Exam 1: Economic Issues and Concepts

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.Which of the following statements about Tristan's and Thomas's opportunity costs is correct?

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.If the economy moves from point C to point D,what is the opportunity cost of each extra tonne of bananas produced?

Suppose that one unit of labour can produce either 5 units of wool or 2 pineapples.What is the opportunity cost of producing 1 pineapple?

A point lying inside the production possibilities boundary is one at which

FIGURE 1-5 -Refer to Figure 1-5.Which production possibilities boundaries exhibit decreasing opportunity costs?

Scarcity arises from limited resources.For this reason,all economic choices involve

A straight-line production possibilities boundary differs from a concave boundary in which of the following ways?

With a budget of $500 000,a school board can choose to purchase 20 000 textbooks or 2000 laptop computers (or some intermediate combination)for use in classrooms. FIGURE 1-2 -Refer to Figure 1-2.What is the price of a textbook in this example?

Which of the following is illustrated by the circular flow of income?

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.Suppose this economy moves from point D to point F,where it is then producing bananas exclusively.Which of the following explanations best describes the opportunity cost involved in producing this extra 100 tonnes of bananas?

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.Which of the following combinations of regular coffees and lattes is affordable over the one-month period,given Madeleine's budget?

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 pie?

In command economies,economic behaviour is

A farmer selling tomatoes and corn at a roadside,and a currency trader in Hong Kong are each participating in

Consider a production possibilities boundary showing the possible combinations of military goods and civilian goods that a country can produce.Suppose that the country is currently at a point on the boundary.If the production of military goods is increased,the production of civilian goods will necessarily

A country's production possibilities boundary shows that

Which of the following has most contributed to the globalization of the economy?

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.Suppose the economy is currently producing at point A.What is the opportunity cost to this economy of increasing production of bananas by 100 tonnes?

If a country's production possibilities boundary is drawn as a straight (downward-sloping)line it indicates

Behaviour in free-market economies is