Economics Chapter 2 Quiz

No, because if there were any unemployed resources the economy would be producing below its PPF.

If an economy is operating on its production possibilities frontier (PPF), are there any unemployed resources in the economy? Yes, because if there weren't any unemployed resources the economy would be producing beyond its PPF. No, because if there were any unemployed resources the economy would be producing below its PPF. It depends on whether the economy's PPF is a concave (downward-sloping) curve or a straight line. Yes, because there are always some natural resources that are unemployed The answer is "yes," but not for any of the reasons specified in answers a through d.

bowed outward.

If resources are better suited toward the production of one good than toward the other good, then the PPF for those two goods is a straight line. bowed outward. upward sloping. any of the above

unattainable.

Points outside (or beyond) the PPF are attainable. unattainable. efficient. inefficient.

the impossibility of gains in one area without losses in another.

Productive efficiency implies the possibility of gains in one area without losses in another. that more output has been produced. the impossibility of gains in one area without losses in another. that prices are stable.

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

Productive efficiency implies that it is impossible to obtain gains in one area without losses in another. it is possible to obtain gains in one area without losses in another. there are too many resources. there are too few resources. none of the above

none of the above

When an economy is not using all of its resources, it is producing at a point below its production possibilities frontier. If country 1 is on its production possibilities frontier, then country 2 must be on its PPF, too. The PPF for country 1 is necessarily closer to the origin (or further to the left) than the PPF for country 2. If country 1 is productive inefficient, then so is country 2. Country 2 is operating on its PPF, but country 1 is clearly not operating on its PPF. none of the above

True

When an economy is not using all of its resources, it is producing at a point below its production possibilities frontier. True or False

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

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. As more cars are produced, the opportunity cost of each additional car is less than for the preceding unit. As more cars are produced, the opportunity cost of each additional car is the same as for the preceding unit. People pay lower prices for cars the higher the costs of producing cars.

unemployment of resources is shown by shifting the PPF inward

Which of the following is not true about production possibilities frontiers? moving from one point to another on a PPF incurs a tradeoff economic growth is shown by shifting the PPF outward unemployment of resources is shown by shifting the PPF inward a PPF can shift inward or outward

If scarcity did not exist, neither would a PPF.

Which of the following statements is true? The concept of opportunity costs cannot be illustrated within a PPF framework. If scarcity did not exist, neither would a PPF. All PPFs are downward-sloping straight lines. There are more attainable points than unattainable points in every PPF diagram.

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

Which of the following statements is true? In a world of efficiently used scarce resources, more of one good necessarily means less of some other good. The law of increasing opportunity costs assumes that all people have the same ability to produce goods. Efficiency implies that it is impossible to get more of one good without getting less of another. Even if a country has unemployed resources, it can still be operating on its production possibilities frontier (PPF).

be a straight line.

With a constant opportunity cost between goods A and B, the PPF for goods A and B would be a straight line. be a bowed-outward line. be a bowed-inward line. not exist.

constant opportunity costs.

A PPF is a straight line as a result of constant opportunity costs. increasing opportunity costs. decreasing opportunity costs. scarcity. choice.

True

A production possibilities frontier separates an attainable region from an unattainable region. True or False

maximum output with given resources and technology.

An economy is productive efficient if it produces more than enough food to feed everyone. more goods and services in each successive year. maximum output with given resources and technology. enough output so that no one lives in poverty.

inside (below) its PPF.

Country X has a high unemployment rate. It follows that country X is operating beyond its production possibilities frontier (PPF). on its PPF. inside (below) its PPF. at a productive efficient point.

True

It is possible through trade for a country to consume a combination of goods that lies beyond its production possibilities frontier. True or False

a new law that interferes with productive efficiency.

Suppose the economy goes from a point on its production possibilities frontier (PPF) to a point directly to the left of it. Assuming that the PPF has not shifted, this could be due to a gain of resources. a loss of resources. technological improvement in the production of both goods. a new law that interferes with productive efficiency.

improvement; released labor to go to

Technological __________ in American agriculture has __________ other types of employment. improvement; drawn labor away from improvement; released labor to go to stagnation; drawn labor away from stagnation; released labor to go to

more of a good is produced, the higher the opportunity costs of producing that good.

The law of increasing opportunity costs states that as less of a good is produced, the higher the opportunity costs of producing that good. more of a good is produced, the lower the opportunity costs of producing that good. more of a good is produced, the higher the opportunity costs of producing that good. more of a good is produced, the opportunity cost of producing the good remains the same. a and b