Basic Definitions Macroeconomics (Green Edition) pgs (11-14)

The production possibilities frontier drawn from the above schedule will be:

A. A straight line indicating constant opportunity cost.

Efficient use of resources and technology is represented by point _______, and inefficient use is represented by point _______.

B. (B;A)

The opportunity cost of moving from combination B to combination C on PPF₁ is:

B. 2 airplanes.

Which of the following will cause a movement from a point inside an economy's production possibilities frontier (PPF) to a point on its PPF?

B. An increase in the efficiency with which resources are used.

The above production possibilities schedule illustrates:

B. Increasing opportunity cost.

The shape of the above production possibilities frontier reflects:

B. Increasing opportunity cost.

The combination of 40 apples and 20 peaches is:

B. Inefficient in the use of current resources and technology.

Producing a combination of 2 cars and 180 bicycles:

B. Is not possible given current resources and technology.

If this economy's ability to produce is presented by PPF₁, then a combination of 3 airplanes and 4 submarines:

B. Represents full employment and efficient production.

For this economy, combination F is:

B. Unattainable given current resources and technology.

The opportunity cost of the second car is __________ bicycles.

C. 35

Production possibilities frontiers (curves):

C. Illustrates the limits to what can be produced from current resources and technology.

Points inside a production possibilities frontier imply that:

C. Production is inefficient or resources are unemployed.

The shift from PPF₁ to PPF₂ could occur in response to:

C. Technological improvements in shoe industry.

In the production possibilities model, the opportunity cost of a good is:

C. The amount of other goods that must be given up in order to produce it.

The opportunity cost of moving from combination C to combination D is:

D. 20 apples.

A production possibilities frontier is drawn assuming that:

D. All of the above are true.

In the production possibilities model, economic growth is illustrated by:

D. An outward shift of the PPF.

The above data indicate that the resources and technology available:

D. Are equally well suited to growing both apples and peaches.

On PPF₂, the combination of submarines and airplanes that society values most highly is:

D. Impossible to determine from the information given.

Combination Apples Peaches A 80 0 B 60 20 C 40 40 D 20 80

Use the data in the production possibilities schedule left to answer 2-5:

Combination Apples Peaches A 0 220 B 1 200 C 2 165 D 3 100 E 4 0

Use the data on left to answer questions 2-4: