Deck 2: Trade-Offs, comparative Advantage, and the Market System

Question 1

Tesla Motors manufacturers its cars at a plant in Fremont,California.At this plant,Tesla is able to take advantage of the high level of technical training possessed by its American workers,but it also sacrifices the ability to pay lower wages had it chosen to open its plant in a low-wage country such as Mexico,India,or China.In deciding to open the Fremont plant,Tesla

A)faced no trade-offs because employing more technically-skilled workers increased efficiency.
B)faced a trade-off between higher cost and lower precision.
C)adopted a negative technological change because it chose high-skilled workers over low-paid workers.
D)eroded some of its competitiveness in the luxury electric car market because of its increased cost of production.

Answer 1

B

Question 2

The production possibilities frontier model shows that

A)if consumers decide to buy more of a product,its price will increase.
B)a market economy is more efficient in producing goods and services than is a centrally planned economy.
C)economic growth can only be achieved by free market economies.
D)if all resources are fully and efficiently utilized,more of one good can be produced only by producing less of another good.

Answer 2

D

Question 3

Figure 2-1
Refer to Figure 2-1.________ is (are)unattainable with current resources.

A)Point A
B)Point B
C)Point C
D)Points A and C

Answer 3

C

Question 4

Scarcity

A)stems from the incompatibility between limited resources and unlimited wants.
B)can be overcome by discovering new resources.
C)can be eliminated by rationing products.
D)is a bigger problem in market economies than in socialist economies.

Question 5

If the production possibilities frontier is ________,then opportunity costs are constant as more of one good is produced.

A)bowed out
B)bowed in
C)non-linear
D)linear

Question 6

Figure 2-1
Refer to Figure 2-1.________ is (are)technically efficient.

A)Point A
B)Point B
C)Point C
D)Points B and C

Question 7

The principle of opportunity cost is that

A)in a market economy,taking advantage of profitable opportunities involves some money cost.
B)the economic cost of using a factor of production is the alternative use of that factor that is given up.
C)taking advantage of investment opportunities involves costs.
D)the cost of production varies depending on the opportunity for technological application.

Question 8

The attainable production points on a production possibilities curve are

A)the horizontal and vertical intercepts.
B)the points along the production possibilities frontier.
C)the points outside the area enclosed by the production possibilities frontier.
D)the points along and inside the production possibility frontier.

Question 9

Figure 2-1
Refer to Figure 2-1.Point B is

A)technically efficient.
B)unattainable with current resources.
C)inefficient in that not all resources are being used.
D)the equilibrium output combination.

Question 10

The production possibilities frontier shows the ________ combinations of two products that can be produced in a particular time period with available resources.

A)minimum attainable
B)maximum attainable
C)only
D)equitable

Question 11

Figure 2-1
Refer to Figure 2-1.________ is (are)inefficient in that not all resources are being used.

A)Point A
B)Point B
C)Point C
D)Points A and C

Question 12

Figure 2-2 above shows the production possibilities frontier for Mendonca,an agrarian nation that produces two goods,meat and vegetables.

-Refer to Figure 2-2.What is the opportunity cost of one pound of vegetables?

A) $\frac { 3 } { 4 }$ pound of meat
B)1.2 pounds of meat
C) $1 \frac { 1 } { 3 }$ pounds of meat
D)12 pounds of meat

Question 13

Pierre can produce either a combination of 20 bow ties and 30 neckties or a combination of 35 bow ties and 15 neckties.If he now produces 35 bow ties and 15 neckties,what is the opportunity cost of producing an additional 15 neckties?

A)2 bow ties
B)15 bow ties
C)20 bow ties
D)35 bow ties

Question 14

Bella can produce either a combination of 60 silk roses and 80 silk leaves or a combination of 70 silk roses and 55 silk leaves.If she now produces 60 silk roses and 80 silk leaves,what is the opportunity cost of producing an additional 10 silk roses?

A)2.5 silk leaves
B)10 silk leaves
C)25 silk leaves
D)55 silk leaves

Question 15

The production possibilities frontier model assumes which of the following?

