Question 1

A test is scheduled for Monday morning, and you went to a party on Sunday night. If you hadn't attended the party, you could have studied for the test or gone to a movie. Which of the following is true regarding your opportunity cost?​

Accepted Answer

A)  The opportunity cost of going to the movie is studying for the test.
B)  The opportunity cost of going to the party is watching the movie.
C)  The opportunity cost of going to the party is both watching the movie and the study time.
D)  Because you could go to the party only that night, but could go to a movie any time, the opportunity cost of the party is the study time.
E)  From the above information, it's not possible to determine the opportunity cost of attending the party.F) B) and C)
G) C) and D)

Question 2

At all points along the production possibilities frontier, _____.​

Accepted Answer

A)  the greatest achievable output levels are illustrated
B)  resources are not fully employed
C)  more of one good can be obtained without giving up more of the other
D)  more efficient output levels are possible
E)  society is equally well offF) B) and C)
G) A) and B)

Question 3

Points inside the production possibilities frontier represent:​

Accepted Answer

A)  full and efficient use of all resources.
B)  inefficiency or unemployment.
C)  currently unattainable combinations of outputs.
D)  currently unattainable combinations of resources.
E)  the most desirable combinations of outputs.F) B) and C)
G) A) and E)

Question 4

The opportunity cost of going to college consists of more than just the tuition that will be paid.​

Accepted Answer

A) True 
 B)False

Question 5

A downward-sloping straight-line production possibilities frontier indicates:​

Accepted Answer

A)  that society cannot decide which good it prefers.
B)  an absence of scarcity.
C)  constant opportunity cost.
D)  inefficiency.
E)  specialization.F) C) and D)
G) A) and C)

Question 6

​The figure given below shows the production possibilities frontier for mufflers and socks. The opportunity cost of moving from point b to d is: ​
Figure 2.4

Accepted Answer

A)  30 mufflers.
B)  50 mufflers.
C)  100 socks.
D)  150 socks.
E)  250 socks.F) C) and E)
G) A) and B)

Question 7

The following figure shows the production possibilities frontier for Good A and Good B. In the figure below, point e represents:​ ​
Figure 2.2

Accepted Answer

A)  an attainable combination of Good A and Good B.
B)  an unattainable combination of Good A and Good B.
C)  the combination of Good A and Good B that the economy will produce.
D)  one possible efficient combination of Good A and Good B.
E)  the only unattainable combination of Good A and Good B.F) B) and E)
G) A) and C)

Question 8

Each point on a production possibilities frontier requires full employment of resources.​

Accepted Answer

A) True 
 B)False

Question 9

In one week, Mohammed can knit 5 sweaters or bake 240 cookies. In one week, Aisha can knit 15 sweaters or bake 480 cookies. Aisha's opportunity cost of knitting one sweater is:​

Accepted Answer

A)  240 cookies.
B)  480 cookies.
C)  32 cookies.
D)  1/32 of a cookie.
E)  16 cookies.F) A) and E)
G) B) and C)

Question 10

In a command economy, _____.​

Accepted Answer

A)  a dictator makes every economic decision
B)  owners can sell their resources to the highest bidder
C)  no individual or group coordinates the economy
D)  in theory, individual choices are reflected in collective decisions and decisions are made by central planners.
E)  public ownership of resources is combined with free markets to direct economic activityF) A) and E)
G) C) and D)

Question 11

On a bowed-out production possibilities frontier showing possible output levels of Good A and good B, the opportunity cost of producing the first 10 units of Good A will usually be:​

Accepted Answer

A)  the same as the opportunity cost of producing the next 10 units of Good A.
B)  lower than the opportunity cost of producing the next 10 units of Good A.
C)  greater than the opportunity cost of making the next 10 units of Good A.
D)  10 units of Good A.
E)  10 units of Good B.F) C) and E)
G) B) and C)

Question 12

Suppose you have an hour before your next class starts. You can either read a book, get something to eat, or take a nap. The opportunity cost of getting something to eat is:​

Accepted Answer

A)  the cost of what you eat.
B)  the value of reading and sleeping.
C)  the loss of value from not reading or sleeping.
D)  the net benefit of sleeping for another hour.
E)  impossible to determine because the most preferred alternative is not known.F) B) and E)
G) C) and D)

Question 13

Which of the following would shift the production possibilities frontier outward?​

Accepted Answer

A)  An increase in the size of the labor force
B)  More efficient use of existing resources and technology
C)  The government prints more money
D)  The end of a strike by a labor union
E)  Society's desire to produce more of one of the goodsF) A) and C)
G) A) and B)

Question 14

The production possibilities frontier represents all desirable combinations of outputs.​

Accepted Answer

A) True 
 B)False

Question 15

The law of comparative advantage states that the person who should produce a good is the person who:​

Accepted Answer

A)  has the lowest opportunity cost of producing that good.
B)  can produce that good using the fewest resources.
C)  will produce that good using the most expensive resources.
D)  has the most desire for that good.
E)  has produced that good in the past.F) A) and C)
G) C) and D)

Question 16

The figure given below shows the production possibilities frontier for mufflers and socks. If society moves from point c to point d, then society:​ ​
Figure 2.4

Accepted Answer

A)  gains 100 socks.
B)  loses 30 mufflers.
C)  is worse off after the change in production.
D)  is not operating efficiently.
E)  experiences some unemployment of resources.F) C) and E)
G) B) and D)

