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:
