Exam 1: Economic Issues and Concepts

A move from inside the production possibilities boundary to the boundary itself could be caused by

Suppose that a bakeshop with 5 employees can produce both pies and cakes.In one day,if all resources are devoted to baking pies,the shop can produce 125 pies; if all resources are devoted to baking cakes,the shop can produce 50.What is the shop's opportunity cost of producing any one cake?

FIGURE 1-5 -Refer to Figure 1-5.Suppose that the relevant production possibilities boundary is the one labelled B.This boundary implies that

A basic underlying point in economics is that

With a budget of $200 million,the government can choose to purchase 4 helicopters or repair 200 km of highway. FIGURE 1-1 -Refer to Figure 1-1.Which of the following combinations of kilometres of highway repair and helicopters is unaffordable,given the government's budget of $200 million?

Consider the production possibilities boundary (PPB)of an economy.Economic growth is illustrated by

Consider Canada's production possibilities boundary.During the nineteenth and early twentieth centuries,millions of people immigrated to western Canada.The effect on the Canadian economy was to

Suppose you own a courier service and you use two types of delivery vehicles - Model A,which costs $30 000 to purchase,and Model B,which costs $50 000 to purchase.You have a budget of $300 000 for the purchase of new vehicles.Which of the following statements best describes the shape of your budget line?

In practice,the term "centrally planned economy" refers to an economy in which

Madeleine allows herself $100 per month for purchasing coffee.The diagram below illustrates the choices available to her in each month. FIGURE 1-3 -Refer to Figure 1-3.What is the price of a regular coffee in this example?

Specialization of labour led to greater efficiency in the allocation of resources because of

Figure 1-7 shows the production possibilities boundary for an economy that produces two goods - cotton and bananas. FIGURE 1-7 -Refer to Figure 1-7.A production possibilities boundary is shown for an economy that produces two goods - cotton and bananas,both measured in tonnes produced per year.Which of the following statements best describes the difference in opportunity costs that this economy faces at point A compared to point E?

A greater specialization of labour leads to which of the following major results?

With regard to various economic systems,most economists agree that

FIGURE 1-5 -Refer to Figure 1-5.Which production possibilities boundaries are consistent with increasing opportunity costs?

Economists usually assume that households and firms,respectively,maximize

Suppose Amin has a job that pays him $87 000 per year (after taxes).He is considering taking an unpaid leave of absence from his job to complete a 12-month MBA program.Tuition is $75 000 and books and materials will cost $5000.Living expenses for the 12-month period will be cheaper by $500 per month,mostly due to lower apartment rental costs.What is the opportunity cost of Amin's 1-year MBA program?

With a budget of $200 million,the government can choose to purchase 4 helicopters or repair 200 km of highway. FIGURE 1-1 -Refer to Figure 1-1.For the government,the opportunity cost of one kilometre of highway repair is

The diagram below shows two production possibilities boundaries for Country X. FIGURE 1-4 -Refer to Figure 1-4.If Country X were producing at point C,

The table below illustrates that,in one day,Tristan can produce either 12 fishing lures or mow 3 lawns,while Thomas can produce either 6 fishing lures or mow 6 lawns. TABLE 1-1 -Refer to Table 1-1.If Tristan and Thomas want to maximize their joint output from one day of work,how should they specialize their production?