Question 1

Ceteris paribus,if a society is producing at a point on the production possibilities frontier (PPF) ,it can only increase the production of one good by:

Accepted Answer

A)   also increasing the production of the second good.
B)   decreasing the production of the second good.
C)   increasing the price of the second good.
D)   decreasing the price of the second good.
E)   reducing the resources available for production.F) D) and E)
G) B) and C)

Question 2

A graph that shows the maximum attainable combinations of two goods when society efficiently uses its productive resources is called:

Accepted Answer

A)   a production possibilities frontier (PPF) .
B)   a supply curve.
C)   opportunity cost.
D)   a consumer demand curve.
E)   absolute advantage.F) A) and E)
G) A) and B)

Question 3

Refer to the following figures to answer the next two questions.
 
-Which allocation point in the short-run production possibilities frontier (PPF)  will lead to the most significant growth in the long-run PPF?

Accepted Answer

A)   point A
B)   point B
C)   point C
D)   point D
E)   point EF) B) and E)
G) C) and E)

Question 4

Goods that are produced today in order to make other valuable goods and services in the future are called:

Accepted Answer

A)   normal goods.
B)   inferior goods.
C)   consumer goods.
D)   capital goods.
E)   personal goods.F) A) and D)
G) B) and E)

Question 5

Refer to the following figure to answer the next four questions.
 
-Which of the following represents a point that is unattainable with current resources and technology?

Accepted Answer

A)   point A
B)   point B
C)   point C
D)   point D
E)   point EF) B) and E)
G) A) and D)

Question 6

Which of the following is a positive statement?

Accepted Answer

A)   Winters in Arkansas are too cold.
B)   Everyone should work in a bank to understand the true value of money.
C)   Harvard University is the top education institution in the country.
D)   On average, people save 15% when they switch to GEICO.
E)   Everyone ought to have a life insurance policy.F) B) and D)
G) A) and C)

Question 7

Michael and Angelo are both artists who can create sculptures or paintings each day. The following table describes their maximum outputs per day. Use this table to answer the next four questions.
 
-What is Angelo's opportunity cost of a painting?

Accepted Answer

A)   1/3 painting
B)   1/3 sculpture
C)   2/5 sculpture
D)   3 paintings
E)   3 sculpturesF) A) and D)
G) C) and D)

Question 8

Is there an opportunity cost to increased investment in capital goods today?

Accepted Answer

A)   Yes, increased production of capital goods means fewer consumer goods today.
B)   Yes, increased production of capital goods today means less economic growth in the future.
C)   No, increased production of capital goods today does not mean fewer consumer goods today.
D)   No, increased production of capital goods today guarantees more consumption today.
E)   No, if society is producing at an efficient point on the production possibilities frontier (PPF) , then there is no opportunity cost to investment in capital goods.F) B) and E)
G) A) and C)

Question 9

Michael and Angelo are both artists who can create sculptures or paintings each day. The following table describes their maximum outputs per day. Use this table to answer the next four questions.
 
-What is Michael's opportunity cost of a sculpture?

Accepted Answer

A)   2 paintings
B)   1/2 painting
C)   3 paintings
D)   1/3 sculpture
E)   1/2 sculptureF) B) and E)
G) A) and C)

Question 10

Refer to the following figure for the next two questions.
 
-Economic growth can be depicted on a production possibilities frontier (PPF)  as an:

Accepted Answer

A)   inward shift of the PPF.
B)   outward shift of the PPF.
C)   inward rotation along the x axis.
D)   inward rotation along the y axis.
E)   increase in opportunity cost.F) D) and E)
G) All of the above

Question 11

When one producer has a comparative advantage in production,she:

Accepted Answer

A)   can produce more output than someone else using the same quantity of resources.
B)   can produce a good at a lower opportunity cost than someone else.
C)   does not benefit from trade with other producers.
D)   is unable to reach her production possibilities frontier (PPF) .
E)   trades only with others who have the same comparative advantage.F) None of the above
G) B) and E)

Question 12

Refer to the accompanying figure to answer the next four questions.
 
-Given your current resources,you would need even more hours in each day in order to attain:

Accepted Answer

A)   point A.
B)   point B.
C)   point C.
D)   point D.
E)   point E.F) C) and D)
G) A) and D)

Question 13

A model without any simplifying assumptions:

Accepted Answer

A)   is highly complex and likely unworkable.
B)   excludes important predictive variables.
C)   is very helpful for solving tough, real-world problems.
D)   does not look like the real-world problem it is meant to address.
E)   provides simplified solutions to complex problems.F) C) and D)
G) A) and D)

Question 14

In the movie A Knight's Tale,three peasants win a jousting tournament and must decide whether they should enjoy most of their winnings now or use most of it for training to improve their future jousting performance.Use appropriate production possibilities frontiers (PPFs) and words to describe the investment trade-off they face.

Accepted Answer

This is a classic example of the trade...

Question 15

You have a comparative advantage in producing a good whenever:

Accepted Answer

A)   you enjoy producing that good.
B)   you can produce more of the good than someone else can using the same resources.
C)   your opportunity cost is constant.
D)   your opportunity cost of producing that good is lower than that of other producers.
E)   you have specific training in the production of that good.F) A) and E)
G) A) and D)

Question 16

When one producer can create more of a good than another producer using the same quantity of resources,the first producer has:

Accepted Answer

A)   a zero-sum game.
B)   gains from trade.
C)   an absolute advantage.
D)   a comparative advantage.
E)   increasing relative costs.F) B) and D)
G) C) and D)

Question 17

Think of the production possibilities frontier (PPF)  model.When society is producing the largest possible output from its resources,it is operating:

Accepted Answer

A)   inefficiently.
B)   efficiently.
C)   with no opportunity cost.
D)   inside (within)  the PPF.
E)   beyond its opportunity cost.F) B) and C)
G) A) and C)

Question 18

Variables that are not accounted for in a model are called:

Accepted Answer

A)   endogenous factors.
B)   exogenous factors.
C)   normative statements.
D)   positive statements.
E)   the scientific method.F) A) and B)
G) None of the above

Question 19

The figures below depict the production possibilities frontiers (PPFs)  for two people who can allocate the same amount of time between making pizzas and making stromboli. Refer to these figures to answer the next three questions.
 
-What is Pam's opportunity cost of making 1 stromboli?

Accepted Answer

A)   30 pizzas
B)   20 stromboli
C)   2 pizzas
D)   1.5 pizzas
E)   2/3 pizzaF) B) and C)
G) B) and D)

Question 20

The figures below depict the production possibilities frontiers (PPFs)  for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the next two questions.
 
-What is DiNozzo's opportunity cost for solving a crime?

Accepted Answer

A)   20 solved crimes
B)   30 solved crimes
C)   5 solved crimes
D)   1/20 of a boat
E)   1/10 of a boatF) A) and E)
G) C) and D)

Exam 2: Model Building and Gains From Trade

Think of the production possibilities frontier (PPF) model.When society is producing the largest possible output from its resources,it is operating:

Correct Answer
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Ceteris paribus,if a society is producing at a point on the production possibilities frontier (PPF) ,it can only increase the production of one good by:

Correct Answer
verified

Is there an opportunity cost to increased investment in capital goods today?

Correct Answer
verified

Michael and Angelo are both artists who can create sculptures or paintings each day. The following table describes their maximum outputs per day. Use this table to answer the next four questions. -What is Angelo's opportunity cost of a painting?

Correct Answer
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Correct Answer
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This is a classic example of the trade...
View Answer

Refer to the following figure to answer the next four questions. -Which of the following represents a point that is unattainable with current resources and technology?

Correct Answer
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Refer to the following figures to answer the next two questions. -Which allocation point in the short-run production possibilities frontier (PPF) will lead to the most significant growth in the long-run PPF?

Correct Answer
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Which of the following is a positive statement?

Correct Answer
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The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the next two questions. -What is DiNozzo's opportunity cost for solving a crime?

Correct Answer
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Goods that are produced today in order to make other valuable goods and services in the future are called:

Correct Answer
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Michael and Angelo are both artists who can create sculptures or paintings each day. The following table describes their maximum outputs per day. Use this table to answer the next four questions. -What is Michael's opportunity cost of a sculpture?

Correct Answer
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A model without any simplifying assumptions:

Correct Answer
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You have a comparative advantage in producing a good whenever:

Correct Answer
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Refer to the following figure for the next two questions. -Economic growth can be depicted on a production possibilities frontier (PPF) as an:

Correct Answer
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When one producer can create more of a good than another producer using the same quantity of resources,the first producer has:

Correct Answer
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Refer to the accompanying figure to answer the next four questions. -Given your current resources,you would need even more hours in each day in order to attain:

Correct Answer
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The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between making pizzas and making stromboli. Refer to these figures to answer the next three questions. -What is Pam's opportunity cost of making 1 stromboli?

Correct Answer
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When one producer has a comparative advantage in production,she:

Correct Answer
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Variables that are not accounted for in a model are called:

Correct Answer
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A graph that shows the maximum attainable combinations of two goods when society efficiently uses its productive resources is called:

Correct Answer
verified

Exam 2: Model Building and Gains From Trade

Think of the production possibilities frontier (PPF) model.When society is producing the largest possible output from its resources,it is operating:

Correct AnswerverifiedShow Answer

Ceteris paribus,if a society is producing at a point on the production possibilities frontier (PPF) ,it can only increase the production of one good by:

Correct AnswerverifiedShow Answer

Is there an opportunity cost to increased investment in capital goods today?

Correct AnswerverifiedShow Answer

Michael and Angelo are both artists who can create sculptures or paintings each day. The following table describes their maximum outputs per day. Use this table to answer the next four questions. -What is Angelo's opportunity cost of a painting?

Correct AnswerverifiedShow Answer

Correct Answerverified This is a classic example of the trade...View AnswerShow Answer

Refer to the following figure to answer the next four questions. -Which of the following represents a point that is unattainable with current resources and technology?

Correct AnswerverifiedShow Answer

Refer to the following figures to answer the next two questions. -Which allocation point in the short-run production possibilities frontier (PPF) will lead to the most significant growth in the long-run PPF?

Correct AnswerverifiedShow Answer

Which of the following is a positive statement?

Correct AnswerverifiedShow Answer

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the next two questions. -What is DiNozzo's opportunity cost for solving a crime?

Correct AnswerverifiedShow Answer

Goods that are produced today in order to make other valuable goods and services in the future are called:

Correct AnswerverifiedShow Answer

Michael and Angelo are both artists who can create sculptures or paintings each day. The following table describes their maximum outputs per day. Use this table to answer the next four questions. -What is Michael's opportunity cost of a sculpture?

Correct AnswerverifiedShow Answer

A model without any simplifying assumptions:

Correct AnswerverifiedShow Answer

You have a comparative advantage in producing a good whenever:

Correct AnswerverifiedShow Answer

Refer to the following figure for the next two questions. -Economic growth can be depicted on a production possibilities frontier (PPF) as an:

Correct AnswerverifiedShow Answer

When one producer can create more of a good than another producer using the same quantity of resources,the first producer has:

Correct AnswerverifiedShow Answer

Refer to the accompanying figure to answer the next four questions. -Given your current resources,you would need even more hours in each day in order to attain:

Correct AnswerverifiedShow Answer

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between making pizzas and making stromboli. Refer to these figures to answer the next three questions. -What is Pam's opportunity cost of making 1 stromboli?

Correct AnswerverifiedShow Answer

When one producer has a comparative advantage in production,she:

Correct AnswerverifiedShow Answer

Variables that are not accounted for in a model are called:

Correct AnswerverifiedShow Answer

A graph that shows the maximum attainable combinations of two goods when society efficiently uses its productive resources is called:

Correct AnswerverifiedShow Answer

Correct Answer
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This is a classic example of the trade...
View Answer

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