Question 1

-Refer to Exhibit 2-8.Who has the comparative advantage in the production of good X?

Accepted Answer

A)  Maria 
B)  Maya 
C)  Both Maria and Maya 
D)  Neither Maria nor Maya 
A)  Maria 
B)  Maya 
C)  Both Maria and Maya 
D)  Neither Maria nor Maya B

Question 2

A PPF is more likely to be a downward-sloping curve that is bowed outward than a downward-sloping straight line because most resources are

Accepted Answer

A)  better suited for the production of some goods than others. 
B)  used efficiently. 
C)  relatively cheap at low levels of output. 
D)  used to produce consumption goods. 
A)  better suited for the production of some goods than others. 
B)  used efficiently. 
C)  relatively cheap at low levels of output. 
D)  used to produce consumption goods. A

Question 3

-Refer to Exhibit 2-6.Which graph depicts a technological breakthrough in the production of good X only?

Accepted Answer

A)  (1) 
B)  (2) 
C)  (3) 
D)  (4) 
E)  none of the above 
A)  (1) 
B)  (2) 
C)  (3) 
D)  (4) 
E)  none of the above C

Question 4

Exhibit 2-10
​   ​  
-Refer Exhibit 2-10.Person A has the comparative advantage in the production of _____________ and person B has the comparative advantage in the production of __________________.

Accepted Answer

A)  X; Y 
B)  Y; X 
C)  neither good X nor good Y; neither good X nor good Y 
D)  both good X and good Y; neither good X nor good Y 
E)  ​neither good X nor good Y; both good X and good Y 
A)  X; Y 
B)  Y; X 
C)  neither good X nor good Y; neither good X nor good Y 
D)  both good X and good Y; neither good X nor good Y 
E)  ​neither good X nor good Y; both good X and good Y

Question 5

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 6

-Refer to Exhibit 2-8.If Maria and Maya each specialize in the good in which she has a comparative advantage and then engage in trade,____________________ can consume a combination of goods that lies beyond her PPF.

Accepted Answer

A)  Maria,but not Maya, 
B)  Maya,but not Maria, 
C)  both Maria and Maya 
D)  neither Maria nor Maya 
A)  Maria,but not Maya, 
B)  Maya,but not Maria, 
C)  both Maria and Maya 
D)  neither Maria nor Maya

Question 7

Along its production possibilities frontier (PPF)an economy can produce 0X and 15Y,10X and 10Y,20X and 5Y,or 30X and 0Y.It follows that the PPF is

Accepted Answer

A)  a downward-sloping straight line. 
B)  an upward-sloping straight line. 
C)  a downward-sloping bowed-outward curve. 
D)  a downward-sloping bowed-inward curve. 
A)  a downward-sloping straight line. 
B)  an upward-sloping straight line. 
C)  a downward-sloping bowed-outward curve. 
D)  a downward-sloping bowed-inward curve.

Question 8

Carlos can produce the following combinations of X and Y: 10X and 10Y,5X and 15Y,and 0X and 20Y.The opportunity cost of one unit of X for Carlos is

Accepted Answer

A)  1 unit of Y. 
B)  2 units of Y. 
C)  1/2 unit of Y. 
D)  1/4 unit of Y. 
E)  none of the above 
A)  1 unit of Y. 
B)  2 units of Y. 
C)  1/2 unit of Y. 
D)  1/4 unit of Y. 
E)  none of the above

Question 9

The law of increasing opportunity cost results from the varying ability of resources to adapt to the production of different goods and it helps to explain why production possibilities curves are typically bowed outward.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is an illustration of the law of increasing opportunity costs?

Accepted Answer

A)  As more cars are produced,the opportunity cost of each additional car is greater than for the preceding unit. 
B)  As more cars are produced,the opportunity cost of each additional car is less than for the preceding unit. 
C)  As more cars are produced,the opportunity cost of each additional car is the same as for the preceding unit. 
D)  People pay lower prices for cars the higher the costs of producing cars. 
A)  As more cars are produced,the opportunity cost of each additional car is greater than for the preceding unit. 
B)  As more cars are produced,the opportunity cost of each additional car is less than for the preceding unit. 
C)  As more cars are produced,the opportunity cost of each additional car is the same as for the preceding unit. 
D)  People pay lower prices for cars the higher the costs of producing cars.

Question 11

Why is the production possibilities frontier (PPF)typically bowed-outward? Under what circumstances would the PPF be a straight line?

Accepted Answer

The PPF is typically bowed-outward due t

Question 12

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 13

Which of the following statements is true?

Accepted Answer

A)  In a world of efficiently used scarce resources,more of one good necessarily means less of some other good. 
B)  The law of increasing opportunity costs assumes that all people have the same ability to produce goods. 
C)  Efficiency implies that it is impossible to get more of one good without getting less of another. 
D)  Even if a country has unemployed resources,it can still be operating on its production possibilities frontier (PPF). 
E)  a and c 
A)  In a world of efficiently used scarce resources,more of one good necessarily means less of some other good. 
B)  The law of increasing opportunity costs assumes that all people have the same ability to produce goods. 
C)  Efficiency implies that it is impossible to get more of one good without getting less of another. 
D)  Even if a country has unemployed resources,it can still be operating on its production possibilities frontier (PPF). 
E)  a and c

Question 14

Production possibilities frontiers (PPFs)can shift outward,but they do not shift inward.

