Chapter 2

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

0.50

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?

1

Refer to Exhibit 2-6. Which graph depicts the result of an increase in the number of illegal immigrants entering the country?

1

Refer to Exhibit 2-6. Which graph best depicts the consequence of a large-scale natural disaster?

2

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

2.00

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

20,000 units of guns

Refer to Exhibit 2-3. If PPF1 is the relevant production possibilities frontier, society may move to PPF2 as a result of

A and C an increase in resources and an increase in technology

Which of the following statements is true?

A and C. In a world of efficiently used scarce resources, more of one good necessarily means less of some other good and C. Efficiency implies that it is impossible to get more of one good without getting less of another.

Jose has one evening in which to prepare for two exams and can employ one of two possible strategies:

C. 11

Points that lie inside (or below) the PPF are

C. attainable but productive inefficient.

If Luke can bake bread at a lower opportunity cost than Jason, and Jason can produce paintings at a lower opportunity cost than Luke, it follows that

Luke has a comparative advantage in baking bread and Jason has a comparative advantage in producing paintings.

If increasingly more units of good Y must be given up as each successive unit of good X is produced, then the PPF for these two goods is

a downward-sloping curve that is bowed outward.

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

a productive efficient point to another productive efficient point

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

better suited for the production of some goods than others

Refer to Exhibit 2-8. If Maria and Maya each specialize in the good in which she has a comparative advantage and then engage in trade, ____________________ can consume a combination of goods that lies beyond her PPF.___________ unit(s) of good Y.

both Maria and Maya

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

more guns and more butter could be produced with available resources than are currently being produced

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

none of the above

Points that lie outside (or beyond) the PPF are

unattainable

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

1.00

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

1.00

Jose has one evening in which to prepare for two exams and can employ one of two possible strategies: Strategy Score in Economics Score in Statistics A 94 79 B 77 90

17

Consider two points on the PPF: point A, at which there are 10 apples and 20 pears, and point B, at which there are 7 apples and 21 pears. If the economy is currently at point A, the opportunity cost of moving to point B is

3 apples

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

4

Both country 1 and country 2 are located on their respective production possibilities frontiers (PPFs) for consumer goods and capital goods, but country 1 produces twice the output of both types of goods compared to country 2. It follows that

A. country 1's PPF lies further to the right than country 2's PPF.

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

Adam

Which of the following is an illustration of the law of increasing opportunity costs?

As more cars are produced, the opportunity cost of each additional car is greater than for the preceding unit

Through war, many of the factories in country 1 are destroyed and many of its people are killed. As a result, the country's

B. PPF after the war has probably shifted to the left compared to its PPF prior to the war.

Suppose the economy goes from a point on its production possibilities frontier (PPF) to a point below that PPF. Assuming that the PPF has not shifted, this could be due to

D and E a new law that interferes with economic efficiency and an increase in unemployment of some resources

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

Maya

What is the reason for the law of increasing opportunity costs?

Resources have varying abilities and those with lower opportunity costs of producing a good will be used to produce it before resources with higher opportunity costs produce it

A productive efficient society

all of the above

A society is productive inefficient when

all of the above

Refer to Exhibit 2-7. Point F is

all of the above

A PPF is a straight line as a result of

constant opportunity costs

A PPF is bowed outward as a result of

increasing opportunity costs

Productive inefficiency implies that

it is possible to obtain gains in one area without losses in another

An economy is productive efficient if it produces

maximum output with given resources and technology.

An increase in the quantity of resources available

shifts the PPF rightward.

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

zero televisions