ECON CH2 TEST Q'S

Exhibit 2-2 Refer to Exhibit 2-2 which depicts four possible PPF shifts for goods X and Y. Which of these graphs best represents the results of an advance in technology that is exclusively involved with the production of good X? <<1. downward curve moving to the right 2. downward curve to the left 3. downward curve only x moves to right 4. downward curve only y moves up>> a.(1) b.(2) c.(3) d.(4)

c. (3)

In an eight-hour day, Jim can produce either 25 loaves of bread or 5 pounds of butter. In an eight-hour day, Jill can produce either 8 loaves of bread or 8 pounds of butter. The opportunity cost of producing 1 pound of butter is a.4 loaves of bread for Jim and 1 loaf of bread for Jill. b.5 loaves of bread for Jim and 2 loaves of bread for Jill. c.5 loaves of bread for Jim and 1 loaf of bread for Jill. d.1/5 loaves of bread for Jim and 1 loaf of bread for Jill.

c. 5 loaves of bread for Jim and 1 loaf of bread for Jill (25/5 = 5 for Jim ; 8/8 = 1 for Jill)

_____________________ refers to the body of skills and knowledge involved in the use of resources in production. a.Utility b.Technology c.Efficiency d.Specialization

A. Utility ( The PPF shows the maximum possible combinations of two goods that can be produced with a fixed amount of resources and technology. At all points along a PPF the economy is producing a combination of goods that is productive efficient and attainable. At points that lie below the PPF the economy is producing a combination of goods that is productive inefficient and attainable. At points below the PPF more of one good can be produced without any less of another being produced.)

Refer to the exhibit. The economy is currently operating at point C. The opportunity cost of moving to point E is << https://cxp-cdn.cengage.info/protected/prod/assets/20/7/207d4763-bb88-4202-b897-10b08f1d8cca.jpg?__gda__=st=1567826054~exp=1568430854~acl=%2fprotected%2fprod%2fassets%2f20%2f7%2f207d4763-bb88-4202-b897-10b08f1d8cca.jpg*~hmac=4063cce5e322e730803019ccb1012784729f9e916aa7f035c5f5be0a6dd60eb7 >> DOESNT WORK a.3 units of X b.4 units of X c.5 units of X d.6 units of X e.0 units of X

E. 0 Units of X (b/c C is INSIDE the PPF, so it's not @ its FULLEST POTENTIAL)

Exhibit 2-2 Refer to Exhibit 2-2 which depicts four possible PPF shifts for goods X and Y. Which of these graphs best represents the results of an increase in the quantity of resources available for the production of both goods? <<1. downward curve moving to the right 2. downward curve to the left 3. downward curve only x moves to right 4. downward curve only y moves up>> a.(1) b.(2) c.(3) d.(4)

a. (1)

Exhibit 2-1~ Combo A: 0 airpln / 600 ice cream Combo B: 1 airpln / 550 ice cream Combo C: 2 airpln / 480 ice cream Combo D: 3 airpln / 280 ice cream Combo E: 4 airpln / 0 ice cream Refer to Exhibit 2-1. What is the opportunity cost of moving from combination D to combination E? a.280 units of ice cream b.70 units of ice cream c.1 airplane d.130 units of ice cream

a. 280 units of ice cream (the opportunity cost is the one being lost)

Exhibit 2-3 << https://cxp-cdn.cengage.info/protected/prod/assets/d6/f/d6f490ff-68ea-4efd-b41c-e87a83d4ccf7.png?__gda__=st=1567826054~exp=1568430854~acl=%2fprotected%2fprod%2fassets%2fd6%2ff%2fd6f490ff-68ea-4efd-b41c-e87a83d4ccf7.png*~hmac=a5df32db82606fe9e9c585a7b6163368ea4b2f222feb58ecbf64cca9aa05ed70 >> Refer to exhibit 2-3. Suppose that the economy is initially at point C. What is the opportunity cost of the economy moving from point C to point B? a.40,000 fax machines b.20,000 copiers c.40 fax machines d.20 copiers

a. 40,000 fax machines (opportunity cost again, so it's costing you in losing that)

Refer to the table. Who has the comparative advantage in the production of good A? <<Jorge for Good A: 0 - 25 - 50 - 75 Melanie for Good A: 0 - 5- 10 -15>> a.Jorge b.Melanie c.Both Jorge and Melanie d.Neither Jorge nor Melanie e.There is not enough information to answer the question

a. Jorge (goes up by 25, produces more)

Suppose that one point on a country's production possibilities frontier (PPF) for trucks and tables occurs at a point at which 500 trucks can be produced and 0 tables are produced. At this point the economy is producing a combination of goods that is productive a.efficient and attainable. b.inefficient and attainable. c.efficient and unattainable. d.inefficient and unattainable.

a. efficient and attainable.

Points that lie on a production possibilities frontier (PPF) are __________________________, while points that lie below the PPF are ________________________. a.efficient and attainable; inefficient and attainable b.inefficient and attainable; efficient and unattainable c.efficient and unattainable; inefficient and attainable d.efficient and attainable; inefficient and unattainable

a. efficient and attainable; inefficient and attainable

If Country XYZ is currently producing a combination of outputs that lies on its production possibilities frontier (PPF), then its economy is productive_____________ and has _______________ unemployed resources. a.efficient, no b.efficient, some c.inefficient, no d.inefficient, some

a. efficient, no

The economy can produce 15X and 10Y, 10X and 20Y, 5X and 30Y, or 0X and 40Y. It follows that the opportunity cost of one unit of X is ____Y and the opportunity cost of one unit of Y is ____ X. a.two, one-half b.one-half, two c.one, one d.two, two

a. two, one-half (Each time that the economy produces ten additional units of good Y they must forfeit five units of good X. This means that the opportunity cost of producing one unit of Y is two units of good X, since ten divided by five equals two. It also means that the opportunity cost of producing one unit of X is one-half unit of Y, since five divided by ten equals one-half. TLDR +10y/-5x = 2 5X/10Y=.5)

If two countries use specialization and trade guided by comparative advantage, then a.both countries can consume a combination of goods beyond its PPF. b.the larger of the two countries will be able to consume a combination of goods beyond its PPF, but not the smaller country. c.the smaller of the two countries will be able to consume a combination of goods beyond its PPF, but not the larger country. d.neither country will be able to consume a combination of goods beyond its PPF.

a.both countries can consume a combination of goods beyond its PPF.

A bowed-outward PPF represents ____________________ and a straight-line PPF represents___________________. a.increasing opportunity costs; constant opportunity costs b.constant opportunity costs; increasing opportunity costs c.increasing opportunity costs; increasing opportunity costs d.constant opportunity costs; constant opportunity costs

a.increasing opportunity costs; constant opportunity costs

If the economy is at one point on the PPF instead of at another point on the PPF, a.then this can affect the industry in which you end up working. b.then at either point, productive inefficiency exists. c.then at one point productive efficiency exists, but at the other point productive inefficiency exists. d.then at one point productive efficiency exists, but at the other point the combination of goods and services (represented by that point) is unavailable.

a.then this can affect the industry in which you end up working.

Exhibit 2-2 Refer to Exhibit 2-2 which depicts four possible PPF shifts for goods X and Y. Which of these graphs best represents the result of a plague that kills a significant percentage of the economy's labor force? <<1. downward curve moving to the right 2. downward curve to the left 3. downward curve only x moves to right 4. downward curve only y moves up>> a.(1) b.(2) c.(3) d.(4)

b. (2) (When a large portion of the labor force is killed (through illness, war, or natural disaster) the quantity of resources available is decreased, the economy will be able to produce less of good X and good Y, shifting the PPF inward (to the left).)