A)Labor,capital,land,and natural resources are unlimited in quantity.
B)The economy produces only two products.
C)Production of any level of the two products that the economy produces is currently possible.
D)The level of technology is variable.

Question 16

The points outside the production possibilities frontier are

A)efficient.
B)attainable.
C)inefficient.
D)unattainable.

Question 17

In a production possibilities frontier model,a point ________ the frontier is productively inefficient.

A)along
B)inside
C)outside
D)at either intercept of

Question 18

Figure 2-1
Refer to Figure 2-1.Point A is

A)technically efficient.
B)unattainable with current resources.
C)inefficient in that not all resources are being used.
D)the equilibrium output combination.

Question 19

Figure 2-1
Refer to Figure 2-1.Point C is

A)technically efficient.
B)unattainable with current resources.
C)inefficient in that not all resources are being used.
D)is the equilibrium output combination.

Question 20

Figure 2-2 above shows the production possibilities frontier for Mendonca,an agrarian nation that produces two goods,meat and vegetables.

-Refer to Figure 2-2.What is the opportunity cost of one pound of meat?

A) $\frac { 3 } { 4 }$ pound of vegetables
B) $1 \frac { 1 } { 3 }$ pounds of vegetables
C)1.6 pounds of vegetables
D)16 pounds of vegetables

Question 21

Figure 2-2 above shows the production possibilities frontier for Mendonca,an agrarian nation that produces two goods,meat and vegetables.

-Refer to Figure 2-2.Suppose Mendonca is currently producing 60 pounds of vegetables per period.How much meat is it also producing,assuming that resources are fully utilized?

A)45 pounds of meat
B)75 pounds of meat
C)80 pounds of meat
D)100 pounds of meat

Question 22

Table 2-2
Production choices for Billie's Bedroom Shop
$\begin{array}{|l|l|l|}\hline \text { Choice } & \begin{array}{l}\text { Quantity of } \\\text { Pillows } \\\text { Produced }\end{array} & \begin{array}{l}\text { Quantity of } \\\text { Blankets } \\\text { Produced }\end{array} \\\hline \text { A } & 36 & 0 \\\hline \text { B } & 27 & 7 \\\hline \text { C } & 18 & 14 \\\hline \text { D } & 9 & 21 \\\hline \text { E } & 0 & 28 \\\hline\end{array}$


-Refer to Table 2-2.Assume Billie's Bedroom Shop only produces pillows and blankets.Billie faces ________ opportunity costs in the production of pillows and blankets.

A)increasing
B)constant
C)decreasing
D)negative

Question 23

If opportunity costs are constant,the production possibilities frontier would be graphed as

A)a ray from the origin.
B)a positively sloped straight line.
C)a negatively sloped curve bowed in toward the origin.
D)a negatively sloped straight line.

Question 24

Table 2-2
Production choices for Billie's Bedroom Shop
$\begin{array}{|l|l|l|}\hline \text { Choice } & \begin{array}{l}\text { Quantity of } \\\text { Pillows } \\\text { Produced }\end{array} & \begin{array}{l}\text { Quantity of } \\\text { Blankets } \\\text { Produced }\end{array} \\\hline \text { A } & 36 & 0 \\\hline \text { B } & 27 & 7 \\\hline \text { C } & 18 & 14 \\\hline \text { D } & 9 & 21 \\\hline \text { E } & 0 & 28 \\\hline\end{array}$


-Refer to Table 2-2.Assume Billie's Bedroom Shop only produces pillows and blankets.A combination of 5 pillows and 21 blankets would appear

A)along Billie's production possibilities frontier.
B)inside Billie's production possibilities frontier.
C)outside Billie's production possibilities frontier.
D)at the vertical intercept of Billie's production possibilities frontier.

Question 25

A production possibilities frontier with a bowed-outward shape indicates

A)the possibility of inefficient production.
B)constant opportunity costs as more and more of one good is produced.
C)increasing opportunity costs as more and more of one good is produced.
D)decreasing opportunity costs as more and more of one good is produced.

Question 26

Figure 2-2 above shows the production possibilities frontier for Mendonca,an agrarian nation that produces two goods,meat and vegetables.

