Macro Econ 2101- CHPT 2 Quiz
A worker is hired in a
factor market
Firms
sell goods in the product market
increasing opportunity cost along a bowed-out production possibilities frontier occurs because
some factors of production are not equally suited to producing both goods or services
Comparative advantage means
the ability to produce a good or service at a lower opportunity cost than any other producer
Which of the following is a factor of production?
the janitor a the local elementary school
The production possibilities frontier shows
the maximum attainable combinations of two products that may be produced in a particular time period with available resources
Increasing marginal opportunity cost implies that
the more resources already devoted to any activity, the pay off from allocating yet more resources to that opportunity increases by progressively smaller amounts
Without technological advancement, how can a nation achieve economic growth?
through an increase in supplies of factors of production
The table above shows the output per day of two gardeners, George and Jack. They can either devote their time to mowing lawns of cultivating gardens. Lawns Mowed- G=10 J=6 Gardens Cultivated- G=5 J=4
two lawns mowed
Suppose your expenses for this term are as follows: tuition: $9,000, room and board: $1,500, books and other educational supplies: $1,000. Further, during the term, you can only work part−time and earn $3,000 instead of your full−time salary of $8,000. What is the opportunity cost of going to college this term, assuming that your room and board expenses would be the same even if you did not go to college?
$15,000
The figure above shows the production possibilities frontiers for Costa Rica and Guatemala. Each country produces two goods, pineapples and coconuts. What is the opportunity cost of producing 1 ton of coconuts in Guatemala?
1/2 of a ton of pineapples
If the economy is currently producing at point A, what is the opportunity cost of moving to point B?
12 thousand forks
The figure to the right shows the production possibilities frontier for Vidalia, a nation that produces two goods, roses and orchids. What is the opportunity cost of one dozen orchids?
2.5 dozen roses
If the economy is currently producing at point X, what is the opportunity cost of moving to point W?
3 million tons of paper
If society decides it wants more of one good and ____, then it has to give up some of another good and incur some opportunity costs.
All resources are fully utilized
____ a nation's production possibilities frontier represents economic growth.
An outward shift of
The table above shows the output per day of two gardeners, George and Jack. They can either devote their time to mowing lawns or cultivating gardens. Which of the following statements is true? Lawns Mowed- G=10 J=6 Gardens Cultivated- G=5 J=4
George has an absolute advantage in both tasks
The table above shows the output per day of two gardeners, George and Jack. They can either devote their time to mowing lawns or cultivating gardens. Which of the following statements is true? Lawns mowed- G=10 J=6 Gardens cultivated- G=5 J=4
Jack has a comparative advantage in garden cultivating and George in lawn mowing
____ is (are) inefficient in that not all resources are being used.
Point A
____ is (are) unattainable with current resources.
Point C
Which of the following statements is true about a simple circular flow model?
Producers are buyers in the factors market
For each watch that Switzerland produces, it gives up the opportunity to make 50 pounds of chocolate. Germany can produce 1 watch for every 100 pounds of chocolate it produces. Which of the following is true about the comparative advantage between the two countries?
Switzerland has the comparative advantage in watches
The production possibilities frontier assumes all of the following except
any level of the two products that the economy produces is currently possible
The ________ production points on a production possibilities frontier are the points along and inside the production possibilities frontier.
attainable
A production possibilities frontier with a ____ shape indicated increasing opportunity costs as more and more of one good is produced.
bowed outward
The table above shows the output per day of two gardeners, George and Jack. They can either devote their time to mowing lawns or cultivating gardens. What is Jack's opportunity cost of cultivating a garden? Lawns mowed- G=10 J=6 Gardens cultivated- G=5 J=4
one and a half lawns mowed
The concept of ____ is that the economic cost of using a factor production is the alternative use of that factor is given up.
opportunity cost
If the production possibilities frontier is linear, then
opportunity costs are constant as more of one good is produced
When you purchase a new surfboard you do so in the
product market
Households
purchase final goods and services in the product market