Question 1

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,280Y

Question 2

A person has a comparative advantage in the production of a good when they can produce the product at a(n) ________ opportunity cost compared to another person.

Accepted Answer

A)   higher
B)   increasing
C)   lower
D)   equal

Question 3

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.

Question 4

Productive efficiency implies that more of one good can not be produced without a loss of production of the other good.

Accepted Answer

A) True 
 B)False

Question 5

The law of increasing opportunity cost helps to explain why PPF's are typically bowed-outward.

Accepted Answer

A) True 
 B)False

Question 6

Explain how a technological advancement in one sector of the economy can lead to a change in the number of people who work in another sector of the economy.Give an example to help support your answer.

Accepted Answer

A technological advancement in one secto...

Question 7

Exhibit 2-3 1 is the relevant production possibilities frontier,PPF2 may depict A)  economic growth. B)  an increase in resources. C)  an increase in technology. D)  both b and c E)  all of the above" class="answers-bank-image d-inline" rel="preload" >
-Refer to Exhibit 2-3.If PPF1 is the relevant production possibilities frontier,PPF2 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 above

Question 8

Exhibit 2-4 
-Refer to Exhibit 2-4.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.

Question 9

Why is the production possibilities frontier (PPF)typically bowed-outward? Under what circumstances would the PPF be a straight line?

Accepted Answer

The PPF is typically bowed-outward due t...

Question 10

Exhibit 2-2 2 is the relevant production possibilities frontier,then point __________ is productive efficient. A)  B B)  D C)  I D)  F E)  both b and d" class="answers-bank-image d-inline" rel="preload" >
-Refer to Exhibit 2-2.If PPF2 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 d

Question 11

Exhibit 2-1 
-Refer to Exhibit 2-1.The opportunity cost of moving from point B to A is

Accepted Answer

A)   10,000 units of butter.
B)   20,000 units of butter.
C)   50,000 units of guns.
D)   the maximum amount of butter that can be produced with available resources.

Question 12

The economy is currently on its production possibilities frontier (PPF) .A politician says that it is possible to get more of everything---more infrastructure,more schools,more national defense,more spending on social programs,and so on.The politician is

Accepted Answer

A)   correct if he is assuming a rightward-shifting PPF.
B)   incorrect if he is assuming a rightward-shifting PPF.
C)   incorrect if he is assuming a PPF that does not change.
D)   correct if he is assuming a PPF that does not change.
E)   a and c

Question 13

A PPF is a straight line as a result of

Accepted Answer

A)   constant opportunity costs.
B)   increasing opportunity costs.
C)   decreasing opportunity costs.
D)   scarcity.
E)   choice.

Question 14

Exhibit 2-8
 
-Refer to Exhibit 2-8.Who has the comparative advantage in the production of good Y?

Accepted Answer

A)   Maria
B)   Maya
C)   Both Maria and Maya
D)   Neither Maria nor Maya

Question 15

If the economy is on the production possibilities frontier (PPF) ,the economy is

Accepted Answer

A)   productive inefficient.
B)   operating with no unemployed resources.
C)   productive efficient.
D)   b and c
E)   none of the above

Question 16

Exhibit 2-1 
-Refer to Exhibit 2-1.If the economy is at point C,it follows that

Accepted Answer

A)   more guns and more butter could be produced with available resources than are currently being produced.
B)   only more guns could be produced with available resources than are currently being produced.
C)   only more butter can be produced with available resources than are currently being produced.
D)   C is an unattainable point.

Question 17

A society is productive inefficient when

Accepted Answer

A)   it produces at a point inside or below its PPF.
B)   it does not produce the maximum output with its given resources and technology.
C)   it can produce more of one good without giving up some of another good.
D)   both a and b
E)   all of the above

Question 18

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

Accepted Answer

A)   (1) 
B)   (2) 
C)   (3) 
D)   (4) 
E)   none of the above

Question 19

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.

Question 20

A PPF is bowed outward as a result of

Accepted Answer

A)   constant opportunity costs.
B)   increasing opportunity costs.
C)   decreasing opportunity costs.
D)   scarcity.
E)   choice.

Exam 2: Production Possibilities Frontier Framework

Exhibit 2-1 -Refer to Exhibit 2-1.If the economy is at point C,it follows that

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Exhibit 2-2 -Refer to Exhibit 2-2.If PPF2 is the relevant production possibilities frontier,then point __________ is productive efficient.

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The law of increasing opportunity cost helps to explain why PPF's are typically bowed-outward.

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Explain how a technological advancement in one sector of the economy can lead to a change in the number of people who work in another sector of the economy.Give an example to help support your answer.

Correct AnswerverifiedA technological advancement in one secto...View AnswerShow Answer

Exhibit 2-1 -Refer to Exhibit 2-1.The opportunity cost of moving from point B to A is

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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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The economy is currently on its production possibilities frontier (PPF) .A politician says that it is possible to get more of everything---more infrastructure,more schools,more national defense,more spending on social programs,and so on.The politician is

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Exhibit 2-8 -Refer to Exhibit 2-8.Who has the comparative advantage in the production of good Y?

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A PPF is bowed outward as a result of

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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

Exhibit 2-4 -Refer to Exhibit 2-4.As more fax machines are produced,the opportunity cost of producing them

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A society is productive inefficient when

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If the economy is on the production possibilities frontier (PPF) ,the economy is

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A person has a comparative advantage in the production of a good when they can produce the product at a(n) ________ opportunity cost compared to another person.

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Productive efficiency implies that more of one good can not be produced without a loss of production of the other good.

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Why is the production possibilities frontier (PPF)typically bowed-outward? Under what circumstances would the PPF be a straight line?

Correct AnswerverifiedThe PPF is typically bowed-outward due t...View AnswerShow Answer

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

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A PPF is a straight line as a result of

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Exhibit 2-3 -Refer to Exhibit 2-3.If PPF1 is the relevant production possibilities frontier,PPF2 may depict

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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 PPF₂ is the relevant production possibilities frontier,then point __________ is productive efficient.

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A technological advancement in one secto...
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The PPF is typically bowed-outward due t...
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Exhibit 2-3 -Refer to Exhibit 2-3.If PPF₁ is the relevant production possibilities frontier,PPF₂ may depict

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