Homework #2 Micro-Economics

Figure 2-6. The opportunity cost of this economy moving from point I to point H is...

120 blankets

Any point on a country's production possibilities frontier represents a combination of two goods that an economy...

can produce using all available resources and technology

When a production possibilities frontier is bowed outward, the opportunity cost of producing an additional unit of a good...

increases as more of the good is produced

An economy's production of two goods is efficient if

it is impossible to produce more of one good without producing less of the other

Figure 2-6. The opportunity cost of this economy moving from point K to point H is...

zero

What is the opportunity cost to Picnicland of increasing the production of hotdogs from 450 to 900?

225 burgers

Figure 2-7 . If this economy devotes all of its resources to the production of engines, then it will produce...

40 engines and 0 tvs

Which of the the following is a correct statement about production possibilities frontiers?

An economy can produce at any point on or inside the production possibilities frontier, but not outside the frontier

Figure 2-4. This economy cannot produce at which point(s)?

Q, S

Figure 2-4. This economy has the ability to produce at which point(s)?

R, T, U

Figure 2-4. Efficient production is presented by which point(s)?

R, U

Figure 2-4. Inefficient production is represented by which point(s)?

T

Figure 2-6. If the economy moves from point H to point G, then which of the following statements is correct?

This economy has experienced economic growth

Which of the following is an example of a capital input?

a computer

In economics, capital refers to

buildings and machines used in the production process

In the circular-flow diagram,...

income payments flow from firms to households, and sales revenue flows from households to firms

In the circular-flow diagram, in the markets for...

goods and services, households are buyers and firms are sellers

Which of the following is not a factor of production?

money

Production is efficient if the economy is producing at a point...

on the production possibilities frontier

The production possibilities frontier provides an illustration of the principle that

people face trade-offs

Figure 2-9 Panel (a). Production at point K is...

possible by inefficient

A production possibilities frontier shifts outward when...

the economy experiences economic growth

In the circular-flow diagram in the markets for...

the factors of production, households are sellers and firms are buyers

Factors of production are

used to produce goods and services