Exam 1: Limits, Alternatives, and Choices

-Refer to the above production possibilities curves. Given production possibilities curve (a), the combination of civilian and war goods indicated by point X is unattainable to this economy.

-Refer to the above production possibilities curves. The movement from curve (a) to curve (b) implies an increase in the quantity and/or quality of society's productive resources.

Refer to the diagram below. The concave shape of each production possibilities curve indicates that:

-Refer to the above production possibilities curves. Given production possibilities curve (a), point Y indicates that society is failing to use available resources efficiently.

-In the above diagram the equation for this line is:

Production possibilities tables for two countries, North Cantina and South Cantina: North Cantina Production possibilities (alternatives) South Cantina Production possibilities (alternatives) -Refer to the table below. According to the production possibilities schedule for the economy which produces two products, a combination of four tanks and 650 autos is: Production Possibilities

The concept of opportunity cost:

"Consumers spend their incomes to get the maximum benefit or satisfaction from the goods and services they purchase." This is a reflection of:

-In the above diagram variables x and y are:

-Refer to the above table. For these data the law of increasing opportunity costs is reflected in the fact that:

-In line (3) on the above graph, variables x and y are:

The production possibilities curve below shows the hypothetical relationship between the production of capital goods and consumer goods in an economy. -Refer to the above table. What is the total opportunity cost of producing three units of capital goods?

A point inside the production possibilities curve is:

Which one of the following statements is correct?

-The present choice of position on the production possibilities curve will not influence the future location of the curve.

Suppose an economist says that "Other things equal, the lower the price of bananas, the greater the amount of bananas purchased." This statement indicates that:

The entrepreneur's sole function is to combine other resources (land, labour, and capital) in the production of some good or service.

-Refer to the above graph. Using Q_s for quantity supplied and P for price, which of the following equations correctly states the supply of this product?

Refer to the following production possibilities curves. Curve (a) is the current curve for the economy. Given production possibilities curve (a), the combination of capital and consumer goods indicated by point L:

-The above data suggest that: