HOMEWORK 2 ECON

Which of the following is an example of a capital input?

A computer

A production possibilities frontier shifts outward when

The economy experiences economic growth

Refer to Figure 2-4. This economy cannot produce at which point(s)?

Q, S

Refer to Figure 2-4. Efficient production is represented by which point(s)?

R, U

Refer to Figure 2-4. This economy has the ability to produce at which point(s)?

R, U

Refer to Figure 2-4. Inefficient production is represented by which point(s)?

T

Refer to Figure 2-9, Panel (a). Production at point K is

Possible but inefficient

Factors of production are

used to produce goods and services

Refer to Figure 2-6. The opportunity cost of this economy moving from point I to point H is

120 blankets

Refer to Table 2-4. What is the opportunity cost to Picnicland of increasing the production of hotdogs from 450 to 900?

225 burgers

Refer to Figure 2-7. If this economy devotes all of its resources to the production of engines, then it will produce

40 engines and 0 tvs

Which of the following is a correct statement about production possibilities frontiers?

An economy can produce at any point on or inside the production possibilities frontier, but not outside the frontier

In economics, capital refers to

Buildings and machines used in the production process

Any point on a country's production possibilities frontier represents a combination of two goods that an economy

Can produce using all available resources and technology

In the circular-flow diagram,

Income payments flow from firms to households, and sales revenue flows from households to firms

When a production possibilities frontier is bowed outward, the opportunity cost of producing an additional unit of a good

Increases as more of the good is produced

An economy's production of two goods is efficient if

It is impossible to produce more of one good without producing less of the others

Which of the following is not a factor of production? land money capital labor

Money

Production is efficient if the economy is producing at a point

On the production possibilities frontier

The production possibilities frontier provides an illustration of the principle that

People face trade offs

Refer to Figure 2-6. If this economy moves from point H to point G, then which of the following statements is correct?

This economy has experienced economic growth

In the circular-flow diagram, in the markets for goods and services

households are buyers and firms are sellers

In the circular-flow diagram, in the markets for factors of production

households are sellers and firms are buyers

Refer to Figure 2-6. The opportunity cost of this economy moving from point K to point H is

zero