Question 1

Exhibit 2-4
 
-Refer to Exhibit 2-4.The line joining points A and D is called the

Accepted Answer

A)   production function frontier.
B)   utility function.
C)   production possibilities frontier.
D)   demand curve.E) A) and B)
F) A) and C)

Question 2

The law of increasing opportunity cost helps to explain why PPF's are typically bowed-outward.

Accepted Answer

A) True 
 B)False

Question 3

The economy moves from point A,where it produces 100X and 200Y,to point B,where it produces 200X and 150Y.It follows that

Accepted Answer

A)   point A is a productive inefficient point.
B)   point A may be a productive inefficient point.
C)   point A may be a productive efficient point.
D)   point B is a productive efficient point.
E)   b and cF) B) and E)
G) A) and B)

Question 4

Exhibit 2-3
 
-Refer to Exhibit 2-3.If PPF? is the relevant production possibilities frontier,society can choose points that lie only

Accepted Answer

A)   below PPF1.
B)   below or on PPF1.
C)   on PPF2.
D)   none of the aboveE) B) and C)
F) A) and B)

Question 5

Exhibit 2-6
 
-Refer to Exhibit 2-6.Which graph depicts a discovery of a new cheap source of energy that assists in the production of both good X and good Y?

Accepted Answer

A)   (1) 
B)   (2) 
C)   (3) 
D)   (4) 
E)   none of the aboveF) A) and D)
G) A) and E)

Question 6

In a PPF graph of goods X and Y,points that lie beyond (to the right of)the PPF represent combinations of the two goods that are currently unattainable.

Accepted Answer

A) True 
 B)False

Question 7

Consider two straight-line PPFs.They have the same vertical intercept,but curve I is flatter than curve II.The opportunity cost of producing the good on the vertical axis

Accepted Answer

A)   is greater along curve I.
B)   is greater along curve II.
C)   is the same along both curves.
D)   cannot be compared for the two curves without more information.E) All of the above
F) A) and D)

Question 8

A society is productive inefficient when

Accepted Answer

A)   it produces at a point inside or below its PPF.
B)   it does not produce the maximum output with its given resources and technology.
C)   it can produce more of one good without giving up some of another good.
D)   both a and b
E)   all of the aboveF) D) and E)
G) C) and D)

Question 9

A decrease in the quantity of resources

Accepted Answer

A)   shifts the PPF leftward.
B)   shifts the PPF rightward.
C)   moves the economy up a given PPF.
D)   moves the economy down a given PPF.E) All of the above
F) A) and B)

Question 10

If there is always a 4-for-1 tradeoff between producing good X and good Y,it follows that the opportunity cost of X (in terms of Y) ____________________ and the PPF for these two goods is ______________________.

Accepted Answer

A)   decreases at low levels of X; a straight line
B)   rises at high levels of Y; bowed-outward
C)   decreases at high levels of X; bowed-outward
D)   is always the same; a straight lineE) All of the above
F) B) and C)

Question 11

An economy is productive efficient if it produces

Accepted Answer

A)   more than enough food to feed everyone.
B)   more goods and services in each successive year.
C)   maximum output with given resources and technology.
D)   enough output so that no one lives in poverty.E) A) and B)
F) A) and C)

Question 12

Exhibit 2-4
 
-Refer to Exhibit 2-4.This economy is productive

Accepted Answer

A)   efficient, if it operates at point B or C.
B)   efficient, if it operates at point A or D.
C)   inefficient, if it operates at point A or D.
D)   inefficient regardless of the particular point.
E)   both a and bF) B) and D)
G) C) and D)

Exam 2: Production Possibilities Frontier Framework

Exhibit 2-3 -Refer to Exhibit 2-3.If PPF? is the relevant production possibilities frontier,society can choose points that lie only

Correct Answer
verified

In a PPF graph of goods X and Y,points that lie beyond (to the right of)the PPF represent combinations of the two goods that are currently unattainable.

Correct Answer
verified

The law of increasing opportunity cost helps to explain why PPF's are typically bowed-outward.

Correct Answer
verified

A decrease in the quantity of resources

Correct Answer
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Exhibit 2-6 -Refer to Exhibit 2-6.Which graph depicts a discovery of a new cheap source of energy that assists in the production of both good X and good Y?

Correct Answer
verified

Exhibit 2-4 -Refer to Exhibit 2-4.The line joining points A and D is called the

Correct Answer
verified

Exhibit 2-4 -Refer to Exhibit 2-4.This economy is productive

Correct Answer
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An economy is productive efficient if it produces

Correct Answer
verified

Consider two straight-line PPFs.They have the same vertical intercept,but curve I is flatter than curve II.The opportunity cost of producing the good on the vertical axis

Correct Answer
verified

A society is productive inefficient when

Correct Answer
verified

If there is always a 4-for-1 tradeoff between producing good X and good Y,it follows that the opportunity cost of X (in terms of Y) and the PPF for these two goods is __.

Correct Answer
verified

The economy moves from point A,where it produces 100X and 200Y,to point B,where it produces 200X and 150Y.It follows that

Correct Answer
verified

Exam 2: Production Possibilities Frontier Framework

Exhibit 2-3 -Refer to Exhibit 2-3.If PPF? is the relevant production possibilities frontier,society can choose points that lie only

Correct AnswerverifiedShow Answer

In a PPF graph of goods X and Y,points that lie beyond (to the right of)the PPF represent combinations of the two goods that are currently unattainable.

Correct AnswerverifiedShow Answer

The law of increasing opportunity cost helps to explain why PPF's are typically bowed-outward.

Correct AnswerverifiedShow Answer

A decrease in the quantity of resources

Correct AnswerverifiedShow Answer

Exhibit 2-6 -Refer to Exhibit 2-6.Which graph depicts a discovery of a new cheap source of energy that assists in the production of both good X and good Y?

Correct AnswerverifiedShow Answer

Exhibit 2-4 -Refer to Exhibit 2-4.The line joining points A and D is called the

Correct AnswerverifiedShow Answer

Exhibit 2-4 -Refer to Exhibit 2-4.This economy is productive

Correct AnswerverifiedShow Answer

An economy is productive efficient if it produces

Correct AnswerverifiedShow Answer

Consider two straight-line PPFs.They have the same vertical intercept,but curve I is flatter than curve II.The opportunity cost of producing the good on the vertical axis

Correct AnswerverifiedShow Answer

A society is productive inefficient when

Correct AnswerverifiedShow Answer

If there is always a 4-for-1 tradeoff between producing good X and good Y,it follows that the opportunity cost of X (in terms of Y) ____________________ and the PPF for these two goods is ______________________.

Correct AnswerverifiedShow Answer

The economy moves from point A,where it produces 100X and 200Y,to point B,where it produces 200X and 150Y.It follows that

Correct AnswerverifiedShow Answer

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If there is always a 4-for-1 tradeoff between producing good X and good Y,it follows that the opportunity cost of X (in terms of Y) and the PPF for these two goods is __.

Correct Answer
verified

Correct Answer
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