Question 1

Increases in resources or improvements in technology will tend to cause a society's production possibility frontier to:
A.shift inward to the left.
B.shift outward to the right.
C.remain unchanged.
D.become vertical.

Accepted Answer

The answer of Increases in resources or improvements in technology...

Question 2

As long as people have different , everyone has a comparative advantage in
something.
A.direct costs
B.benefits
C.utility
D.opportunity costs

Accepted Answer

Comparative advantage is based on opportunity costs, which are the benefits forgone by choosing one option over another. Therefore, as long as people have different opportunity costs, each person will have a comparative advantage in something. Direct costs (A) and benefits (B) do not factor into comparative advantage, and while utility (C) can influence decision-making, it is not the basis for comparative advantage.

Question 3

(Table: Production Possibilities Schedule II) Look at the table Production Possibilities Schedule II.The production of 8 units of consumer goods and 2 units of capital goods per period would:
A.result in full employment.
B.result in no unused resources.
C.result in some unused or inefficiently used resources.
D.increase economic growth.

Accepted Answer

The answer of (Table: Production Possibilities Schedule II) Look at...

Question 4

The process observed when an economy's production possibility frontier is shifted outward is:
A.comparative advantage.
B.economic growth.
C.full employment.
D.specialization.

Accepted Answer

The answer of The process observed when an economy's production...

Question 5

Figure: Bicycles and Radishes II
   (Figure: Bicycles and Radishes II) Look at the figure Bicycles and Radishes II.The country depicted in this figure is operating at point M.It could achieve production at point I only if it: 
A.used its resources more efficiently.
B.devoted more resources to radish production.
C.devoted more resources to bicycle production.
D.increased the quantities of capital, natural resources, or labor available or improved its technology.

Accepted Answer

The answer of Figure: Bicycles and Radishes II
  ...

Question 6

Abe starts exercising regularly, and after a few months he can do twice as much of everything-in a single day Abe can now make 10 hamburgers or 8 milkshakes rather than the 5 hamburgers and 4 milkshakes he made in the past.We now know that Abe's production possibility frontier:
A.has shifted right, but his opportunity costs of making milkshakes are unchanged.
B.has shifted right, but his opportunity costs of making milkshakes have decreased.
C.has not changed, but his opportunity costs of making milkshakes have increased.
D.has not changed, but his opportunity costs of making milkshakes have decreased.

Accepted Answer

The answer of Abe starts exercising regularly, and after a...

Question 7

Figure: Consumer and Capital Goods
   (Figure: Consumer and Capital Goods) Look at the figure Consumer and Capital Goods.If the economy is operating at point Y and its relevant production possibility frontier is curve 1, this means that: 
A.the economy is at full employment and is efficient.
B.the economy is less than fully employed.
C.the economy is not efficient.
D.economic growth is not possible in the future.

Accepted Answer

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

Question 8

Figure: Strawberries and Submarines II
   (Figure: Strawberries and Submarines II) Look at the figure Strawberries and Submarines II.Assume that the economy is now operating at point 
A.The opportunity cost of moving to point C is equal to million tons of strawberries:
A.800
B.200
C.2
D.50

Accepted Answer

The answer of Figure: Strawberries and Submarines II
  ...

Question 9

Figure: Strawberries and Submarines II
  (Figure: Strawberries and Submarines II) Look at the figure Strawberries and Submarines II.Suppose the economy is now operating at point 
A.The first submarine, which is achieved at point B, would have an opportunity cost of million tons of strawberries.
A.50
B.150
C.400
D.950

Accepted Answer

The answer of Figure: Strawberries and Submarines II
  (Figure:...

Question 10

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 11

Assume an economy is operating on its production possibility frontier, which shows the production of military and civilian goods.If the output of military goods is increased, the output of civilian goods:
A.will increase, too.
B.will not change.
C.must decrease.
D.may increase or decrease.

Accepted Answer

If the economy is already operating on its production possibility frontier, then any increase in the production of one good requires a decrease in the production of the other good, since resources are limited. Therefore, if the output of military goods is increased, the output of civilian goods must decrease in order to remain on the production possibility frontier.

Question 12

Figure: Strawberries and Submarines II
(Figure: Strawberries and Submarines II) Look at the figure Strawberries and Submarines II.The downward slope of the production possibility frontier implies that resources:
A.must be used efficiently.
B.are scarce.
C.should not be wasted.
D.should be allocated so that approximately equal amounts of both goods are produced.

Accepted Answer

The answer of Figure: Strawberries and Submarines II
(Figure: Strawberries and...

Question 13

(Table: Production Possibilities Schedule II) Look at the table Production Possibilities Schedule II.If an economy is producing at alternative X, the opportunity cost to it of producing at Y is units of consumer goods per period.
A.2
B.1
C.6
D.18

Accepted Answer

The answer of (Table: Production Possibilities Schedule II) Look at...

Question 14

When a nation experiences economic growth:
A.its production possibility frontier shifts outward.
B.its production possibility frontier shifts inward.
C.it has been able to reach full employment.
D.it has moved to a more consumer-oriented position on its production possibility frontier.

Accepted Answer

The answer of When a nation experiences economic growth:
A.its production...

Question 15

Efficient production exists when the economy is:
A.operating underneath its production possibility frontier.
B.operating on its production possibility frontier.
C.operating outside its production possibility frontier.
D.moving beyond its production possibility frontier.

Accepted Answer

The answer of Efficient production exists when the economy is:
A.operating...

Question 16

Figure: Consumer and Capital Goods
  (Figure: Consumer and Capital Goods) Look at the figure Consumer and Capital Goods.Technological improvements will likely: 
A.shift the production possibility frontier inward to curve
B.1.shift the production possibility frontier outward to curve 2.
C.lead to increased unemployment.
D.leave the production possibility frontier unchanged.

Accepted Answer

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

Question 17

Figure: Strawberries and Submarines II
(Figure: Strawberries and Submarines II) Look at the figure Strawberries and Submarines II.Point F:
A.is unattainable, all other things unchanged.
B.is attainable if the quantity and/or quality of factors
C.decreases.is attainable if the economy is able to reach
D.full employment.is feasible but not efficient.

Accepted Answer

The answer of Figure: Strawberries and Submarines II
(Figure: Strawberries and...

Question 18

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.a growing ability of the economy to produce capital and consumer goods.
B.going from unemployment to full employment.
C.a decrease in the factors of production.
D.a shift of the production possibility frontier toward producing fewer goods.

Accepted Answer

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

Question 19

Because of trade, a country may:
A.consume outside its production possibility frontier.
B.consume inside its production possibility frontier.
C.find that its production possibility frontier will shift outward.
D.avoid opportunity costs.

Accepted Answer

The answer of Because of trade, a country may:
A.consume outside...

Question 20

(Table: Production Possibilities Schedule II) Look at the table Production Possibilities Schedule II.If the economy is producing at alternative Y, the opportunity cost to it of producing at Z is units of consumer goods per period.
A.1
B.6
C.8
D.14

Accepted Answer

The answer of (Table: Production Possibilities Schedule II) Look at...

Quiz 1: First Principles

Increases in resources or improvements in technology will tend to cause a society's production possibility frontier to: A.shift inward to the left. B.shift outward to the right. C.remain unchanged. D.become vertical.

As long as people have different , everyone has a comparative advantage in something. A.direct costs B.benefits C.utility D.opportunity costs

The process observed when an economy's production possibility frontier is shifted outward is: A.comparative advantage. B.economic growth. C.full employment. D.specialization.

Figure: Strawberries and Submarines II (Figure: Strawberries and Submarines II) Look at the figure Strawberries and Submarines II.Assume that the economy is now operating at point A.The opportunity cost of moving to point C is equal to million tons of strawberries: A.800 B.200 C.2 D.50

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.

Assume an economy is operating on its production possibility frontier, which shows the production of military and civilian goods.If the output of military goods is increased, the output of civilian goods: A.will increase, too. B.will not change. C.must decrease. D.may increase or decrease.

(Table: Production Possibilities Schedule II) Look at the table Production Possibilities Schedule II.If an economy is producing at alternative X, the opportunity cost to it of producing at Y is units of consumer goods per period. A.2 B.1 C.6 D.18

When a nation experiences economic growth: A.its production possibility frontier shifts outward. B.its production possibility frontier shifts inward. C.it has been able to reach full employment. D.it has moved to a more consumer-oriented position on its production possibility frontier.

Efficient production exists when the economy is: A.operating underneath its production possibility frontier. B.operating on its production possibility frontier. C.operating outside its production possibility frontier. D.moving beyond its production possibility frontier.

Because of trade, a country may: A.consume outside its production possibility frontier. B.consume inside its production possibility frontier. C.find that its production possibility frontier will shift outward. D.avoid opportunity costs.

(Table: Production Possibilities Schedule II) Look at the table Production Possibilities Schedule II.If the economy is producing at alternative Y, the opportunity cost to it of producing at Z is units of consumer goods per period. A.1 B.6 C.8 D.14