Question 17

An improvement in technology:​

Accepted Answer

A)  will always result in a parallel shift of the production possibilities frontier.
B)  will never result in a parallel shift of the production possibilities frontier.
C)  will be indicated as a movement along the production possibilities frontier.
D)  will shift the production possibilities frontier outward but not necessarily to a parallel position.
E)  may not shift the production possibilities frontier.F) C) and E)
G) B) and C)

Question 18

A production possibilities frontier can shift outward for all of the following reasons except:​

Accepted Answer

A)  a decrease in the size of the labor force.
B)  an increase in the skills of the labor force.
C)  an improvement in technology.
D)  a larger work force.
E)  a larger capital stock.F) A) and B)
G) A) and C)

Question 19

On a given production possibilities frontier, which of the following is not assumed to be fixed?​

Accepted Answer

A)  The amount of labor available
B)  The amount of capital available
C)  The level of technology
D)  The amount of land and natural resources available
E)  Production of each itemF) B) and E)
G) A) and C)

Question 20

The figure below shows the production possibilities frontier for education and food production. Which of the following would cause the production possibilities frontier to shift from AA to BA?​ ​
Figure 2.6

Accepted Answer

A)  A drought that affected food production but had no effect on education.
B)  A technological improvement in education that had no effect on food production.
C)  A technological improvement in food production that had no effect on education.
D)  A disease that affected students' ability to learn (and therefore education)  but not food production.
E)  An increase in the size of the labor force that affected both food production and education.F) A) and B)
G) B) and C)

Exam 2: Economic Tools and Economic Systems

The following figure shows the production possibilities frontier for Good A and Good B. In the figure below, point e represents:​ ​ Figure 2.2

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The law of comparative advantage states that the person who should produce a good is the person who:​

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An improvement in technology:​

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A production possibilities frontier can shift outward for all of the following reasons except:​

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In one week, Mohammed can knit 5 sweaters or bake 240 cookies. In one week, Aisha can knit 15 sweaters or bake 480 cookies. Aisha's opportunity cost of knitting one sweater is:​

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At all points along the production possibilities frontier, _____.​

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In a command economy, _____.​

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The production possibilities frontier represents all desirable combinations of outputs.​

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Which of the following would shift the production possibilities frontier outward?​

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A test is scheduled for Monday morning, and you went to a party on Sunday night. If you hadn't attended the party, you could have studied for the test or gone to a movie. Which of the following is true regarding your opportunity cost?​

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The figure below shows the production possibilities frontier for education and food production. Which of the following would cause the production possibilities frontier to shift from AA to BA?​ ​ Figure 2.6

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​The figure given below shows the production possibilities frontier for mufflers and socks. The opportunity cost of moving from point b to d is: ​ Figure 2.4

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Suppose you have an hour before your next class starts. You can either read a book, get something to eat, or take a nap. The opportunity cost of getting something to eat is:​

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Points inside the production possibilities frontier represent:​

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A downward-sloping straight-line production possibilities frontier indicates:​

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The figure given below shows the production possibilities frontier for mufflers and socks. If society moves from point c to point d, then society:​ ​ Figure 2.4

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Each point on a production possibilities frontier requires full employment of resources.​

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The opportunity cost of going to college consists of more than just the tuition that will be paid.​

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On a bowed-out production possibilities frontier showing possible output levels of Good A and good B, the opportunity cost of producing the first 10 units of Good A will usually be:​

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On a given production possibilities frontier, which of the following is not assumed to be fixed?​

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The following figure shows the production possibilities frontier for Good A and Good B. In the figure below, point e represents: Figure 2.2

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The law of comparative advantage states that the person who should produce a good is the person who:

Correct Answer
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An improvement in technology:

Correct Answer
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A production possibilities frontier can shift outward for all of the following reasons except:

Correct Answer
verified

In one week, Mohammed can knit 5 sweaters or bake 240 cookies. In one week, Aisha can knit 15 sweaters or bake 480 cookies. Aisha's opportunity cost of knitting one sweater is:

Correct Answer
verified

At all points along the production possibilities frontier, _____.

Correct Answer
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In a command economy, _____.

Correct Answer
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The production possibilities frontier represents all desirable combinations of outputs.

Correct Answer
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Which of the following would shift the production possibilities frontier outward?

Correct Answer
verified

A test is scheduled for Monday morning, and you went to a party on Sunday night. If you hadn't attended the party, you could have studied for the test or gone to a movie. Which of the following is true regarding your opportunity cost?

Correct Answer
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The figure below shows the production possibilities frontier for education and food production. Which of the following would cause the production possibilities frontier to shift from AA to BA? Figure 2.6

Correct Answer
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The figure given below shows the production possibilities frontier for mufflers and socks. The opportunity cost of moving from point b to d is: Figure 2.4

Correct Answer
verified

Suppose you have an hour before your next class starts. You can either read a book, get something to eat, or take a nap. The opportunity cost of getting something to eat is:

Correct Answer
verified

Points inside the production possibilities frontier represent:

Correct Answer
verified

A downward-sloping straight-line production possibilities frontier indicates:

Correct Answer
verified

The figure given below shows the production possibilities frontier for mufflers and socks. If society moves from point c to point d, then society: Figure 2.4

Correct Answer
verified

Each point on a production possibilities frontier requires full employment of resources.

Correct Answer
verified

The opportunity cost of going to college consists of more than just the tuition that will be paid.

Correct Answer
verified

On a bowed-out production possibilities frontier showing possible output levels of Good A and good B, the opportunity cost of producing the first 10 units of Good A will usually be:

Correct Answer
verified

On a given production possibilities frontier, which of the following is not assumed to be fixed?

Correct Answer
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