Suppose an economy can produce any of the following combinations of copiers and fax machines: (0 copiers and 120,000 fax machines), (20,000 copiers and 80,000 fax machines), (40,000 copiers and 40,000 fax machines), (60,000 copiers and 0 fax machines). From the information provided, what is the opportunity cost of producing each additional fax machine? a.0.50 fax machines b.0.50 copiers c.2 fax machines d.2 copiers

b. 0.50 copiers (look @40,000 copiers...40,000 x ________ = 20,000 copiers? *trial and error*)

Two points on a country's production possibilities frontier are point A where the country can produce 100 cars and 300 cameras and point B where the country can produce 95 cars and 350 cameras. The opportunity cost of moving from point A to point B is a.50 cameras. b.5 cars. c.10 cars. d.2.5 cameras.

b. 5 cars. (the one that's decr in #, since it's the "cost" to get an opportunity)

***Refer to the exhibit. Which of the following statements is true? IDGI a.Points B and D are more efficient than points A and C. b.If the economy's PPF is represented by PPF1, points A and B are efficient, while points C and D are unattainable. c.If the economy's PPF is represented by PPF2, points C and D are efficient, while points A and B are unattainable. d.both a and c

b. If the economy's PPF is represented by PPF1, points A and B are efficient, while points C and D are unattainable.

There are large numbers of unemployed resources in the economy. The economy is most likely operating a.on its PPF. b.below its PPF. c.above its PPF. d.productive efficiently. e.b and d

b. below its PPF.

If Country ABC can produce a given good at a lower opportunity cost than can any other country, then an economist would describe Country ABC as having __________________________ advantage in the production of this good. a.an absolute b.a comparative c.a PPF d.a variable

b. comparative

Consider two straight-line PPFs. They have the same horizontal intercept, but curve 1 is flatter than curve 2. The opportunity cost of producing the good on the horizontal axis a.is greater along curve 1. b.is greater along curve 2. c.is the same along both curves. d.cannot be compared for the two curves without more information.

b. is greater along curve 2.

If the law of increasing opportunity costs is operable, and currently the opportunity cost of producing the 201st unit of good X is 6Y, then the opportunity cost of producing the 301st unit of good X is most likely to be a.less than 6Y. b.more than 6Y. c.more than 1/6Y but less than 6Y. d.less than 1/6Y but more than zero. e.none of the above

b. more than 6Y

Suppose that an economy originally has a bowed outward production possibilities frontier (PPF) for military goods and civilian goods. An improvement in technology that allows only more military goods to be produced, but not more civilian goods, would cause a.the entire PPF to shift rightward. b.the endpoint of the PPF to shift rightward for military goods, but the endpoint of the PPF for civilian goods would remain at its original point. c.the endpoint of the PPF to shift rightward for civilian goods, but the endpoint of the PPF for military goods would remain at its original point. d.the entire PPF to shift leftward.

b. the endpoint of the PPF to shift rightward for military goods, but the endpoint of the PPF for civilian goods would remain at its original point.

Exhibit 2-1~ Combo A: 0 airpln / 600 ice cream Combo B: 1 airpln / 550 ice cream Combo C: 2 airpln / 480 ice cream Combo D: 3 airpln / 280 ice cream Combo E: 4 airpln / 0 ice cream Refer to Exhibit 2-1. If the data presented in this table was plotted to create a production possibilities frontier (PPF), the shape of the resulting PPF would be a _______________________ that is _______________________. a.straight line; upward-sloping b.bowed outward curve; downward-sloping c.straight line; downward-sloping d.bowed outward curve; upward-sloping

b.bowed outward curve; downward-sloping ( The data in the table indicates that the opportunity cost of producing each additional airplane increases as more airplanes are produced. Bowed-outward PPFs are associated with increasing opportunity costs. PPFs are always downward-sloping because increased production of one good results in decreased production of the other good.)

The economy is currently at a point on its production possibilities frontier (PPF) for civilian goods and military goods. A presidential candidate says that it is possible to get more of everything--more civilian goods and more military goods--simultaneously. The candidate is a.correct, assuming that the PPF is shifting inwards. b.correct, assuming that the PPF is shifting outwards. c.correct, assuming that the PPF is not shifting at all. d.incorrect, assuming that the PPF is shifting outwards.

b.correct, assuming that the PPF is shifting outwards.

