Question 1

The economy can produce 15X and 15Y,10X and 20Y,5X and 25Y,or 0X and 30Y.It follows that opportunity cost of 1X is ___Y.

Accepted Answer

A)   4.0
B)   5.0
C)   2.5
D)   1.0
E)   none of the aboveF) All of the above
G) D) and E)

Question 2

Exhibit 2-5 
-Refer to Exhibit 2-5.The economy is currently operating at point F.The opportunity cost of moving to point E is approximately

Accepted Answer

A)   35 fax machines.
B)   55 fax machines.
C)   zero fax machines.
D)   40 fax machines.E) A) and B)
F) A) and D)

Question 3

If there is always a three-for-one tradeoff between goods X and Y,then the PPF between X and Y is

Accepted Answer

A)   a downward-sloping curve that is bowed outward.
B)   a downward-sloping curve that is bowed inward.
C)   a downward-sloping straight line.
D)   an upward-sloping straight line.E) None of the above
F) All of the above

Question 4

Exhibit 2-6 
-Refer to Exhibit 2-6.Which graph depicts a discovery of a new cheap source of energy that assists in the production of both good X and good Y?

Accepted Answer

A)   (1) 
B)   (2) 
C)   (3) 
D)   (4) 
E)   none of the aboveF) D) and E)
G) A) and B)

Question 5

If there is always a 4-for-1 tradeoff between producing good X and good Y,it follows that the opportunity cost of X (in terms of Y) ____________________ and the PPF for these two goods is ______________________.

Accepted Answer

A)   decreases at low levels of X;a straight line
B)   rises at high levels of Y;bowed-outward
C)   decreases at high levels of X;bowed-outward
D)   is always the same;a straight lineE) All of the above
F) B) and D)

Question 6

If an economy can produce a maximum of 10 units of good X and the opportunity cost of 1X is always 2Y,then what is the maximum units of good Y the economy can produce?

Accepted Answer

A)   5
B)   200
C)   20
D)   500
E)   none of the aboveF) None of the above
G) B) and E)

Question 7

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) C) and D)
F) B) and D)

Question 8

If an economy can produce a maximum of 100 units of good X and the opportunity cost of 1X is always 5Y,then what is the maximum number of units of good Y the economy can produce?

Accepted Answer

A)   250
B)   100
C)   20
D)   500
E)   none of the aboveF) A) and C)
G) A) and B)

Question 9

Exhibit 2-5 
-Refer to Exhibit 2-5.As more fax machines are produced,the opportunity cost of producing them

Accepted Answer

A)   increases.
B)   decreases.
C)   remains constant.
D)   first decreases and then increases.E) All of the above
F) A) and B)

Question 10

Exhibit 2-8
 
-Refer to Exhibit 2-8.For Maria,the opportunity cost of producing one unit of good X is ___________ unit(s) of good Y.

Accepted Answer

A)   2.00
B)   1.00
C)   10.00
D)   0.50E) A) and B)
F) A) and C)

Question 11

Exhibit 2-6 
-Refer to Exhibit 2-6.Which graph depicts the result of a decrease in the unemployment rate?

Accepted Answer

A)   (1) 
B)   (2) 
C)   (3) 
D)   (4) 
E)   none of the aboveF) A) and C)
G) A) and B)

Question 12

Country 1 produces two goods,A and B.Country 2 produces the same two goods.Currently,country 1 produces 100A and 200B and country 2 produces 300A and 700B.Which of the following statements is true?

Accepted Answer

A)   If country 1 is on its production possibilities frontier,then country 2 must be on its PPF,too.
B)   The PPF for country 1 is necessarily closer to the origin (or further to the left) than the PPF for country 2.
C)   If country 1 is productive inefficient,then so is country 2.
D)   Country 2 is operating on its PPF,but country 1 is clearly not operating on its PPF.
E)   none of the aboveF) C) and D)
G) None of the above

Question 13

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) None of the above
F) B) and C)

Question 14

Exhibit 2-8
 
-Refer to Exhibit 2-8.For Maria,the opportunity cost of producing one unit of good Y is ___________ unit(s) of good X.

Accepted Answer

A)   2.00
B)   1.00
C)   10.00
D)   0.50E) B) and D)
F) A) and B)

Question 15

Exhibit 2-6 
-Refer to Exhibit 2-6.Which graph depicts the result of an increase in the unemployment rate?

Accepted Answer

A)   (1) 
B)   (2) 
C)   (3) 
D)   (4) 
E)   none of the aboveF) C) and D)
G) B) and E)

Question 16

A PPF is more likely to be a downward-sloping curve that is bowed outward than a downward-sloping straight line because most resources are

Accepted Answer

A)   better suited for the production of some goods than others.
B)   used efficiently.
C)   relatively cheap at low levels of output.
D)   used to produce consumption goods.E) All of the above
F) B) and C)

Question 17

Exhibit 2-5 
-Refer to Exhibit 2-5.Which of the following labeled points are productive efficient?

Accepted Answer

A)   A,B,C,D,and E
B)   B,C and D only
C)   C only
D)   All of the points are productive efficient.
E)   None of the points are productive efficient.F) All of the above
G) C) and E)

Question 18

Exhibit 2-1 
-Refer to Exhibit 2-1.The PPF illustrates

Accepted Answer

A)   constant opportunity costs between guns and butter.
B)   that guns are more important than butter.
C)   increasing opportunity costs between guns and butter.
D)   the opportunity cost of one unit of guns is four units of butter.
E)   none of the aboveF) A) and D)
G) B) and D)

Question 19

Productive efficiency implies that

Accepted Answer

A)   all consumers' wants are satisfied.
B)   no advance in technology will occur in the future.
C)   the attainable region is greater than the unattainable region.
D)   gains are impossible in one area without losses in another.
E)   all of the aboveF) B) and D)
G) A) and E)

Question 20

Exhibit 2-6 
-Refer to Exhibit 2-6.Which graph depicts society's choice to produce more of good X and less of good Y?

Accepted Answer

A)   (1) 
B)   (2) 
C)   (3) 
D)   (4) 
E)   none of the aboveF) A) and C)
G) B) and E)

Exam 2: Production Possibilities Frontier Framework

Exhibit 2-6 -Refer to Exhibit 2-6.Which graph depicts a discovery of a new cheap source of energy that assists in the production of both good X and good Y?

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Exhibit 2-5 -Refer to Exhibit 2-5.Which of the following labeled points are productive efficient?

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Productive efficiency implies that

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Exhibit 2-5 -Refer to Exhibit 2-5.The economy is currently operating at point F.The opportunity cost of moving to point E is approximately

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If an economy can produce a maximum of 10 units of good X and the opportunity cost of 1X is always 2Y,then what is the maximum units of good Y the economy can produce?

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A PPF is more likely to be a downward-sloping curve that is bowed outward than a downward-sloping straight line because most resources are

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Exhibit 2-5 -Refer to Exhibit 2-5.As more fax machines are produced,the opportunity cost of producing them

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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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Exhibit 2-6 -Refer to Exhibit 2-6.Which graph depicts the result of an increase in the unemployment rate?

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The economy can produce 15X and 15Y,10X and 20Y,5X and 25Y,or 0X and 30Y.It follows that opportunity cost of 1X is ___Y.

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Exhibit 2-6 -Refer to Exhibit 2-6.Which graph depicts the result of a decrease in the unemployment rate?

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Exhibit 2-8 -Refer to Exhibit 2-8.For Maria,the opportunity cost of producing one unit of good Y is ___________ unit(s) of good X.

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If there is always a 4-for-1 tradeoff between producing good X and good Y,it follows that the opportunity cost of X (in terms of Y) ____________________ and the PPF for these two goods is ______________________.

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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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Exhibit 2-6 -Refer to Exhibit 2-6.Which graph depicts society's choice to produce more of good X and less of good Y?

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Country 1 produces two goods,A and B.Country 2 produces the same two goods.Currently,country 1 produces 100A and 200B and country 2 produces 300A and 700B.Which of the following statements is true?

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Exhibit 2-1 -Refer to Exhibit 2-1.The PPF illustrates

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If an economy can produce a maximum of 100 units of good X and the opportunity cost of 1X is always 5Y,then what is the maximum number of units of good Y the economy can produce?

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Exhibit 2-8 -Refer to Exhibit 2-8.For Maria,the opportunity cost of producing one unit of good X is ___________ unit(s) of good Y.

Correct AnswerverifiedShow Answer

If there is always a three-for-one tradeoff between goods X and Y,then the PPF between X and Y is

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If there is always a 4-for-1 tradeoff between producing good X and good Y,it follows that the opportunity cost of X (in terms of Y) and the PPF for these two goods is __.

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