Exam 1: Limits, Alternatives, and Choices

Production possibilities tables for two countries, North Cantina and South Cantina: North Cantina Production possibilities (alternatives) South Cantina Production possibilities (alternatives) -Refer to the above tables. Suppose that North Cantina is producing 2 units of capital goods and 17 units of consumer goods while South Cantina is producing 2 units of capital goods and 21 units of consumer goods. We can conclude that:

If country A has been investing a larger proportion of its domestic output than Canada has, then, we would expect:

Production possibilities tables for two countries, North Cantina and South Cantina: North Cantina Production possibilities (alternatives) South Cantina Production possibilities (alternatives) -Refer to the above tables. If South Cantina is producing at production alternative D, the opportunity cost of the third unit of capital goods is:

Other things equal, which of the following would shift an economy's production possibilities curve to the left?

Economics involves "marginal analysis" because:

Normative statements are concerned with:

The term "other things equal" means that:

If the production possibilities curve is a straight line:

-An economy cannot produce at a point outside of its production possibilities curve because human material wants are insatiable.

-Refer to the above diagram for athletic shoes. The optimal output of shoes:

If an economy is operating on its production possibilities curve for consumer goods and capital goods, this means that:

The economic concept that serves as the basis for the study of economics is:

(The following economy produces two products.) Production Possibilities Table -Refer to the above table. A change from possibility B to C means that:

-Refer to the above diagram. The movement down the production possibilities curve from point A to point E suggests that the production of:

Most of the disagreement among economists involves:

-The law of increasing opportunity costs is reflected in a production possibilities curve which is:

Some agricultural sub-Saharan nations of Africa have over-farmed and overgrazed their land to the extent that significant portions of it have turned into desert. This suggests that:

Any point inside the production possibilities curve indicates:

Macroeconomics can best be described as the:

-Answer on the basis of the relationships shown in the above four figures. The amount of Y is directly related to the amount of X in: