
E)  a point at which there are unemployed resources. 
A)  an unattainable point. 
B)  an attainable point. 
C)  a point with a free lunch. 
D)  a point with no trade off. 
E)  a point at which there are unemployed resources. A

Question 4

-The above figure shows the production possibility frontier for a country. What is the opportunity cost per ton of rice to move from point D to E?

Accepted Answer

A)  3000 bottles of wine 
B)  333 bottles of wine 
C)  3 bottles of wine 
D)  1/3 of a bottle of wine 
E)  None of the above answers are correct. 
A)  3000 bottles of wine 
B)  333 bottles of wine 
C)  3 bottles of wine 
D)  1/3 of a bottle of wine 
E)  None of the above answers are correct.

Question 5

-The figure above shows the production possibilities frontier for a country.A combination of 3 million gallons of milk and 3 million gallons of ice cream is

Accepted Answer

A)  unattainable. 
B)  attainable and production efficient. 
C)  attainable and production inefficient. 
D)  unattainable and production efficient. 
E)  More information is needed to determine if the point is attainable or not. 
A)  unattainable. 
B)  attainable and production efficient. 
C)  attainable and production inefficient. 
D)  unattainable and production efficient. 
E)  More information is needed to determine if the point is attainable or not.

Question 6

-The figure above shows the production possibilities frontier for a country.The opportunity cost of a gallon of milk between combination point A and B is

Accepted Answer

A)  4 gallons of ice cream for a gallon of milk. 
B)  3 gallons of ice cream for a gallon of milk. 
C)  1 gallon of ice cream for a gallon of milk. 
D)  1/3 of a gallon of ice cream for a gallon of milk. 
E)  zero because at point A zero milk is being produced. 
A)  4 gallons of ice cream for a gallon of milk. 
B)  3 gallons of ice cream for a gallon of milk. 
C)  1 gallon of ice cream for a gallon of milk. 
D)  1/3 of a gallon of ice cream for a gallon of milk. 
E)  zero because at point A zero milk is being produced.

Question 7

Which of the following statements is correct?
I.As the economy grows, the opportunity costs of economic growth decrease.
Ii. Economic growth has no opportunity cost.
Iii. The opportunity cost of economic growth is current consumption forgone.

Accepted Answer

A)  i only 
B)  ii only 
C)  iii only 
D)  i and iii 
E)  i and ii 
A)  i only 
B)  ii only 
C)  iii only 
D)  i and iii 
E)  i and ii

Question 8

If there is unemployment in an economy, then the

Accepted Answer

A)  production possibilities frontier will shift inwards. 
B)  economy is operating at an unattainable point. 
C)  production possibilities frontier will shift outwards. 
D)  economy is producing at a point inside the production possibilities frontier. 
E)  production possibilities frontier must be bowed inward. 
A)  production possibilities frontier will shift inwards. 
B)  economy is operating at an unattainable point. 
C)  production possibilities frontier will shift outwards. 
D)  economy is producing at a point inside the production possibilities frontier. 
E)  production possibilities frontier must be bowed inward.

Question 9

Increasing opportunity cost exists

Accepted Answer

A)  in the real world. 
B)  as long as there is high unemployment. 
C)  only in theory but not in real life. 
D)  for a country but not for an individual. 
E)  inside the PPF but not on the PPF. 
A)  in the real world. 
B)  as long as there is high unemployment. 
C)  only in theory but not in real life. 
D)  for a country but not for an individual. 
E)  inside the PPF but not on the PPF.

Question 10

-In the above figure, Jack's opportunity cost of producing 1 gallon of bottled water is ________ of soda.

Accepted Answer

A)  2 gallons 
B)  1/2 of a gallon 
C)  6 gallons 
D)  1/4 of a gallon 
E)  1 gallon 
A)  2 gallons 
B)  1/2 of a gallon 
C)  6 gallons 
D)  1/4 of a gallon 
E)  1 gallon

Question 11

Points inside the PPF are all

Accepted Answer

A)  unattainable and have fully employed resources. 
B)  attainable and have fully employed resources. 
C)  unattainable and have some unemployed resources. 
D)  attainable and have some unemployed resources. 
E)  unaffordable. 
A)  unattainable and have fully employed resources. 
B)  attainable and have fully employed resources. 
C)  unattainable and have some unemployed resources. 
D)  attainable and have some unemployed resources. 
E)  unaffordable.

Question 12

Points on the PPF are all

Accepted Answer

A)  unattainable and have fully employed resources. 
B)  free lunches. 
C)  inefficient. 
D)  attainable and have some unemployed resources. 
E)  production efficient. 
A)  unattainable and have fully employed resources. 
B)  free lunches. 
C)  inefficient. 
D)  attainable and have some unemployed resources. 
E)  production efficient.

Question 13

$\begin{array}{ccc}
\text { Possibility } & \begin{array}{c}
\text { Airplanes } \
\text { (number) }
\end{array} & \begin{array}{c}
\text { Cruise ships } \
\text { (number) }
\end{array} \
\hline \text { A } & 100 & 0 \
\text { B } & 80 & 20 \
\text { C } & 50 & 40 \
\text { D } & 0 & 60
\end{array}$
-The table above gives four production possibilities for airplanes and cruise ships.In possibility A, how many resources are devoted to the production of airplanes?

Accepted Answer

A)  0 
B)  few 
C)  most 
D)  all 
E)  It is impossible to tell without more information about the prices of airplanes and cruise ships. 
A)  0 
B)  few 
C)  most 
D)  all 
E)  It is impossible to tell without more information about the prices of airplanes and cruise ships.

Question 14

Once you find the opportunity cost of producing one unit of a good, to find the opportunity cost of producing the other good, you must

Accepted Answer

A)  take the inverse. 
B)  multiply by the total amount produced of the second good. 
C)  divide by the total amount produced of the second good. 
D)  do nothing because the opportunity cost for the first good is the same as the opportunity cost for the second good. 
E)  None of the answers are correct. 
A)  take the inverse. 
B)  multiply by the total amount produced of the second good. 
C)  divide by the total amount produced of the second good. 
D)  do nothing because the opportunity cost for the first good is the same as the opportunity cost for the second good. 
E)  None of the answers are correct.

Question 15

-Which point in the figure above is an attainable combination that would have unemployed resources?

Accepted Answer

A)  point A 
B)  point B 
C)  point C 
D)  point D 
E)  point A and point B 
A)  point A 
B)  point B 
C)  point C 
D)  point D 
E)  point A and point B

Question 16

What does the vertical intercept of a production possibilities frontier represent?

Accepted Answer

The vertical intercept is the

Question 17

-The figure above shows a production possibilities frontier.In the figure, when the economy moves from point D to point C, the opportunity cost of producing one more DVD ________, and when it moves from point C to D, the opportunity cost of producing one more cell phone ________.

Accepted Answer

A)  increases; increases 
B)  increases; decreases 
C)  decreases; decreases 
D)  decreases; increases 
E)  increases; remains the same 
A)  increases; increases 
B)  increases; decreases 
C)  decreases; decreases 
D)  decreases; increases 
E)  increases; remains the same

Question 18

With no international trade, a country ________ consume at a point outside of its PPF; with international trade, a country ________ consume at a point outside of its PPF.

Accepted Answer

A)  cannot; can 
B)  can; cannot 
C)  can; can 
D)  cannot; cannot 
E)  None of the above answers are correct because the presence or absence of international trade has nothing to do with where a country consumes in comparison to its PPF. 
A)  cannot; can 
B)  can; cannot 
C)  can; can 
D)  cannot; cannot 
E)  None of the above answers are correct because the presence or absence of international trade has nothing to do with where a country consumes in comparison to its PPF.

Question 19

-In the table above, how many jackets must Mark forgo for every dress he makes?

Accepted Answer

A)  1 jacket 
B)  16 jackets 
C)  2/3 of a jacket 
D)  1 1/2 jackets 
E)  24 dresses 
A)  1 jacket 
B)  16 jackets 
C)  2/3 of a jacket 
D)  1 1/2 jackets 
E)  24 dresses

Question 20

The United States produced approximately ________ worth of goods and services in 2007.

Accepted Answer

A)  $14 trillion 
B)  $14 billion 
C)  $140 trillion 
D)  $140 billion 
E)  $1,400 trillion 
A)  $14 trillion 
B)  $14 billion 
C)  $140 trillion 
D)  $140 billion 
E)  $1,400 trillion

A reason the production possibilities frontier exists is

"Comparative advantage" is defined as a situation in which one person can produce

-The figure above shows a nation's production possibilities frontier.In the figure, point B shows

-The above figure shows the production possibility frontier for a country. What is the opportunity cost per ton of rice to move from point D to E?

-The figure above shows the production possibilities frontier for a country.A combination of 3 million gallons of milk and 3 million gallons of ice cream is

-The figure above shows the production possibilities frontier for a country.The opportunity cost of a gallon of milk between combination point A and B is

Which of the following statements is correct? I.As the economy grows, the opportunity costs of economic growth decrease. Ii. Economic growth has no opportunity cost. Iii. The opportunity cost of economic growth is current consumption forgone.

If there is unemployment in an economy, then the

Increasing opportunity cost exists

-In the above figure, Jack's opportunity cost of producing 1 gallon of bottled water is ________ of soda.

Points inside the PPF are all

Points on the PPF are all

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 airplanes?

Once you find the opportunity cost of producing one unit of a good, to find the opportunity cost of producing the other good, you must

-Which point in the figure above is an attainable combination that would have unemployed resources?

What does the vertical intercept of a production possibilities frontier represent?

-The figure above shows a production possibilities frontier.In the figure, when the economy moves from point D to point C, the opportunity cost of producing one more DVD , and when it moves from point C to D, the opportunity cost of producing one more cell phone .

With no international trade, a country consume at a point outside of its PPF; with international trade, a country consume at a point outside of its PPF.

-In the table above, how many jackets must Mark forgo for every dress he makes?

The United States produced approximately ________ worth of goods and services in 2007.

Getting Started

The Usand Global Economies

Demand and Supply

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and the Natural Unemployment Rate

Economic Growth

Finance, Saving, and Investment

The Monetary System

Money, Interest, and Inflation

Aggregate Supply and Aggregate Demand

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters

Exam 3: The Economic Problem

A reason the production possibilities frontier exists is

"Comparative advantage" is defined as a situation in which one person can produce

-The figure above shows a nation's production possibilities frontier.In the figure, point B shows

-The above figure shows the production possibility frontier for a country. What is the opportunity cost per ton of rice to move from point D to E?

-The figure above shows the production possibilities frontier for a country.A combination of 3 million gallons of milk and 3 million gallons of ice cream is

-The figure above shows the production possibilities frontier for a country.The opportunity cost of a gallon of milk between combination point A and B is

Which of the following statements is correct? I.As the economy grows, the opportunity costs of economic growth decrease. Ii. Economic growth has no opportunity cost. Iii. The opportunity cost of economic growth is current consumption forgone.

If there is unemployment in an economy, then the

Increasing opportunity cost exists

-In the above figure, Jack's opportunity cost of producing 1 gallon of bottled water is ________ of soda.

Points inside the PPF are all

Points on the PPF are all

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 airplanes?

Once you find the opportunity cost of producing one unit of a good, to find the opportunity cost of producing the other good, you must

-Which point in the figure above is an attainable combination that would have unemployed resources?

What does the vertical intercept of a production possibilities frontier represent?

-The figure above shows a production possibilities frontier.In the figure, when the economy moves from point D to point C, the opportunity cost of producing one more DVD ________, and when it moves from point C to D, the opportunity cost of producing one more cell phone ________.

With no international trade, a country ________ consume at a point outside of its PPF; with international trade, a country ________ consume at a point outside of its PPF.

-In the table above, how many jackets must Mark forgo for every dress he makes?

The United States produced approximately ________ worth of goods and services in 2007.

Getting Started

The Usand Global Economies

Demand and Supply

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and the Natural Unemployment Rate

Economic Growth

Finance, Saving, and Investment

The Monetary System

Money, Interest, and Inflation

Aggregate Supply and Aggregate Demand

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters

-The figure above shows a production possibilities frontier.In the figure, when the economy moves from point D to point C, the opportunity cost of producing one more DVD , and when it moves from point C to D, the opportunity cost of producing one more cell phone .

With no international trade, a country consume at a point outside of its PPF; with international trade, a country consume at a point outside of its PPF.