Question 1

Refer to the following figure for the next questions.
 
-The opportunity cost of increasing production of blueberry pies from 7 to 11 pies is______ pies.

Accepted Answer

A)  2 blueberry 
B)  14 apple 
C)  7 blueberry 
D)  4 apple 
E)  2 apple

Question 2

Which of the following is a positive statement?

Accepted Answer

A)  An economist should test every theory at least twice. 
B)  Increases in the minimum wage cause unemployment. 
C)  We ought to deregulate the mortgage market. 
D)  The government must provide unlimited health care to citizens. 
E)  We should forgo some current consumption in order to invest in the future.

Question 3

Which of the following is an important characteristic of good economic models?

Accepted Answer

A)  They deal with the economy as a whole. 
B)  They use the language of mathematics. 
C)  They are flexible in their designs. 
D)  They avoid making predictions. 
E)  They are as complex as the realities they represent.

Question 4

Is it always better to forgo current consumption in order to invest more in capital goods that will provide more growth in society's production possibilities frontier PPF) and make us better off in the future?

Accepted Answer

The answer of Is it always better to forgo current...

Question 5

How can a person who is "better" or more efficient in that he or she has an absolute advantage in the production of various goods on the PPF) at producing several things be made even better off by specialization and trade?

Accepted Answer

The answer of How can a person who is "better"...

Question 6

Explain why, in the figure, a country might rather be at point B than at point A.

Accepted Answer

The answer of Explain why, in the figure, a country...

Question 7

When the opportunity cost of producing a good rises as someone produces more of it, one experiences

Accepted Answer

A)  normative economics. 
B)  increasing relative costs. 
C)  downward-sloping demand. 
D)  inferior goods. 
E)  increasing marginal utility.

Question 8

Refer to the following figure for the next questions.
 
-According to the figure, a new technology that makes it easier to peel, core, and prepare apples will cause

Accepted Answer

A)  the entire production possibilities frontier PPF) to shift outward. 
B)  the entire production possibilities frontier PPF) to shift inward. 
C)  the production possibilities frontier PPF) to rotate outward to a larger maximum quantity of apple pies with no change in maximum blueberry pies. 
D)  the production possibilities frontier PPF) to rotate outward to a larger maximum quantity of blueberry pies with no change in maximum apple pies. 
E)  the production possibilities frontier PPF) to stay exactly the same because there is no change in resources.

Question 9

Ollie proposes that Kukla give Zola 1 table in exchange for 2 rugs. What are Kukla's and Zola's reactions?

Accepted Answer

A)  Kukla likes the proposal, but Zola does not. 
B)  Zola likes the proposal, but Kukla does not. 
C)  Kukla and Zola both like the proposal. 
D)  Neither Kukla nor Zola likes the proposal. 
E)  Ollie's proposal is not feasible.

Question 10

efer to the accompanying figure to answer the next questions.
 
-The inefficient point(s) is/are

Accepted Answer

A)  point A. 
B)  points C and D. 
C)  point C. 
D)  point D. 
E)  points B, C, and E.

Question 11

Car companies build wind tunnels to test the aerodynamics and the handling capabilities of their car designs. The many variables that can be precisely controlled inside the wind tunnel are considered ______factors.

Accepted Answer

A)  normative 
B)  positive 
C)  comparative 
D)  endogenous 
E)  exogenous

Question 12

Refer to the following figures to answer the next questions.
 
-Which allocation point in the short-run production possibilities frontier PPF) will lead to no growth in the long-run PPF?

Accepted Answer

A)  point A 
B)  point B 
C)  point C 
D)  point D 
E)  point E

Question 13

Kristen is planning to add new mulch to all the landscaping beds around her house. She has determined the quantity of mulch she will need and identified these two options for getting the mulch to her house:
1. Kristen can have all the mulch delivered to her yard in one dump truck for $450.
2. Kristen can make four trips to the garden center with her pickup truck and haul it herself. It will cost her $75 per load for the mulch, plus $25 in fuel and truck wear per load. She estimates it will take about five hours to haul and unload all four loads.
What is the full cost of each method? Which method is cheaper? How is opportunity cost relevant?

Accepted Answer

The answer of Kristen is planning to add new mulch...

Question 14

Mikhail and Stefan are both artists who can create sculptures or paintings each day. The following
table describes their maximum outputs per day. Use this table to answer the  question
$\begin{array}{lll}
\hline &\text { Sculptures} & \text {Paintings }\
\hline\text { Mikhail }& 10 & 5 \
\text {Stefan }& 6 & 2 \
\hline
\end{array}$
-What is Mikhail's opportunity cost of a painting?

Accepted Answer

A)  1/2 painting 
B)  1/2 sculpture 
C)  3 paintings 
D)  2 sculptures 
E)  2 paintings

Question 15

Refer to the following table to answer the next questions. $\begin{array}{llc}
\hline &\text {New York Pizzas}&\text { Philly Cheesesteaka } \
\hline \text {Jay-Z} & 40 & 120 \
\text {Solange }& 50 & 125 \
\hline
\end{array}$
-Given an eight-hour workday, to experience gains from trade,

Accepted Answer

A)  Solange should make pizzas and Jay-Z should make cheesesteaks. 
B)  Solange should make cheesesteaks and Jay-Z should make pizzas. 
C)  each should make his or her own cheesesteaks and pizzas. 
D)  Solange should produce both pizzas and cheesesteaks. 
E)  Jay-Z should produce both pizzas and cheesesteaks.

Question 16

An economist's use of experiments and real-world data to test a theory is an example of

Accepted Answer

A)  the scientific method in economics. 
B)  macroeconomics. 
C)  economic growth. 
D)  normative analysis. 
E)  comparative advantage.

Question 17

An increase in general resources that affects the production of both goods on a production possibilities frontier PPF) would cause an

Accepted Answer

A)  inward shift of the PPF. 
B)  outward shift of the PPF. 
C)  outward rotation along the x axis. 
D)  outward rotation along the y axis. 
E)  increase in opportunity cost.

Question 18

Suppose Hoda is a brilliant attorney who can draft especially persuasive legal briefs. She also happens to possess some excellent administrative skills such as typing, filing, assembling binders and notes, and making reservations. Which best describes whether Hoda should hire an administrative assistant to help her?

Accepted Answer

A)  Hoda should not hire an administrative assistant because she has an absolute advantage in performing administrative functions. 
B)  Hoda should not hire an administrative assistant because she likely has a comparative advantage in performing administrative functions. 
C)  Hoda should hire an administrative assistant because the assistant would likely have an absolute advantage in writing legal briefs. 
D)  Hoda should hire an administrative assistant because the assistant would likely have a comparative advantage in performing administrative functions. 
E)  Hoda should hire an administrative assistant because the assistant would likely have a comparative advantage in writing legal briefs.

Question 19

Variables that are controlled for in a model are called

Accepted Answer

A)  normative statements. 
B)  positive statements. 
C)  endogenous factors. 
D)  exogenous factors. 
E)  the scientific method.

Question 20

A town on the Gulf Coast is battered by a massive hurricane that destroys most of its productive resources. The community's production possibilities frontier PPF) would show an

Accepted Answer

A)  inward shift of the PPF. 
B)  outward shift of the PPF. 
C)  outward rotation along the x axis. 
D)  outward rotation along the y axis. 
E)  increase in opportunity cost.

Exam 2: Model Building and Gains From Trade

Refer to the following figure for the next questions. -The opportunity cost of increasing production of blueberry pies from 7 to 11 pies is______ pies.