Question 1

A model without any simplifying assumptions:

Accepted Answer

A)  is highly complex and likely unworkable. 
B)  excludes important predictive variables. 
C)  is very helpful for solving tough, real-world problems. 
D)  does not look like the real-world problem it is meant to address. 
E)  provides simplified solutions to complex problems. 
A)  is highly complex and likely unworkable. 
B)  excludes important predictive variables. 
C)  is very helpful for solving tough, real-world problems. 
D)  does not look like the real-world problem it is meant to address. 
E)  provides simplified solutions to complex problems.

Question 2

Refer to the following figure to answer the questions that follow.
  
-In the figure,point E is:

Accepted Answer

A)  an efficient point. 
B)  unattainable with current resources. 
C)  an inefficient point. 
D)  the equilibrium. 
E)  evidence that trade does not enrich society. 
A)  an efficient point. 
B)  unattainable with current resources. 
C)  an inefficient point. 
D)  the equilibrium. 
E)  evidence that trade does not enrich society.

Question 3

Which of the following is a normative statement?

Accepted Answer

A)  The sky is blue. 
B)  The sky is green with pink polka dots. 
C)  Points on the production possibilities frontier (PPF) are efficient. 
D)  Points outside the PPF are unattainable with current resources. 
E)  We should strive to push the PPF outward. 
A)  The sky is blue. 
B)  The sky is green with pink polka dots. 
C)  Points on the production possibilities frontier (PPF) are efficient. 
D)  Points outside the PPF are unattainable with current resources. 
E)  We should strive to push the PPF outward.

Question 4

How can a person who is "better" or more efficient (in that he or she has an absolute advantage in the production of various goods on the PPF)at producing several things be made even better off by specialization and trade?

Accepted Answer

It sometimes seems counterintuitive that

Question 5

What assumptions do economists make when developing a production possibilities frontier (PPF)?

Accepted Answer

To simplify the complexity of the real w

Question 6

Michael and Angelo 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 questions that follow.
  
-What is Michael's opportunity cost of a sculpture?

Accepted Answer

A)  2 paintings 
B)  1/2 painting 
C)  3 paintings 
D)  1/3 sculpture 
E)  1/2 sculpture 
A)  2 paintings 
B)  1/2 painting 
C)  3 paintings 
D)  1/3 sculpture 
E)  1/2 sculpture

Question 7

What does it mean when society is operating inside the production possibilities frontier (PPF)?

Accepted Answer

The society is not fully utilizing all o

Question 8

The production possibilities frontier (PPF)shows:

Accepted Answer

A)  the trade-off between the efficient production of two different goods. 
B)  the difference between micro analysis and macro analysis. 
C)  the difference between normative and positive analysis. 
D)  how a firm should price a new product. 
E)  how price and quantity are related for a single good. 
A)  the trade-off between the efficient production of two different goods. 
B)  the difference between micro analysis and macro analysis. 
C)  the difference between normative and positive analysis. 
D)  how a firm should price a new product. 
E)  how price and quantity are related for a single good.

Question 9

Suppose Jason is a brilliant attorney who can draft especially persuasive legal briefs.He also happens to possess some excellent administrative skills such as typing,filing,assembling binders and notes,and making reservations.Which best describes whether Jason should hire an administrative assistant to help him?

Accepted Answer

A)  Jason should not hire an administrative assistant because he has an absolute advantage in performing administrative functions. 
B)  Jason should not hire an administrative assistant because he likely has a comparative advantage in performing administrative functions. 
C)  Jason should hire an administrative assistant because the assistant would likely have an absolute advantage in writing legal briefs. 
D)  Jason should hire an administrative assistant because the assistant would likely have a comparative advantage in performing administrative functions. 
E)  Jason should hire an administrative assistant because the assistant would likely have a comparative advantage in writing legal briefs. 
A)  Jason should not hire an administrative assistant because he has an absolute advantage in performing administrative functions. 
B)  Jason should not hire an administrative assistant because he likely has a comparative advantage in performing administrative functions. 
C)  Jason should hire an administrative assistant because the assistant would likely have an absolute advantage in writing legal briefs. 
D)  Jason should hire an administrative assistant because the assistant would likely have a comparative advantage in performing administrative functions. 
E)  Jason should hire an administrative assistant because the assistant would likely have a comparative advantage in writing legal briefs.

Question 10

Consider the production possibilities frontier (PPF) shown in the figure below to answer the questions that follow.
  
-The set of efficient points is best described as which places on the figure?

