Question 1

If an economy is operating on its production possibilities frontier (PPF) ,are there any unemployed resources in the economy?

Accepted Answer

A)   Yes, because if there weren't any unemployed resources the economy would be producing beyond its PPF.
B)   No, because if there were any unemployed resources the economy would be producing below its PPF.
C)   It depends on whether the economy's PPF is a concave (downward-sloping)  curve or a straight line.
D)   Yes, because there are always some natural resources that are unemployed.
E)   The answer is "yes," but not for any of the reasons specified in answers a through d.F) A) and D)
G) A) and E)

Question 2

Exhibit 2-3
 
-Refer to Exhibit 2-3.If PPF? is the relevant production possibilities frontier,PPF? may depict

Accepted Answer

A)   economic growth.
B)   an increase in resources.
C)   an increase in technology.
D)   both b and c
E)   all of the aboveF) A) and B)
G) B) and E)

Question 3

Exhibit 2-9
 
-Refer to Exhibit 2-9.Who has the comparative advantage in the production of good A?

Accepted Answer

A)   Alex
B)   Adam
C)   Both Alex and Adam
D)   Neither Alex nor AdamE) C) and D)
F) A) and D)

Question 4

Exhibit 2-1
 
-Refer to Exhibit 2-1.A movement from point B to point D

Accepted Answer

A)   could only happen through economic growth.
B)   is necessarily a movement from a productive efficient point to a productive inefficient point.
C)   is a movement from a productive efficient point to another productive efficient point.
D)   is necessarily a movement from a productive inefficient point to another productive inefficient point.E) A) and C)
F) A) and B)

Question 5

If the law of increasing opportunity costs is operable,and currently the opportunity cost of producing the 1,000th unit of good X is 0.5Y,then the opportunity cost of producing the 2,001st unit of good is X is most likely to be

Accepted Answer

A)   less than 0.5Y.
B)   more than 0.5Y but less than 2Y.
C)   more than 0.5Y
D)   less than 0.5Y but more than zero.
E)   none of the aboveF) A) and D)
G) A) and E)

Question 6

Exhibit 2-2
 
-Refer to Exhibit 2-2.If PPF? 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 dF) All of the above
G) A) and B)

Question 7

The PPF between goods X and Y will be a downward-sloping

Accepted Answer

A)   straight line if increasing opportunity costs exist.
B)   straight line if decreasing opportunity costs exist.
C)   curve that is bowed inward if increasing opportunity costs exist.
D)   straight line if constant opportunity costs exist.E) A) and B)
F) All of the above

Question 8

Exhibit 2-5
 
-Refer to Exhibit 2-5.The opportunity cost of moving from point C to point B is

Accepted Answer

A)   15,000 televisions.
B)   15,000 fax machines.
C)   10,000 televisions.
D)   20,000 fax machines.E) All of the above
F) B) and C)

Question 9

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)   a new law that interferes with productive efficiency.E) C) and D)
F) A) and B)

Question 10

An economy can produce either of these two combinations of goods X and Y: 1,000X and 0Y or 400Y and 0X.Furthermore,the opportunity cost between the two goods is always constant.Which of the following combinations of the two goods,X and Y,is it possible for the economy to produce?

Accepted Answer

A)   700X, 280Y
B)   600X, 250Y
C)   400X, 150Y
D)   100X, 600Y
E)   300X, 280YF) A) and E)
G) All of the above

Question 11

The point where the PPF intersects the vertical axis is

Accepted Answer

A)   unattainable.
B)   attainable and productive efficient.
C)   attainable but productive inefficient.
D)   attainable and neither productive efficient nor productive inefficient.E) C) and D)
F) A) and D)

Question 12

The PPF between goods X and Y will be a downward-sloping

Accepted Answer

A)   straight line if increasing opportunity costs exist.
B)   straight line if decreasing opportunity costs exist.
C)   curve that is bowed outward if increasing opportunity costs exist.
D)   curve that is bowed outward if constant opportunity costs exist.E) All of the above
F) A) and B)

Question 13

With a constant opportunity cost between goods A and B,the PPF for goods A and B would

Accepted Answer

A)   be a straight line.
B)   be a bowed-outward line.
C)   be a bowed-inward line.
D)   not exist.E) A) and C)
F) C) and D)

Question 14

A PPF can

Accepted Answer

A)   shift outward but not inward.
B)   shift inward but not outward.
C)   shift inward or outward.
D)   shift neither inward nor outward.E) None of the above
F) B) and D)

Question 15

Exhibit 2-1
 
-Refer to Exhibit 2-1.The movement from point A to point B is a movement from

Accepted Answer

A)   a productive efficient point to a productive inefficient point.
B)   a point with more guns and less butter to a point with more butter and even more guns.
C)   a productive efficient point to another productive efficient point.
D)   a productive inefficient point to a productive efficient point.E) A) and D)
F) None of the above

Question 16

A productive efficient society

Accepted Answer

A)   produces at a point on its PPF.
B)   can produce more of one good only by giving up some of another good.
C)   cannot produce unlimited amounts of a good.
D)   still has to make choices.
E)   all of the aboveF) C) and E)
G) C) and D)

Question 17

Exhibit 2-6
 
-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 aboveF) A) and D)
G) None of the above

Question 18

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

Accepted Answer

A)   3.00
B)   0.33
C)   0.75
D)   1.33E) A) and D)
F) A) and C)

Question 19

Exhibit 2-2
 
-Refer to Exhibit 2-2.If PPF? is the relevant production possibilities frontier,then point __________ is unattainable.

Accepted Answer

A)   A
B)   G
C)   D
D)   JE) A) and D)
F) B) and C)

Question 20

Which of the following statements is true?

Accepted Answer

A)   The concept of opportunity costs cannot be illustrated within a PPF framework.
B)   If scarcity did not exist, neither would a PPF.
C)   All PPFs are downward-sloping straight lines.
D)   There are more attainable points than unattainable points in every PPF diagram.E) None of the above
F) A) and B)

Exam 2: Production Possibilities Frontier Framework

The PPF between goods X and Y will be a downward-sloping

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Exhibit 2-2 -Refer to Exhibit 2-2.If PPF? is the relevant production possibilities frontier,then point __________ is unattainable.

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With a constant opportunity cost between goods A and B,the PPF for goods A and B would

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Exhibit 2-3 -Refer to Exhibit 2-3.If PPF? is the relevant production possibilities frontier,PPF? may depict

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

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Exhibit 2-9 -Refer to Exhibit 2-9.Who has the comparative advantage in the production of good A?

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Which of the following statements is true?

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Exhibit 2-1 -Refer to Exhibit 2-1.The movement from point A to point B is a movement from

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Exhibit 2-1 -Refer to Exhibit 2-1.A movement from point B to point D

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A productive efficient society

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If the law of increasing opportunity costs is operable,and currently the opportunity cost of producing the 1,000th unit of good X is 0.5Y,then the opportunity cost of producing the 2,001st unit of good is X is most likely to be

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An economy can produce either of these two combinations of goods X and Y: 1,000X and 0Y or 400Y and 0X.Furthermore,the opportunity cost between the two goods is always constant.Which of the following combinations of the two goods,X and Y,is it possible for the economy to produce?

Correct AnswerverifiedShow Answer

The PPF between goods X and Y will be a downward-sloping

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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

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A PPF can

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

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

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Exhibit 2-5 -Refer to Exhibit 2-5.The opportunity cost of moving from point C to point B is

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If an economy is operating on its production possibilities frontier (PPF) ,are there any unemployed resources in the economy?

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The point where the PPF intersects the vertical axis is

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