A movement from one point to another along a given production possibilities frontier (PPF) indicates that a.economic growth has occurred. b.the society has chosen to produce a different combination of goods. c.technology has improved. d.there has been an increase in the quantity of resources available.

b.the society has chosen to produce a different combination of goods.

Refer to the exhibit. Productive efficiency exists at << https://cxp-cdn.cengage.info/protected/prod/assets/20/7/207d4763-bb88-4202-b897-10b08f1d8cca.jpg?__gda__=st=1567826054~exp=1568430854~acl=%2fprotected%2fprod%2fassets%2f20%2f7%2f207d4763-bb88-4202-b897-10b08f1d8cca.jpg*~hmac=4063cce5e322e730803019ccb1012784729f9e916aa7f035c5f5be0a6dd60eb7 >> a.at point C but not point A. b.neither at point C nor at point A. c.at both point C and at a point A. d.at point A but not at point C.

c. at both point C and at point A.

A production possibilities frontier (PPF) that is a downward-sloping straight line depicts _________________ opportunity costs. a.decreasing b.increasing c.constant d.variable

c. constant

Economic growth causes the PPF to a.shift inward. b.remain constant. c.shift outward. d.go from a straight line to a curve.

c. shift outward.

Which of the following is an illustration of the law of increasing opportunity costs? a.As more computers are produced, the opportunity cost incurred from producing each additional computer is constant. b.As more computers are produced, the opportunity cost incurred from producing each additional computer is less than for the previous unit produced. c.As more computers are produced, the opportunity cost incurred from producing each additional computer is greater than for the previous unit produced. d.taxes tend to rise as more of a good is produced.

c.As more computers are produced, the opportunity cost incurred from producing each additional computer is greater than for the previous unit produced.

Suppose that a society begins at a point inside its production possibilities frontier (PPF) and then ends up at a point on that same PPF. Which of the following could have caused such a change? a.The society started out using all of its resources, but then allowed some of its resources to become unemployed. b.The society developed an improvement in technology. c.The society had some unemployed resources to begin with, but then started using all of its resources. d.The society experienced an increase in the quantity of resources available.

c.The society had some unemployed resources to begin with, but then started using all of its resources.

The law of increasing opportunity costs exists because a.some resources are better suited to the production of a given good than are other resources. b.the price of a good rises as more of it is demanded. c.all resources are mostly likely to be equally suited to the production of a given good. d.taxes tend to rise as more of a good is produced.

c.all resources are mostly likely to be equally suited to the production of a given good.

In the real world, most production possibilities frontiers are a a.straight downward-sloping line. b.straight upward-sloping line. c.bowed outward curve. d.bowed inward curve.

c.bowed outward curve.

If an increasing quantity of good X must be forfeited in order to produce each additional unit of good Y, then the production possibilities frontier (PPF) for goods X and Y would be a(n) a.downward sloping straight line. b.upward sloping straight line. c.bowed outward curve. d.bowed inward curve.

c.bowed outward curve. (A curve that is bowed outward starts out relatively flat and becomes increasingly steep, so its slope is increasing. If producing each successive unit of good X requires giving up increasingly more units of good Y, then the slope of the PPF would be bowed outward.)

If the economy is at one point on the PPF instead of at another point, a.then one point represents productive efficiency and the other point does not. b.then one point represents productive efficiency and the other point represents productive inefficiency. c.then this could be because people want to consume more of one good than another. d.then both points represent productive inefficiency.

c.then this could be because people want to consume more of one good than another.

If there are 5 million manufacturing jobs in a country today and 8 million manufacturing jobs in the country 10 years ago, it follows that a.there are fewer manufactured goods produced in the country today than 10 years ago. b.there are more manufactured goods produced in the country today than 10 years ago. c.there could be more manufactured goods produced in the country today than 10 years ago. d.more people work in manufacturing today than 10 years ago.

c.there could be more manufactured goods produced in the country today than 10 years ago. (There could be fewer manufactured goods produced in the country, but this is NOT necessarily so. KEYWORD: COULD)

If an economy can produce a maximum of 200 units of good Y and the opportunity cost of 1X is always 5Y, then what is the maximum units of good X the economy can produce? a.1,000 b.100 c.400 d.40

d. 40 (200/5=40)

