eco 201 exam 2
c
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 used to produce consumption goods. relatively cheap at low levels of output. better suited for the production of some goods than others. used efficiently.
a
An economy is productive efficient if it produces maximum output with given resources and technology. more goods and services in each successive year. more than enough food to feed everyone. enough output so that no one lives in poverty.
b
An increase in the quantity of resources shifts the PPF leftward. shifts the PPF rightward. moves the economy to a new point down along a given PPF. moves the economy to a new point up along a given PPF.
b
Consider the following combinations of guns and butter that can be produced: 0 guns, 20,000 units of butter; 5,000 guns, 15,000 units of butter; 10,000 guns, 10,000 units of butter; 15,000 guns, 5,000 units of butter; 20,000 guns, 0 units of butter. The PPF between guns and butter is a downward-sloping bowed-out curve. a downward-sloping straight line. an upward-sloping straight line. It is impossible to answer this question without knowing which good would be plotted on the vertical axis.
c
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 1 pear. 7 apples. 3 apples. 21 pears.
b
Exhibit 2-8 Maria Maya Good X Good Y Good X Good Y 90 0 60 0 60 30 40 10 30 60 20 20 0 90 0 30 Refer to Exhibit 2-8. For Maria, the opportunity cost of producing one unit of good Y is ___________ unit(s) of good X. 2.00 1.00 0.50 10.00
d
Exhibit 2-8 Maria Maya Good X Good Y Good X Good Y 90 0 60 0 60 30 40 10 30 60 20 20 0 90 0 30 Refer to Exhibit 2-8. For Maya, the opportunity cost of producing one unit of good Y is ___________ unit(s) of good X. 0.50 1.00 10.00 2.00
a
Exhibit 2-8 Maria Maya Good X Good Y Good X Good Y 90 0 60 0 60 30 40 10 30 60 20 20 0 90 0 30 Refer to Exhibit 2-8. Who has the comparative advantage in the production of good X? Maya Neither Maria nor Maya Maria Both Maria and Maya
b
Farming today in the U.S. is __________ productive compared to a century ago, resulting in there being __________ farmers today than at the turn of the previous century. about as; fewer much more; fewer about as; more much more; more
c
If Sean can bake bread at a lower opportunity cost than Jason, and Jason can produce paintings at a lower opportunity cost than Sean, it follows that Both Sean and Jason have a comparative disadvantage in producing paintings. There is not enough information to answer the question. Sean has a comparative advantage in baking bread and Jason has a comparative advantage in producing paintings. Both Sean and Jason have a comparative advantage in baking bread. Sean has a comparative advantage in paintings and Jason has a comparative advantage in baking bread.
d
If an economy is operating on its production possibilities frontier (PPF), are there any unemployed resources in the economy? The answer is "yes," but not for any of the reasons specified in answers a through d. It depends on whether the economy's PPF is a concave (downward-sloping) curve or a straight line. 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.
c
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 an upward-sloping curve. a downward-sloping straight line. a downward-sloping curve that is bowed outward. circular. a downward-sloping curve that is bowed inward.
b
In an eight-hour day, Andy can produce either 24 loaves of bread or 8 pounds of butter. In an eight-hour day, John can produce either 8 loaves of bread or 8 pounds of butter. The opportunity cost of producing 1 pound of butter is 1/3 loaves of bread for Andy and 1 loaf of bread for John. 3 loaves of bread for Andy and 1 loaf of bread for John. none of the above 1 hour for Andy and 1 hour for John. 1/3 hour for Andy and 1 hour for John.
a
Jose has one evening in which to prepare for two exams and can employ two possible strategies: Strategy Score in Economics Score in Statistics A 94 79 B 77 90 The opportunity cost of receiving a 94 on the Economics exam in terms of the number of points on the Statistics exam is 11. 90. 17. 79.
c
Points outside (or beyond) the PPF are attainable. inefficient. unattainable. efficient.
c
Refer to Exhibit 2-1. A movement from point B to point D is necessarily a movement from a productive inefficient point to another productive inefficient point. is necessarily a movement from a productive efficient point to a productive inefficient point. could only happen through economic growth. is a movement from a productive efficient point to another productive efficient point.
d
Refer to Exhibit 2-1. The PPF illustrates none of the above that guns are more important than butter. the opportunity cost of one unit of guns is four units of butter. constant opportunity costs between guns and butter. increasing opportunity costs between guns and butter.
c
Refer to Exhibit 2-1. The opportunity cost of moving from point B to A is 10,000 units of butter. the maximum amount of butter that can be produced with available resources. 20,000 units of butter. 50,000 units of guns.
b
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 a loss of resources. an increase in unemployment of some resources. technological improvement in the production of both goods. a gain of resources.
b
The PPF between goods X and Y will be a downward-sloping straight line if increasing opportunity costs exist. curve that is bowed outward if increasing opportunity costs exist. straight line if decreasing opportunity costs exist. curve that is bowed outward if constant opportunity costs exist.
a
The law of increasing opportunity costs states that as more 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 opportunity cost of producing the good remains the same. less of a good is produced, the higher the opportunity costs of producing that good.
c
What is the reason for the law of increasing opportunity costs? There is no reason: it is just one of the laws of economics. The price of a good rises as more of it is demanded. 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. As more of a good is produced, the taxes applied to the production of the good rise.
a
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.
d
Which of the following statements is false? If there are only two goods, guns and butter, producing more of one means producing less of the other if the economy is currently operating at a productive efficient point. If there are only two goods, guns and butter, it is possible to produce more of both goods through economic growth. If there are only two goods, guns and butter, it is possible to produce more of both goods if the economy is currently operating at a productive inefficient point. If there are only two goods, guns and butter, it is possible to produce more of both goods if the economy is currently operating at a productive efficient point.
c
Within the production possibilities frontier (PPF) framework, choice is depicted by the PPF itself. straight-line PPF. need to select among the points making up the PPF. PPF being bowed outward.