Question 1

Figure: Consumer and Capital Goods
   (Figure: Consumer and Capital Goods) Look at the figure Consumer and Capital Goods.The movement from curve 1 to curve 2 indicates: 
A.economic growth.
B.a change from unemployment to full employment.
C.a decrease in the level of technology.
D.instability.

Accepted Answer

The answer of Figure: Consumer and Capital Goods
  ...

Question 2

Suppose the state of Oklahoma decides to produce only two goods, oil and football helmets.According to the production possibility frontier, as oil production increases, the production of football helmets will:
A.increase.
B.not change.
C.decrease at a decreasing rate.
D.decrease.

Accepted Answer

The answer of Suppose the state of Oklahoma decides to...

Question 3

All points on the production possibility frontier are:
A.efficient production points.
B.inefficient production points.
C.infeasible production points.
D.economic growth.

Accepted Answer

The answer of All points on the production possibility frontier...

Question 4

Figure: Production Possibility Frontier Curve for Tealand
  (Figure: Production Possibility Frontier for Tealand) Look at the figure Production Possibility Frontier for Tealand.In the figure, Tealand can produce at point E only if the government: 
A.eliminates unemployment.
B.raises taxes.
C.permits more immigration.
D.increases the cost of production by decreasing the use of technology.

Accepted Answer

The answer of Figure: Production Possibility Frontier Curve for Tealand
...

Question 5

Figure: Consumer and Capital Goods
  (Figure: Consumer and Capital Goods) Look at the figure Consumer and Capital Goods.Point
Z: 
A.is unattainable, all other things unchanged.
B.is attainable if the economy is able to reach full employment.
C.is attainable if the quantity and/or quality of factors decreases.
D.will be attained as soon as the economy becomes efficient and moves to curve 2.

Accepted Answer

The answer of Figure: Consumer and Capital Goods
  (Figure:...

Question 6

Figure: Production Possibility Frontier Curve for Tealand
(Figure: Production Possibility Frontier for Tealand) Look at the figure Production Possibility Frontier for Tealand.In the figure, if Tealand is producing 10 million scones and 10 million cups of tea (point A), we know that the economy:
A.is using its resources efficiently.
B.is using its resources inefficiently.
C.is fully employing its resources.
D.has found new resources.

Accepted Answer

The answer of Figure: Production Possibility Frontier Curve for Tealand
(Figure:...

Question 7

If an economy is producing a level of output that is on its production possibility frontier, the economy has:
A.idle resources.
B.idle resources but is using resources efficiently.
C.no idle resources but is using resources inefficiently.
D.no idle resources and is using resources efficiently.

Accepted Answer

When an economy is producing at a level of output that is on its production possibility frontier, it means that it is utilizing all of its available resources efficiently and there are no idle resources. Therefore, the correct answer is D.

Question 8

The opportunity cost of production:
A.is the price of a good.
B.is what you give up to produce the good.
C.decreases as production increases.
D.is what you gain by producing the good.

Accepted Answer

The opportunity cost of production is the cost of the next best alternative forgone. It is the value of the next best alternative that must be given up in order to pursue a certain action, in this case, producing a good. Therefore, the correct answer is B, which states that it is what you give up to produce the good. A, C, and D are incorrect as they do not accurately define the concept of opportunity cost.

Question 9

The production possibility frontier is bowed out from the origin because:
A.resources are not equally suited for the production of both goods.
B.resources are scarce.
C.economic growth leads to inefficiency.
D.resources are inefficiently used.

Accepted Answer

The answer of The production possibility frontier is bowed out...

Question 10

All points outside the production possibility frontier are:
A)efficient production points.
B)inefficient production points.
C)infeasible production points.
D)economic growth.

Accepted Answer

Production points outside the PPF are infeasible because they cannot be produced with the given resources and technology.

Question 11

Figure: Production Possibility Frontier Curve for Tealand
   (Figure: Production Possibility Frontier for Tealand) Look at the figure Production Possibility Frontier for Tealand.In the figure, Tealand is producing at point C on its production possibility frontier.What is the opportunity cost in Tealand of increasing the production of tea from 20
million cups to 30 million cups? 
A.10 million cups of tea
B.5 million scones
C.10 million scones
D.The answer is impossible to determine from the information given.

Accepted Answer

The answer of Figure: Production Possibility Frontier Curve for Tealand
...

Question 12

One of the controversies surrounding America's energy markets is the trade-off between energy production and clean air.Assuming clean air has value, the United States will be on its production possibility frontier if and only if:
A.resources used to produce clean air and energy are not being fully utilized.
B.pollution is eliminated.
C.the price of energy is relatively low.
D.resources used to produce clean air and energy are being fully utilized.

Accepted Answer

The answer of One of the controversies surrounding America's energy...

Question 13

The production possibility frontier will shift outward for which of the following reasons?
A)a decrease in the labor force
B)an upgrade of capital to the best available technology
C)better technology that improves worker productivity
D)a decrease in the unemployment rate

Accepted Answer

The answer of The production possibility frontier will shift outward...

Question 14

The economy's factors of production are not equally suitable for producing different types of goods.This principle generates:
A.economic growth.
B.technical efficiency.underuse of
C.resources.
D.the law of increasing opportunity cost.

Accepted Answer

The answer of The economy's factors of production are not...

Question 15

Technological improvements will:
A.leave the production possibility frontier unchanged.
B.shift the production possibility frontier inward.
C.shift the production possibility frontier outward.
D.necessarily lead to increased unemployment.

Accepted Answer

Technological improvements enable firms to produce more output with the same inputs or to produce output with fewer inputs. Thus, the economy's production capacity increases, leading to a shift in the production possibility frontier outward. This means that the economy can now produce more goods and services than before, leading to potential economic growth. It does not necessarily lead to increased unemployment as firms may hire more workers to produce the additional output generated by technological improvements.

Question 16

If Poland decides to increase the production of steel-and decrease the production of vodka-the bowed-out production possibility frontier would suggest that there will be
________ opportunity cost of producing more steel.
A.an increasing
B.a decreasing
C.a nonexistent
D.an unchanged

Accepted Answer

The answer of If Poland decides to increase the production...

Question 17

All points inside the production possibility frontier represent:
A)efficient production points.
B)inefficient production points.
C)infeasible production
D)points.economic growth.

Accepted Answer

The answer of All points inside the production possibility frontier...

Question 18

If an economy is producing at a point on its production possibilities frontier:
A)it is efficient in production and allocation.
B)it is efficient in production but not necessarily in allocation.
C)it is efficient in allocation but not necessarily in
D)production.it is not necessarily efficient in production or allocation.

Accepted Answer

Producing on the production possibilities frontier means the economy is efficient in production, as it is using all available resources. However, it does not necessarily mean that the allocation of resources is efficient in terms of meeting consumer preferences.

Question 19

(Figure: Strawberries and Submarines) Look at the figure Strawberries and Submarines.As the economy moves from point A toward point D, it will find that the opportunity cost of each additional submarine: 
A.falls.
B.rises.
C.remains unchanged.

Accepted Answer

The answer of   (Figure: Strawberries and Submarines) Look...

Question 20

Consider a production possibility frontier for Iraq.If in 2014 Iraq's resources are not being fully utilized, Iraq will be somewhere of its production possibility frontier.
A.inside
B.outside
C.near the bottom near
D.the top

Accepted Answer

The answer of Consider a production possibility frontier for Iraq.If...

Quiz 1: First Principles

Figure: Consumer and Capital Goods (Figure: Consumer and Capital Goods) Look at the figure Consumer and Capital Goods.The movement from curve 1 to curve 2 indicates: A.economic growth. B.a change from unemployment to full employment. C.a decrease in the level of technology. D.instability.

Suppose the state of Oklahoma decides to produce only two goods, oil and football helmets.According to the production possibility frontier, as oil production increases, the production of football helmets will: A.increase. B.not change. C.decrease at a decreasing rate. D.decrease.

All points on the production possibility frontier are: A.efficient production points. B.inefficient production points. C.infeasible production points. D.economic growth.

If an economy is producing a level of output that is on its production possibility frontier, the economy has: A.idle resources. B.idle resources but is using resources efficiently. C.no idle resources but is using resources inefficiently. D.no idle resources and is using resources efficiently.

The opportunity cost of production: A.is the price of a good. B.is what you give up to produce the good. C.decreases as production increases. D.is what you gain by producing the good.

The production possibility frontier is bowed out from the origin because: A.resources are not equally suited for the production of both goods. B.resources are scarce. C.economic growth leads to inefficiency. D.resources are inefficiently used.

All points outside the production possibility frontier are:

The production possibility frontier will shift outward for which of the following reasons?

The economy's factors of production are not equally suitable for producing different types of goods.This principle generates: A.economic growth. B.technical efficiency.underuse of C.resources. D.the law of increasing opportunity cost.

Technological improvements will: A.leave the production possibility frontier unchanged. B.shift the production possibility frontier inward. C.shift the production possibility frontier outward. D.necessarily lead to increased unemployment.

If Poland decides to increase the production of steel-and decrease the production of vodka-the bowed-out production possibility frontier would suggest that there will be ________ opportunity cost of producing more steel. A.an increasing B.a decreasing C.a nonexistent D.an unchanged

All points inside the production possibility frontier represent:

If an economy is producing at a point on its production possibilities frontier:

(Figure: Strawberries and Submarines) Look at the figure Strawberries and Submarines.As the economy moves from point A toward point D, it will find that the opportunity cost of each additional submarine: A.falls. B.rises. C.remains unchanged.

Consider a production possibility frontier for Iraq.If in 2014 Iraq's resources are not being fully utilized, Iraq will be somewhere of its production possibility frontier. A.inside B.outside C.near the bottom near D.the top