-Refer to Figure 2-2.If Mendonca chooses to produce 160 pounds of vegetables,how much meat can it produce to maximize production?

A)0 pounds of meat
B)30 pounds of meat
C)60 pounds of meat
D)120 pounds of meat

Question 27

Table 2-2
Production choices for Billie's Bedroom Shop
$\begin{array}{|l|l|l|}\hline \text { Choice } & \begin{array}{l}\text { Quantity of } \\\text { Pillows } \\\text { Produced }\end{array} & \begin{array}{l}\text { Quantity of } \\\text { Blankets } \\\text { Produced }\end{array} \\\hline \text { A } & 36 & 0 \\\hline \text { B } & 27 & 7 \\\hline \text { C } & 18 & 14 \\\hline \text { D } & 9 & 21 \\\hline \text { E } & 0 & 28 \\\hline\end{array}$


-Refer to Table 2-2.Assume Billie's Bedroom Shop only produces pillows and blankets.A combination of 27 pillows and 14 blankets would appear

A)along Billie's production possibilities frontier.
B)inside Billie's production possibilities frontier.
C)outside Billie's production possibilities frontier.
D)at the vertical intercept of Billie's production possibilities frontier.

Question 28

Figure 2-2 above shows the production possibilities frontier for Mendonca,an agrarian nation that produces two goods,meat and vegetables.

-Refer to Figure 2-2.The linear production possibilities frontier in the figure indicates that

A)Mendonca has a comparative advantage in the production of vegetables.
B)Mendonca has a comparative disadvantage in the production of meat.
C)the tradeoff between meat and vegetables is constant.
D)it is progressively more expensive to produce meat.

Question 29

Table 2-1
Production choices for Tomaso's Trattoria
$$\begin{array} { | c | c | c | } \hline \text { Choice } & \begin{array} { l } \text { Quantity of } \\\text { Pizzas } \\\text { Produced }\end{array} & \begin{array} { l } \text { Quantity of } \\\text { Calzones } \\\text { Produced }\end{array} \\\hline \text { A } & 48 & 0 \\\hline \text { B } & 36 & 15 \\\hline \text { C } & 24 & 30 \\\hline \text { D } & 12 & 45 \\\hline \text { E } & 0 & 60 \\\hline\end{array}$$

-Refer to Table 2-1.Assume Tomaso's Trattoria only produces pizzas and calzones.A combination of 24 pizzas and 15 calzones would appear

A)along Tomaso's production possibilities frontier.
B)inside Tomaso's production possibilities frontier.
C)outside Tomaso's production possibilities frontier.
D)at the horizontal intercept of Tomaso's production possibilities frontier.

Question 30

Table 2-1
Production choices for Tomaso's Trattoria
$$\begin{array} { | c | c | c | } \hline \text { Choice } & \begin{array} { l } \text { Quantity of } \\\text { Pizzas } \\\text { Produced }\end{array} & \begin{array} { l } \text { Quantity of } \\\text { Calzones } \\\text { Produced }\end{array} \\\hline \text { A } & 48 & 0 \\\hline \text { B } & 36 & 15 \\\hline \text { C } & 24 & 30 \\\hline \text { D } & 12 & 45 \\\hline \text { E } & 0 & 60 \\\hline\end{array}$$

-Refer to Table 2-1.Assume Tomaso's Trattoria only produces pizzas and calzones.A combination of 36 pizzas and 30 calzones would appear

A)along Tomaso's production possibilities frontier.
B)inside Tomaso's production possibilities frontier.
C)outside Tomaso's production possibilities frontier.
D)at the horizontal intercept of Tomaso's production possibilities frontier.

Question 31

Figure 2-3
Refer to Figure 2-3.Sergio Vignetto raises cattle and llamas on his land.His land is equally suitable for raising either animal.Which of the graphs in Figure 2-3 represent his production possibilities frontier?

A)Graph A
B)Graph B
C)Graph C
D)either Graph A or Graph C
E)either Graph B or Graph C

Question 32

Increasing opportunity cost is represented by a ________ production possibilities frontier.

A)linear
B)bowed in
C)bowed out
D)vertical

Question 33

The slope of a production possibilities frontier

A)has no economic relevance or meaning.
B)is always constant.
C)is always varying.
D)measures the opportunity cost of producing one more unit of a good.

Question 34

Table 2-1
Production choices for Tomaso's Trattoria
$$\begin{array} { | c | c | c | } \hline \text { Choice } & \begin{array} { l } \text { Quantity of } \\\text { Pizzas } \\\text { Produced }\end{array} & \begin{array} { l } \text { Quantity of } \\\text { Calzones } \\\text { Produced }\end{array} \\\hline \text { A } & 48 & 0 \\\hline \text { B } & 36 & 15 \\\hline \text { C } & 24 & 30 \\\hline \text { D } & 12 & 45 \\\hline \text { E } & 0 & 60 \\\hline\end{array}$$

-Refer to Table 2-1.Assume Tomaso's Trattoria only produces pizzas and calzones.Tomaso faces ________ opportunity costs in the production of pizzas and calzones.

A)increasing
B)decreasing
C)constant
D)negative

Question 35

Table 2-2
Production choices for Billie's Bedroom Shop
$\begin{array}{|l|l|l|}\hline \text { Choice } & \begin{array}{l}\text { Quantity of } \\\text { Pillows } \\\text { Produced }\end{array} & \begin{array}{l}\text { Quantity of } \\\text { Blankets } \\\text { Produced }\end{array} \\\hline \text { A } & 36 & 0 \\\hline \text { B } & 27 & 7 \\\hline \text { C } & 18 & 14 \\\hline \text { D } & 9 & 21 \\\hline \text { E } & 0 & 28 \\\hline\end{array}$


-Refer to Table 2-2.Assume Billie's Bedroom Shop only produces pillows and blankets.A combination of 9 pillows and 21 blankets would appear

A)along Billie's production possibilities frontier.
B)inside Billie's production possibilities frontier.
C)outside Billie's production possibilities frontier.
D)at the vertical intercept of Billie's production possibilities frontier.

Question 36

An inward shift of a nation's production possibilities frontier can occur due to

A)a reduction in unemployment.
B)a natural disaster like a hurricane or bad earthquake.
C)a change in the amounts of one good desired.
D)an increase in the labor force.

Question 37

________ marginal opportunity cost implies that the more resources already devoted to any activity,the payoff from allocating yet more resources to that activity increases by progressively smaller amounts.

A)Increasing
B)Decreasing
C)Constant
D)Negative

Question 38

Table 2-1
Production choices for Tomaso's Trattoria
$$\begin{array} { | c | c | c | } \hline \text { Choice } & \begin{array} { l } \text { Quantity of } \\\text { Pizzas } \\\text { Produced }\end{array} & \begin{array} { l } \text { Quantity of } \\\text { Calzones } \\\text { Produced }\end{array} \\\hline \text { A } & 48 & 0 \\\hline \text { B } & 36 & 15 \\\hline \text { C } & 24 & 30 \\\hline \text { D } & 12 & 45 \\\hline \text { E } & 0 & 60 \\\hline\end{array}$$

-Refer to Table 2-1.Assume Tomaso's Trattoria only produces pizzas and calzones.A combination of 24 pizzas and 30 calzones would appear

A)along Tomaso's production possibilities frontier.
B)inside Tomaso's production possibilities frontier.
C)outside Tomaso's production possibilities frontier.
D)at the horizontal intercept of Tomaso's production possibilities frontier.

Question 39

Figure 2-3
Refer to Figure 2-3.Sergio Vignetto raises cattle and llamas on his land.A portion of his land is more suitable for raising cattle,and the other portion is better suited for raising llamas.Which of the graphs in Figure 2-3 represent his production possibilities frontier that displays increasing opportunity costs?

A)Graph A
B)Graph B
C)Graph C
D)either Graph A or Graph C
E)either Graph B or Graph C

Question 40

Figure 2-2 above shows the production possibilities frontier for Mendonca,an agrarian nation that produces two goods,meat and vegetables.

-Refer to Figure 2-2.If Mendonca chooses to produce 120 pounds of meat,how much vegetables can it produce to maximize production?