Accepted Answer

A) True 
 B)False

Question 15

Michael can produce the following combinations of X and Y: 10X and 10Y,5X and 15Y,and 0X and 20Y.Vernon can produce the following combinations of X and Y: 100X and 20Y,50X and 30Y,or 0X and 40Y.It follows that

Accepted Answer

A)  Michael has the comparative advantage in producing X and Vernon has the comparative advantage in producing Y. 
B)  Michael has the comparative advantage in producing Y and Vernon has the comparative advantage in producing X. 
C)  Neither Michael nor Vernon has a comparative advantage in producing X. 
D)  Neither Michael nor Vernon has a comparative advantage in producing Y. 
E)  There is not enough information to answer the question. 
A)  Michael has the comparative advantage in producing X and Vernon has the comparative advantage in producing Y. 
B)  Michael has the comparative advantage in producing Y and Vernon has the comparative advantage in producing X. 
C)  Neither Michael nor Vernon has a comparative advantage in producing X. 
D)  Neither Michael nor Vernon has a comparative advantage in producing Y. 
E)  There is not enough information to answer the question.

Question 16

Both country 1 and country 2 are located on their respective production possibilities frontiers (PPFs)for consumer goods and capital goods,but country 1 produces twice the output of both types of goods compared to country 2.It follows that

Accepted Answer

A)  country 1's PPF lies further to the right than country 2's PPF. 
B)  country 1 has a smaller population than country 2. 
C)  country 1 has a bigger population than country 2. 
D)  country 1 is efficient and country 2 is inefficient. 
E)  none of the above 
A)  country 1's PPF lies further to the right than country 2's PPF. 
B)  country 1 has a smaller population than country 2. 
C)  country 1 has a bigger population than country 2. 
D)  country 1 is efficient and country 2 is inefficient. 
E)  none of the above

Question 17

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 changes her work habits then it is impossible for

Accepted Answer

A)  either one of her grades to rise. 
B)  both of her grades to rise. 
C)  both of her grades to fall. 
D)  either one of her grades to rise while the other grade remains constant. 
E)  none of the above is impossible in this situation 
A)  either one of her grades to rise. 
B)  both of her grades to rise. 
C)  both of her grades to fall. 
D)  either one of her grades to rise while the other grade remains constant. 
E)  none of the above is impossible in this situation

Question 18

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

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

Question 19

Suppose the economy goes from a point on its production possibilities frontier (PPF)to a point below that PPF.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)  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)  a new law that interferes with productive efficiency.

Question 20

-Refer to Exhibit 2-2.If PPF2 is the relevant production possibilities frontier,then point __________ is productive efficient.

Accepted Answer

A)  B 
B)  D 
C)  I 
D)  F 
E)  both b and d 
A)  B 
B)  D 
C)  I 
D)  F 
E)  both b and d

Exam 2: Production Possibilities Frontier Framework

-Refer to Exhibit 2-8.Who has the comparative advantage in the production of good X?

A PPF is more likely to be a downward-sloping curve that is bowed outward than a downward-sloping straight line because most resources are

-Refer to Exhibit 2-6.Which graph depicts a technological breakthrough in the production of good X only?

Exhibit 2-10 ​ ​ -Refer Exhibit 2-10.Person A has the comparative advantage in the production of _____________ and person B has the comparative advantage in the production of __________________.

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

-Refer to Exhibit 2-8.If Maria and Maya each specialize in the good in which she has a comparative advantage and then engage in trade,____________________ can consume a combination of goods that lies beyond her PPF.

Along its production possibilities frontier (PPF)an economy can produce 0X and 15Y,10X and 10Y,20X and 5Y,or 30X and 0Y.It follows that the PPF is

Carlos can produce the following combinations of X and Y: 10X and 10Y,5X and 15Y,and 0X and 20Y.The opportunity cost of one unit of X for Carlos is

The law of increasing opportunity cost results from the varying ability of resources to adapt to the production of different goods and it helps to explain why production possibilities curves are typically bowed outward.

Which of the following is an illustration of the law of increasing opportunity costs?

Why is the production possibilities frontier (PPF)typically bowed-outward? Under what circumstances would the PPF be a straight line?

An economy is productive efficient if it produces

Which of the following statements is true?

Production possibilities frontiers (PPFs)can shift outward,but they do not shift inward.

Michael can produce the following combinations of X and Y: 10X and 10Y,5X and 15Y,and 0X and 20Y.Vernon can produce the following combinations of X and Y: 100X and 20Y,50X and 30Y,or 0X and 40Y.It follows that

Both country 1 and country 2 are located on their respective production possibilities frontiers (PPFs)for consumer goods and capital goods,but country 1 produces twice the output of both types of goods compared to country 2.It follows that

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 changes her work habits then it is impossible for

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

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

-Refer to Exhibit 2-2.If PPF2 is the relevant production possibilities frontier,then point __________ is productive efficient.

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

International Trade

International Finance

The Economic Case for and Against Government: Five Topics Considered

Stocks,bonds,futures,and Options

Stocks,bonds,futures,and Options

Filters

Exhibit 2-10 -Refer Exhibit 2-10.Person A has the comparative advantage in the production of _ and person B has the comparative advantage in the production of ______.

-Refer to Exhibit 2-2.If PPF₂ is the relevant production possibilities frontier,then point __________ is productive efficient.