Accepted Answer

A)  only area O: points outside the PPF. 
B)  points on the PPF only. 
C)  only area I: points inside the PPF. 
D)  area I: inside the PPF and points on the PPF. 
E)  area O: outside the PPF and points on the PPF. 
A)  only area O: points outside the PPF. 
B)  points on the PPF only. 
C)  only area I: points inside the PPF. 
D)  area I: inside the PPF and points on the PPF. 
E)  area O: outside the PPF and points on the PPF.

Question 11

Is it always better to forgo current consumption in order to invest more in goods that will provide more growth in society's production possibilities frontier (PPF)and make us better off in the future by generating more goods for future consumption?

Accepted Answer

No,it is not always better to forgo curr

Question 12

The movie Saving Private Ryan is about a military mission to find and recover a particular soldier-Private Ryan.The movie is predominantly about how much was given up in an effort to save this one particular soldier.The main economic theme of the movie is:

Accepted Answer

A)  absolute advantage. 
B)  opportunity cost. 
C)  normative analysis. 
D)  comparative advantage. 
E)  positive advantage. 
A)  absolute advantage. 
B)  opportunity cost. 
C)  normative analysis. 
D)  comparative advantage. 
E)  positive advantage.

Question 13

Refer to the following table to answer the questions that follow.
  
-Suppose that Alicia Keys and Jay-Z could each make either New York-style pizza or Philly cheesesteaks.Given an eight-hour workday,which of the following would permit them to consume outside their respective production possibilities frontiers (PPFs)?

Accepted Answer

A)  a decrease in technology 
B)  a decrease in resources 
C)  specialization and trade 
D)  efficient use of all their productive resources 
E)  an "Empire State" of mind 
A)  a decrease in technology 
B)  a decrease in resources 
C)  specialization and trade 
D)  efficient use of all their productive resources 
E)  an "Empire State" of mind

Question 14

Michael and Angelo 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 questions that follow.
  
-What is Angelo's opportunity cost of a sculpture?

Accepted Answer

A)  1/2 painting 
B)  1/3 painting 
C)  3 paintings 
D)  1/3 sculpture 
E)  6/10 sculpture 
A)  1/2 painting 
B)  1/3 painting 
C)  3 paintings 
D)  1/3 sculpture 
E)  6/10 sculpture

Question 15

Refer to the following figures to answer the questions that follow.
  
-Which allocation point in the short-run production possibilities frontier (PPF)will lead to NO growth in the long-run PPF?

Accepted Answer

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

Question 16

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between making pizzas and making stromboli. Refer to these figures to answer the questions that follow.
  
-What is Pam's opportunity cost of making a stromboli?

Accepted Answer

A)  30 pizzas 
B)  20 stromboli 
C)  2 pizzas 
D)  1.5 pizzas 
E)  2/3 pizza 
A)  30 pizzas 
B)  20 stromboli 
C)  2 pizzas 
D)  1.5 pizzas 
E)  2/3 pizza

Question 17

Michael and Angelo 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 questions that follow.
  
-What is Michael's opportunity cost of a painting?

Accepted Answer

A)  1/2 painting 
B)  1/2 sculpture 
C)  3 paintings 
D)  2 sculptures 
E)  2 paintings 
A)  1/2 painting 
B)  1/2 sculpture 
C)  3 paintings 
D)  2 sculptures 
E)  2 paintings

Question 18

Use these production possibilities frontier (PPF) curves, which compare the ancient production of agricultural products to art and literature, to answer the questions that follow.

-Suppose a great plague wipes out half of the society's population.Which of the following graphs best depicts how this would affect the PPF?

Accepted Answer

A)  Graph A 
B)  Graph B 
C)  Graph C 
D)  Graph D 
E)  Graph E 
A)  Graph A 
B)  Graph B 
C)  Graph C 
D)  Graph D 
E)  Graph E

Question 19

Consider the following scenario to answer the questions that follow.
Two friends, Rachel and Joey, enjoy baking bread and making apple pies. Rachel takes two hours to bake one loaf of bread and one hour to make one pie. Joey takes four hours to bake one loaf of bread and four hours to make one pie.
-What is Rachel's opportunity cost of baking a pie?

Accepted Answer

A)  2 pies 
B)  1 pie 
C)  1 loaf of bread 
D)  1/2 loaf of bread 
E)  2 loaves of bread 
A)  2 pies 
B)  1 pie 
C)  1 loaf of bread 
D)  1/2 loaf of bread 
E)  2 loaves of bread

Question 20

You are planning to add new mulch to all the landscaping beds around your house.You have determined the quantity of mulch you will need and have identified these two options for getting the mulch to your house:
1.You can have all the mulch delivered to your yard in one dump truck for $450.
2.You can make four trips to the garden center with your pickup truck and haul it yourself.It will cost you $75 per load for the mulch,plus $25 in fuel and truck wear per load.You estimate it will take about five hours to haul and unload all four loads.
What is the full cost of each method? Which method is cheaper? How is opportunity cost relevant?

Accepted Answer

Hauling the mulch yourself would cost $1

A model without any simplifying assumptions:

Refer to the following figure to answer the questions that follow. -In the figure,point E is:

Which of the following is a normative statement?

How can a person who is "better" or more efficient (in that he or she has an absolute advantage in the production of various goods on the PPF)at producing several things be made even better off by specialization and trade?

What assumptions do economists make when developing a production possibilities frontier (PPF)?

Michael and Angelo 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 questions that follow. -What is Michael's opportunity cost of a sculpture?

What does it mean when society is operating inside the production possibilities frontier (PPF)?

The production possibilities frontier (PPF)shows:

Consider the production possibilities frontier (PPF) shown in the figure below to answer the questions that follow. -The set of efficient points is best described as which places on the figure?

Is it always better to forgo current consumption in order to invest more in goods that will provide more growth in society's production possibilities frontier (PPF)and make us better off in the future by generating more goods for future consumption?

The movie Saving Private Ryan is about a military mission to find and recover a particular soldier-Private Ryan.The movie is predominantly about how much was given up in an effort to save this one particular soldier.The main economic theme of the movie is:

Michael and Angelo 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 questions that follow. -What is Angelo's opportunity cost of a sculpture?

Refer to the following figures to answer the questions that follow. -Which allocation point in the short-run production possibilities frontier (PPF)will lead to NO growth in the long-run PPF?

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between making pizzas and making stromboli. Refer to these figures to answer the questions that follow. -What is Pam's opportunity cost of making a stromboli?

Michael and Angelo 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 questions that follow. -What is Michael's opportunity cost of a painting?

Thinking Like an Economist

The Market at Work: Supply and Demand

Market Efficiency

Costs and Production: How Do Businesses Work?

Market Structures

Behavioral Economics and Game Theory

Labor Markets and Earnings

Government in the Economy

What Is Macroeconomics?

Measuring the Macroeconomy, Inflation, and Unemployment

Aggregate Demand and Aggregate Supply

Economic Growth and the Wealth of Nations

Savings, Investment, and the Market for Loanable Funds

Money and the Federal Reserve

Monetary Policy

Fiscal Policy and Budget Deficits

International Economics

Personal Finance

Filters

Exam 2: Economic Models and Gains From Trade

A model without any simplifying assumptions:

Refer to the following figure to answer the questions that follow. -In the figure,point E is:

Which of the following is a normative statement?

How can a person who is "better" or more efficient (in that he or she has an absolute advantage in the production of various goods on the PPF)at producing several things be made even better off by specialization and trade?

What assumptions do economists make when developing a production possibilities frontier (PPF)?

Michael and Angelo 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 questions that follow. -What is Michael's opportunity cost of a sculpture?

What does it mean when society is operating inside the production possibilities frontier (PPF)?

The production possibilities frontier (PPF)shows:

Consider the production possibilities frontier (PPF) shown in the figure below to answer the questions that follow. -The set of efficient points is best described as which places on the figure?

Is it always better to forgo current consumption in order to invest more in goods that will provide more growth in society's production possibilities frontier (PPF)and make us better off in the future by generating more goods for future consumption?

The movie Saving Private Ryan is about a military mission to find and recover a particular soldier-Private Ryan.The movie is predominantly about how much was given up in an effort to save this one particular soldier.The main economic theme of the movie is:

Michael and Angelo 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 questions that follow. -What is Angelo's opportunity cost of a sculpture?

Refer to the following figures to answer the questions that follow. -Which allocation point in the short-run production possibilities frontier (PPF)will lead to NO growth in the long-run PPF?

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between making pizzas and making stromboli. Refer to these figures to answer the questions that follow. -What is Pam's opportunity cost of making a stromboli?

Michael and Angelo 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 questions that follow. -What is Michael's opportunity cost of a painting?

Thinking Like an Economist

The Market at Work: Supply and Demand

Market Efficiency

Costs and Production: How Do Businesses Work?

Market Structures

Behavioral Economics and Game Theory

Labor Markets and Earnings

Government in the Economy

What Is Macroeconomics?

Measuring the Macroeconomy, Inflation, and Unemployment

Aggregate Demand and Aggregate Supply

Economic Growth and the Wealth of Nations

Savings, Investment, and the Market for Loanable Funds

Money and the Federal Reserve

Monetary Policy

Fiscal Policy and Budget Deficits

International Economics

Personal Finance

Filters