A)0 pounds of vegetables
B)60 pounds of vegetables
C)100 pounds of vegetables
D)160 pounds of vegetables

Question 41

Figure 2-4 shows various points on three different production possibilities frontiers for a nation.

-Refer to Figure 2-4.Consider the following events: a.a decrease in the unemployment rate
B.general technological advancement
C.an increase in consumer wealth
Which of the events listed above could cause a movement from V to W?

A)a only
B)a and b only
C)b and c only
D)a,b,and c

Question 42

Figure 2-4 shows various points on three different production possibilities frontiers for a nation.

-Refer to Figure 2-4.Consider the following events: a.an increase in the unemployment rate
B.a decrease in a nation's money supply
C.a war that kills a significant portion of a nation's population
Which of the events listed above could cause a movement from Y to W?

A)a,b,and c
B)a and b only
C)a and c only
D)a only
E)c only

Question 43

Figure 2-4 shows various points on three different production possibilities frontiers for a nation.

-Refer to Figure 2-4.Consider the following events: a.an increase in the patent protection period to 30 years
B.an increase of a nation's capital stock
C.an improved property rights system
Which of the events listed above could cause a movement from V to W?

A)a only
B)a and b only
C)a and c only
D)b and c only
E)a,b,and c

Question 44

Figure 2-4 shows various points on three different production possibilities frontiers for a nation.

-Refer to Figure 2-4.Consider the following events: a.an increase in the unemployment rate
B.general technological advancement
C.a decrease in consumer wealth
Which of the events listed above could cause a movement from X to V?

A)a only
B)a and b only
C)b and c only
D)a,b,and c

Question 45

Figure 2-4 shows various points on three different production possibilities frontiers for a nation.

-Refer to Figure 2-4.A movement from ________ is the result of advancements in plastic production technology.

A)V to X
B)W to X
C)Z to W
D)Y to Z

Question 46

Figure 2-4 shows various points on three different production possibilities frontiers for a nation.

-Refer to Figure 2-4.Consider the following movements: a.from point V to point W
B.from point W to point Y
C.from point Y to point Z
Which of the movements listed above represents advancements in technology with respect to only plastic production?

A)a,b,and c
B)b and c only
C)b only
D)c only

Question 47

Figure 2-4 shows various points on three different production possibilities frontiers for a nation.

-Refer to Figure 2-4.A movement from ________ is the result of negative technological change in plastic production.

A)V to X
B)X to W
C)W to Z
D)Z to Y

Question 48

Figure 2-4 shows various points on three different production possibilities frontiers for a nation.

-Refer to Figure 2-4.Consider the following events: a.a decrease in the unemployment rate
B.an increase in a nation's money supply
C.an influx of immigrant workers
Which of the events listed above could cause a movement from X to Z?

A)a,b,and c
B)a and b only
C)a and c only
D)a only
E)c only

Question 49

Figure 2-4 shows various points on three different production possibilities frontiers for a nation.

-Refer to Figure 2-4.A movement from ________ could occur because of an influx of immigrant labor.

A)W to V
B)X to W
C)W to Z
D)Y to W

Question 50

Figure 2-4 shows various points on three different production possibilities frontiers for a nation.

-Refer to Figure 2-4.Consider the following events: a.an increase in the unemployment rate
B.a decrease in a nation's money supply
C.a war that kills a significant portion of a nation's population
Which of the events listed above could cause a movement from Z to X?

A)a,b,and c
B)a and b only
C)a and c only
D)a only
E)c only

Question 51

Figure 2-4 shows various points on three different production possibilities frontiers for a nation.

-Refer to Figure 2-4.Consider the following movements: a.from point V to point W
B.from point W to point Y
C.from point Y to point Z
Which of the movements listed above represents economic growth?

A)a,b,and c
B)b and c only
C)a only
D)b only

Question 52

Figure 2-4 shows various points on three different production possibilities frontiers for a nation.

-Refer to Figure 2-4.A movement from X to Y

A)could be due to a change in consumers' tastes and preferences.
B)could occur because of an influx of immigrant labor.
C)is the result of advancements in food production technology only,with no change in the technology for plastic production.
D)is the result of advancements in plastic production technology only,with no change in food production technology.