Exhibit 2-1~ Combo A: 0 airpln / 600 ice cream Combo B: 1 airpln / 550 ice cream Combo C: 2 airpln / 480 ice cream Combo D: 3 airpln / 280 ice cream Combo E: 4 airpln / 0 ice cream Refer to Exhibit 2-1. What is the opportunity cost of moving from combination A to combination B? a.550 units of ice cream b.70 units of ice cream c.1 airplane d.50 units of ice cream

d. 50 units of ice cream (the one being give up, again bitch)

If the economy can produce (a) 10X and 0Y and it can also produce (b) 0X and 100Y, then it follows that a.the PPF is a straight line. b.the PPF is bowed-outward. c.the PPF is bowed-inward. d.There is not enough information to answer the question.

d. There is not enough information to answer the question.

Which of the following is most likely to shift a country's production possibilities frontier (PPF) leftward? a.an increase in the country's unemployment rate b.a decrease in the country's unemployment rate c.an advance in technology d.a decline in technology

d. a decline in technology (A decline in technology generally involves being able to produce less output with a fixed amount of resources or the requirement to use more resources to produce the same level of output. A reduction in technology would therefore cause the country's PPF to shift leftward.)

Suppose that there is a production possibilities frontier (PPF) drawn for goods X and Y. If there is an increase in the amount of good Y forfeited as every additional successive unit of good X is produced, the PPF between goods X and Y would be a.an upward-sloping straight line. b.a downward-sloping curve that is bowed inward. c.a downward-sloping straight line. d.a downward-sloping curve that is bowed-outward.

d. a downward-sloping curve that is bowed-outward

If there is always a five-for-one tradeoff between goods X and Y, then the PPF between X and Y is a.an upward-sloping straight line. b.a downward-sloping curve that is bowed inward. c.a downward-sloping curve that is bowed outward. d.a downward-sloping straight line e.none of the above

d. a downward-sloping straight line <CONSTANT>

Points that lie beyond (to the right of) the production possibilities frontier represent points that a.represent a society producing a combination of goods that are productive efficient and attainable. b.indicate a society that is experiencing a high level of unemployment. c.are in the attainable region. d.are in the unattainable region.

d. are in the unattainable region.

Refer to the exhibit. If PPF1 is the relevant production possibilities frontier, society may move to PPF2 as a result of <<PPF1 is a curve and PPF2 is slightly higher than PPF1 and also a curve>> a. an advancement in technology b.an increase in resources c.a decrease in resources d.both a and b e.both a and c

d. both a and b

Refer to the exhibit. The PPF illustrates <<downward straight line slope>> a.the opportunity cost of one unit of guns is four units of butter. b.increasing opportunity costs between guns and butter. c.that guns are more important than butter. d.constant opportunity costs between guns and butter.

d. constant opportunity costs between guns and butter.

The increased production of computers comes at increasing opportunity costs in terms of printers. This means that a.it takes more resources to produce a computer than a printer. b.for every computer produced, a constant number of printers is forfeited. c.it takes fewer resources to produce a computer than a printer. d.for every computer produced, a different number of printers is forfeited.

d. for every computer produced, a different number of printers is forfeited. (specifics ig)

The discovery and utilization of a new and readily available alternative source of energy would tend to a.cause a movement down along a country's existing production possibilities frontier. b.cause a movement up along a country's existing production possibilities frontier. c.shift a country's production possibilities frontier leftward. d.shift a country's production possibilities frontier rightward.

d.shift a country's production possibilities frontier rightward.

The economy moves from point A, where it produces 400X and 200Y, to point B, where it produces 500X and 140Y. It follows that a.point A is an inefficient point. b.point A may be an inefficient point. c.point B is an efficient point. d.point A may be an efficient point. e.b and d

e. b and d

An economy is productive inefficient when a.it produces at a point on its PPF. b.it produces at a point above its PPF. c.it can produce more of one good without giving up some of another good. d.it does not produce the maximum output with its given resources and technology. e.c and d

e. c and d