MACROECON CH 2

A. zero

If the economy is currently producing at point Y, what is the opportunity cost of moving to point W? A. zero B. 16 million tons of paper C. 9 million tons of paper D. 2 million tons of steel

B. unattainable.

The points outside the production possibilities frontier are A. efficient. B. unattainable. C. inefficient. D. attainable.

D. $1,000 in cash

Which of the following is not a factor of production? A. the manager of the local tire shop B. a drill press in a machine shop C. an acre of farmland D. $1,000 in cash

A. product market.

When you purchase a new pair of jeans you do so in the A. product market. B. resource market. C. input market. D. factor market.

C. increasing opportunity costs as more and more of one good is produced.

A production possibilities frontier with a bowed-outward shape indicates A. decreasing opportunity costs as more and more of one good is produced. B. the possibility of inefficient production. C. increasing opportunity costs as more and more of one good is produced. D. constant opportunity costs as more and more of one good is produced.

C. the process by which individuals acting in their own self−interest bring about a market outcome that benefits society as a whole.

Adam Smith's invisible hand refers to A. the laws of nature that influence economics decisions. B. property ownership laws and the rule of the court system. C. the process by which individuals acting in their own self−interest bring about a market outcome that benefits society as a whole. D. the government's unobtrusive role in ensuring that the economy functions efficiently.

D. economic growth.

An outward shift of a nation's production possibilities frontier represents A. rising prices of the two goods on the production possibilities frontier model. B. an impossible situation. C. a situation in which a country produces more of one good and less of another. D. economic growth.

D. at a lower opportunity cost than any other producer.

Comparative advantage means the ability to produce a good or service A. of a higher quality than any other producer. B. at a lower selling price than any other producer. C. at a higher profit level than any other producer. D. at a lower opportunity cost than any other producer.

C. it has to give up some of another good and incur some opportunity costs.

If society decides it wants more of one good and all resources are fully utilized, then A. additional resource supplies will have to be found. B. it is unable to do this unless technology advances. C. it has to give up some of another good and incur some opportunity costs. D. more unemployment will occur.

A. 5 million tons of paper

If the economy is currently producing at point W, what is the opportunity cost of moving to point X? A. 5 million tons of paper B. 3 million tons of steel C. 9 million tons of paper D. 19 million tons of steel

C. linear

If the production possibilities frontier is ________, then opportunity costs are constant as more of one good is produced. A. non-linear B. bowed in C. linear D. bowed out

B. 75 pounds of meat

Refer to the diagram to the right which shows the production possibilities frontier for Mendonca, an agrarian nation that produces two goods, meat and vegetables. Suppose Mendonca is currently producing 60 pounds of vegetables per period. How much meat is it also producing, assuming that resources are fully utilized? A. 80 pounds of meat B. 75 pounds of meat C. 100 pounds of meat D. 45 pounds of meat

B. technically efficient.

Refer to the diagram to the right. Point B is A. unattainable with current resources. B. technically efficient. C. the equilibrium output combination. D. inefficient in that not all resources are being used.

C. unattainable with current resources.

Refer to the diagram to the right. Point C is A. inefficient in that not all resources are being used. B. technically efficient. C. unattainable with current resources. D. is the equilibrium output combination.

A. outside Tomaso's production possibilities frontier.

Refer to the table to the right. Assume Tomaso's Trattoria only produces pizzas and calzones. A combination of 36 pizzas and 30 calzones would appear A. outside Tomaso's production possibilities frontier. Your answer is correct. B. along Tomaso's production possibilities frontier. C. at the horizontal intercept of Tomaso's production possibilities frontier. D. inside Tomaso's production possibilities frontier.

A. Graph A

Sergio Vignetto raises cattle and llamas on his land. His land is equally suitable for raising either animal. Which of the graphs in the figure above represent his production possibilities frontier? A. Graph A B. Graph B C. Graph C D. either Graph A or Graph C E. either Graph B or Graph C

A. produce a combination of goods that lie outside its own production possibilities frontier.

Specializing in the production of a good or service in which one has a comparative advantage enables a country to do all of the following except A. produce a combination of goods that lie outside its own production possibilities frontier. B. consume a combination of goods that lie outside its own production possibilities frontier. C. increase the variety of products that it can consume with no increase in resources. D. engage in mutually beneficial trade with other nations.

A. 0 pounds of meat

The figure shows the production possibilities frontier for Mendonca, an agrarian nation that produces two goods, meat and vegetables. If Mendonca chooses to produce 160 pounds of vegetables, how much meat can it produce to maximize production? A. 0 pounds of meat B. 30 pounds of meat C. 60 pounds of meat D. 120 pounds of meat

B. equal to the highest value of an alternative use of the time and money spent on the class.

The opportunity cost of taking a semester−long economics class is A. the cost of tuition and fees only. B. equal to the highest value of an alternative use of the time and money spent on the class. C. the knowledge and enjoyment you receive from attending the class. D. the value of the time spent in the classroom. E. zero because there is no admission charged if you are enrolled in the course.

A. patents and copyrights

The primary purpose of ________ is to encourage the expenditure of funds on research and development to create new products. A. patents and copyrights B. government-run health care C. centrally planned economies D. nationalizing oil companies

D. if all resources are fully and efficiently utilized, more of one good can be produced only by producing less of another good.

The production possibilities frontier model shows that A. if consumers decide to buy more of a product its price will increase. B. economic growth can only be achieved by free market economies. C. a market economy is more efficient in producing goods and services than is a centrally planned economy. D. if all resources are fully and efficiently utilized, more of one good can be produced only by producing less of another good.

A. maximum attainable

The production possibilities frontier shows the ________ combinations of two products that may be produced in a particular time period with available resources. A. maximum attainable B. only C. minimum attainable D. equitable

A. 1/2 of a unicycle

The table above shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. What is Barney's opportunity cost of making a pogo stick? A. 1/2 of a unicycle B. 1.4 pogo sticks C. 1/3 of a unicycle D. 2 unicycles

D. 2 pogo sticks

The table above shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. What is Barney's opportunity cost of making a unicycle? A. 1.75 unicycles B. 1/2 of a pogo stick C. 2.8 pogo sticks D. 2 pogo sticks

D. 3 pogo sticks

The table above shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. What is Fred's opportunity cost of making a unicycle? A. 1.3 pogo sticks B. 1/3 of a pogo stick C. 1/2 of a unicycle D. 3 pogo sticks

B. Barney has a comparative advantage in making unicycles and Fred in making pogo sticks.

The table above shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. Which of the following statements is true? A. Barney has a comparative advantage in making pogo sticks and Fred in making unicycles. B. Barney has a comparative advantage in making unicycles and Fred in making pogo sticks. C. Barney has a comparative advantage in making both products. D. Fred has a comparative advantage in making both products.

B. 1 1/3 necklaces

The table above shows the output per week of two jewelers, Serena and Haley. They can either devote their time to making bracelets or making necklaces. What is Haley's opportunity cost of making a bracelet? A. 3/4 of a bracelet B. 1 1/3 necklaces C. 2 necklaces D. 3 bracelets

B. 2 necklaces

The table above shows the output per week of two jewelers, Serena and Haley. They can either devote their time to making bracelets or making necklaces. What is Serena's opportunity cost of making a bracelet? A. 3/4 of a bracelet B. 2 necklaces C. 1/2 of a bracelet D. 1/2 of a necklace

B. 1/2 of a bracelet

The table above shows the output per week of two jewelers, Serena and Haley. They can either devote their time to making bracelets or making necklaces. What is Serena's opportunity cost of making a necklace? A. 3/4 of a bracelet B. 1/2 of a bracelet C. 1/2 of a necklace D. 2 necklaces

D. Haley has a comparative advantage in making bracelets and Serena in making necklaces.

The table above shows the output per week of two jewelers, Serena and Haley. They can either devote their time to making bracelets or making necklaces. Which of the following statements is true? A. Haley has a comparative advantage in making both products. B. Haley has a comparative advantage in making necklaces and Serena in making bracelets. C. Serena has a comparative advantage in making both products. D. Haley has a comparative advantage in making bracelets and Serena in making necklaces.

C. Barney has an absolute advantage in making both products.

The table to the right shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. Which of the following statements is true? A. Barney has an absolute advantage in making unicycles and Fred in making pogo sticks. B. Barney has an absolute advantage in making pogo sticks and Fred in making unicycles. C. Barney has an absolute advantage in making both products. D. Fred has an absolute advantage in making both products.

C. the ability to exercise control over one's own resources within the confines of the law.

The term 'property rights' refers to A. the government's right to appropriate land from wealthy land owners to redistribute to peasants. B. the right of a business not to have its assets confiscated by the government in the event that the business is accused of committing fraud. C. the ability to exercise control over one's own resources within the confines of the law. D. the physical possession of a house or any other property which the owner legally purchased.

C. through technological advancement which enables more output with the same quantity of resources

Without an increase in the supplies of factors of production, how can a nation achieve economicgrowth? A. by increasing the prices of factors of production B. by lowering the prices of factors of production C. through technological advancement which enables more output with the same quantity of resources D. by producing more high-value goods and fewer low-value goods

B. can produce more of something than others with the same resources.

You have an absolute advantage whenever you A. are better educated than someone else. B. can produce more of something than others with the same resources. C. can produce something at a lower opportunity cost than others. D. prefer to do one particular activity.

D. Point A

________ is (are) inefficient in that not all resources are being used. A. Points A and C B. Point B C. Point C D. Point A