Question 53

Without an increase in the supplies of factors of production,how can a nation achieve economic growth?

A)by producing more high-value goods and fewer low-value goods
B)through technological advancement which enables more output with the same quantity of resources
C)by lowering the prices of factors of production
D)by increasing the prices of factors of production

Question 54

Economic decline (negative growth)is represented on a production possibilities frontier model by the production possibility frontier

A)shifting outward.
B)shifting inward.
C)becoming steeper.
D)becoming flatter.

Question 55

Figure 2-4 shows various points on three different production possibilities frontiers for a nation.

-Refer to Figure 2-4.Consider the following movements: a.from point V to point W
B.from point W to point Y
C.from point Y to point Z
Which of the movements listed above represents advancements in technology with respect to both plastic production and food production?

A)a,b,and c
B)b and c only
C)b only
D)c only

Question 56

Figure 2-4 shows various points on three different production possibilities frontiers for a nation.

-Refer to Figure 2-4.A movement from ________ could occur because of an influx of immigrant labor.

A)X to W
B)X to Y
C)W to V
D)W to X

Question 57

An outward shift of a nation's production possibilities frontier represents

A)economic growth.
B)rising prices of the two goods on the production possibilities frontier model.
C)an impossible situation.
D)a situation in which a country produces more of one good and less of another.

Question 58

Which of the following would shift a nation's production possibilities frontier outward?

A)discovering a cheaper way to convert sunshine into electricity
B)an increase in demand for the nation's products
C)a decrease in the unemployment rate
D)a law requiring workers to retire at age 50

Question 59

Figure 2-4 shows various points on three different production possibilities frontiers for a nation.

-Refer to Figure 2-4.A movement from Y to Z

A)represents an increase in the demand for plastic products.
B)is the result of a decrease in preference for food products.
C)is the result of advancements in food production technology.
D)is the result of advancements in plastic production technology.

Question 60

Figure 2-4 shows various points on three different production possibilities frontiers for a nation.

-Refer to Figure 2-4.Consider the following events: a.a reduction in the patent protection period to no more than 2 years
B.a war that destroys a substantial portion of a nation's capital stock
C.the lack of a secure and enforceable property rights system
Which of the events listed above could cause a movement from W to V?

A)a only
B)a and b only
C)a and c only
D)b and c only
E)a,b,and c

Question 61

Figure 2-5
Refer to Figure 2-5.If the economy is currently producing at point Y,what is the opportunity cost of moving to point X?

A)5 million tons of steel
B)9 million tons of paper
C)5 million tons of paper
D)19 million tons of steel

Question 62

Figure 2-4 shows various points on three different production possibilities frontiers for a nation.

-Refer to Figure 2-4.A movement from ________ is the result of additional government restrictions on the pollution that results from plastic production.

A)X to V
B)X to W
C)Z to W
D)Z to Y

Question 63

Figure 2-4 shows various points on three different production possibilities frontiers for a nation.

-Refer to Figure 2-4.A movement from ________ could occur because of additional government restrictions toward allowing immigrant labor.

A)X to W
B)Y to X
C)V to W
D)W to X

Question 64

Figure 2-4 shows various points on three different production possibilities frontiers for a nation.

-Refer to Figure 2-4.Consider the following events: a.a reduction in the patent protection period to no more than 2 years
B.a war that destroys a substantial portion of a nation's capital stock
C.the lack of secure and enforceable property rights system
Which of the events listed above could cause a movement from W to V?

A)a only
B)a and b only
C)a and c only
D)b and c only
E)a,b,and c

Question 65

Figure 2-6
Refer to Figure 2-6.If the economy is currently producing at point C,what is the opportunity cost of moving to point B?

A)10 thousand wrenches
B)13 thousand hammers
C)30 thousand wrenches
D)23 thousand hammers

Question 66

Figure 2-5
Refer to Figure 2-5.If the economy is currently producing at point W,what is the opportunity cost of moving to point X?

A)3 million tons of steel
B)19 million tons of steel
C)5 million tons of paper
D)9 million tons of paper

Question 67

Suppose there is no unemployment in the economy and society decides that it wants more of one good.Which of the following statements is true?

A)It can only achieve this with an advance in technology.
B)It can increase output without giving up another good.
C)It can only achieve this with an increase in resource supplies.
D)It will have to give up production and consumption of some other good.

Question 68

Figure 2-5
Refer to Figure 2-5.If the economy is currently producing at point X,what is the opportunity cost of moving to point Y?

A)5 million tons of steel
B)9 million tons of paper
C)5 million tons of paper
D)14 million tons of steel

Question 69

Figure 2-4 shows various points on three different production possibilities frontiers for a nation.

-Refer to Figure 2-4.Consider the following events: a.a decrease in the unemployment rate
B.an increase in technology with respect to both food and plastic production
C.a war that kills a significant portion of a nation's population
Which of the events listed above could cause a movement from W to Y?

A)a,b,and c
B)a and b only
C)a and c only
D)b only
E)c only

Question 70

Figure 2-5
Refer to Figure 2-5.If the economy is currently producing at point X,what is the opportunity cost of moving to point W?

A)3 million tons of steel
B)19 million tons of steel
C)5 million tons of paper
D)9 million tons of paper

Question 71

If society decides it wants more of one good and all resources are fully utilized,then

A)it is unable to do this unless technology advances.
B)additional resource supplies will have to be found.
C)it has to give up some of another good and incur some opportunity costs.
D)more unemployment will occur.

Question 72

Figure 2-5
Refer to Figure 2-5.If the economy is currently producing at point W,what is the opportunity cost of moving to point Y?

A)2 million tons of steel
B)14 million tons of steel
C)2 million tons of paper
D)9 million tons of paper

Question 73

Figure 2-5
Refer to Figure 2-5.If the economy is currently producing at point Y,what is the opportunity cost of moving to point W?

A)2 million tons of steel
B)zero
C)9 million tons of paper
D)16 million tons of paper

Question 74

Figure 2-4 shows various points on three different production possibilities frontiers for a nation.

-Refer to Figure 2-4.Consider the following events: a.a decrease in the unemployment rate
B.general technological advancement
C.an increase in consumer wealth
Which of the events listed above could cause a movement from V to X?

A)a only
B)a and b only
C)b and c only
D)a,b,and c

Question 75

According to the production possibilities model,if more resources are allocated to the production of physical and human capital,then which of the following is likely to happen?

A)Fewer goods will be produced for consumption today.
B)The production possibilities frontier will shift inward in the future.
C)Future economic growth will decline.
D)The country's total production will fall.

Question 76

Figure 2-6
Refer to Figure 2-6.If the economy is currently producing at point A,what is the opportunity cost of moving to point B?

A)8 thousand wrenches
B)6 thousand hammers
C)30 thousand wrenches
D)23 thousand hammers

Question 77

Figure 2-4 shows various points on three different production possibilities frontiers for a nation.

-Refer to Figure 2-4.Consider the following events: a.an increase in the patent protection period to 75 years
B.a hurricane that destroys a substantial portion of a nation's capital stock
C.the implementation of a secure and enforceable property rights system
Which of the events listed above could cause a movement from W to Z?

A)a only
B)a and b only
C)a and c only
D)b and c only
E)a,b,and c

Question 78

The Great Depression of the 1930s,with a large number of workers and factories unemployed,would be represented in a production possibilities frontier graph by

A)a point inside the frontier.
B)a point outside the frontier.
C)a point on the frontier.
D)an intercept on either the vertical or the horizontal axis.

Question 79

Figure 2-4 shows various points on three different production possibilities frontiers for a nation.

-Refer to Figure 2-4.Consider the following movements: a.from point V to point W
B.from point W to point Y
C.from point Y to point Z
Which of the movements listed above represents advancements in technology with respect to only plastic production?

A)a,b,and c
B)b and c only
C)b only
D)c only

Question 80

Figure 2-4 shows various points on three different production possibilities frontiers for a nation.

-Refer to Figure 2-4.Consider the following events: a.an increase in the unemployment rate
B.general technological advancement
C.an increase in consumer wealth
Which of the events listed above could cause a movement from Z to V?

A)a only
B)a and b only
C)b and c only
D)a,b,and c