Deck 3: 1: Sec 31 Mc a Parable for the Modern Economy

Question 1

Tom produces baseball gloves and baseball bats.Steve also produces baseball gloves and baseball bats,but Tom is better at producing both goods.In this case,trade could

A)benefit both Steve and Tom.
B)benefit Steve,but not Tom.
C)benefit Tom,but not Steve.
D)benefit neither Steve nor Tom.

Answer 1

D

Question 2

A production possibilities frontier is a straight line when

A)the more resources the economy uses to produce one good,the fewer resources it has available to produce the other good.
B)an economy is interdependent and engaged in trade instead of self-sufficient.
C)the rate of tradeoff between the two goods being produced is constant.
D)the rate of tradeoff between the two goods being produced depends on how much of each good is being produced.

Answer 2

B

Question 3

A production possibilities frontier is bowed outward when

A)the more resources the economy uses to produce one good,the fewer resources it has available to produce the other good.
B)an economy is self-sufficient instead of interdependent and engaged in trade.
C)the rate of tradeoff between the two goods being produced is constant.
D)the rate of tradeoff between the two goods being produced depends on how much of each good is being produced.

Answer 3

D

Question 4

Consider two individuals - Marquis and Serena - each of whom would like to wear sweaters and eat tasty food.The gains from trade between Marquis and Serena are most obvious in which of the following cases?

A)Marquis is very good at knitting sweaters and at cooking tasty food,but Serena's skills in both of these activities are very poor.
B)Marquis and Serena both are very good at cooking tasty food,but neither has the necessary skills to knit a sweater.
C)Marquis's cooking and knitting skills are very poor,and Serena's cooking and knitting skills are also very poor.
D)Marquis's skills are such that he can produce only sweaters,and Serena's skills are such that she can produce only tasty food.

Question 5

For a self-sufficient producer,the production possibilities frontier

A)is the same as the consumption possibilities frontier.
B)is greater than the consumption possibilities frontier.
C)is less than the consumption possibilities frontier.
D)is always a straight line.

Question 6

An economy's production possibilities frontier is also its consumption possibilities frontier

A)under all circumstances.
B)under no circumstances.
C)when the economy is self-sufficient.
D)when the rate of tradeoff between the two goods being produced is constant.

Question 7

Olivia bakes cakes and Andrew grows corn.Olivia and Andrew both like to eat cake and eat corn.In which of the following cases is it impossible for both Olivia and Andrew to benefit from trade?

A)Olivia cannot grow corn and Andrew cannot bake cakes.
B)Olivia is better than Andrew at baking cakes and Andrew is better than Olivia at growing corn.
C)Olivia is better than Andrew at baking cakes and at growing corn.
D)Both Olivia and Andrew can benefit from trade in all of the above cases.

Question 8

Figure 3-2
Brazil's Production Possibilities Frontier
Refer to Figure 3-2.The fact that the line slopes downward reflects the fact that

A)for Brazil,it is more costly to produce peanuts than it is to produce cashews.
B)Brazil will produce more peanuts and fewer cashews as time goes by.
C)Brazil faces a tradeoff between producing peanuts and producing cashews.
D)Brazil should specialize in producing cashews.

Question 9

Consider two individuals - Howard and Mai - each of whom would like to wear sweaters and eat tasty food.The gains from trade between Howard and Mai are least obvious in which of the following cases?

A)Howard is very good at knitting sweaters and at cooking tasty food,but Mai's skills in both of these activities are very poor.
B)Howard is very good at knitting sweaters and at cooking tasty food;Mai is very good at knitting sweaters,but she knows nothing about cooking tasty food.
C)Howard's skills in knitting sweaters are fairly good,but his skills in cooking tasty food are fairly bad;Mai's skills in knitting sweaters are fairly bad,but her skills in cooking tasty food are fairly good.
D)Howard's skills are such that he can produce only sweaters,and Mai's skills are such that she can produce only tasty food.

Question 10

A professor spends 10 hours per day giving lectures and writing papers.For the professor,a graph that shows his various possible mixes of output (lectures given per day and papers written per day)is called his

A)line of tastes.
B)trade-off curve.
C)production possibilities frontier.
D)consumption possibilities frontier.

Question 11

When can two countries gain from trading two goods?

A)when the first country can only produce the first good and the second country can only produce the second good
B)when the first country can produce both goods,but can only produce the second good at great cost,and the second country can produce both goods,but can only produce the first good at great cost
C)when the first country is better at producing both goods and the second country is worse at producing both goods
D)Two countries could gain from trading two goods under all of the above conditions.

Question 12

Which of the following is not a reason people choose to depend on others for goods and services?

A)to improve their lives
B)to allow them to enjoy a greater variety of goods and services
C)to consume more of each good without working any more hours
D)to allow people to produce outside their production possibilities frontiers

Question 13

The production possibilities frontier illustrates

A)the combinations of output that an economy should produce.
B)the combinations of output that an economy should consume.
C)the combinations of output that an economy can produce.
D)All of the above are correct.

Question 14

As a student,Anne spends 40 hours per week writing term papers and completing homework assignments.On one axis of her production possibilities frontier is measured the number of term papers written per week.On the other axis is measured the number of homework assignments completed per week.Anne's production possibilities frontier is a straight line if

A)she faces no trade-off between writing term papers and completing homework assignments.
B)she can switch between writing term papers and completing homework assignments at a constant rate.
C)the rate at which she can switch between homework assignments and term papers depends on the number of homework assignments she is completing and on the number of term papers she is writing.
D)she is required by her professors to spend half of her time on term papers and the other half of her time on homework assignments.

Question 15

The most obvious benefit of specialization and trade is that they allow us to

A)work more hours per week than we otherwise would be able to work.
B)consume more goods than we otherwise would be able to consume.
C)spend more money on goods that are beneficial to society,and less money on goods that are harmful to society.
D)consume more goods by forcing people in other countries to consume fewer goods.

Question 16

Figure 3-2
Brazil's Production Possibilities Frontier
Refer to Figure 3-2.If the production possibilities frontier shown is for 24 hours of production,then how long does it take Brazil to make one peanut?

A)1/10 hour
B)1/3 hour
C)3 hours
D)10 hours

Question 17

Figure 3-1
Panel (a)
Panel (b)
Refer to Figure 3-1.The rate of tradeoff between producing chairs and producing couches depends on how many chairs and couches are being produced in

A)Panel (a).
B)Panel (b).
C)both Panel (a)and Panel (b).
D)neither Panel (a)nor Panel (b).

Question 18

Suppose there are only two people in the world.Each person's production possibilities frontier also represents his or her consumption possibilities when

A)neither person faces trade-offs.
B)the frontiers are straight lines.
C)the frontiers are bowed out.
D)they choose not to trade with one another.

Question 19

Abby bakes brownies and Liam grows flowers.In which of the following cases is it impossible for both Abby and Liam to benefit from trade?

A)Abby does not like flowers and Liam does not like brownies.
B)Abby is better than Liam at baking brownies and Liam is better than Abby at growing flowers.
C)Liam is better than Abby at baking brownies and at growing flowers.
D)Both Abby and Liam can benefit from trade in all of the above cases.

Question 20

Figure 3-1
Panel (a)
Panel (b)
Refer to Figure 3-1.The rate of tradeoff between producing chairs and producing couches is constant in

A)Panel (a).
B)Panel (b).
C)both Panel (a)and Panel (b).
D)neither Panel (a)nor Panel (b).

Question 21

Figure 3-5
Hosne's Production Possibilities Frontier
Merve's Production Possibilities Frontier
Refer to Figure 3-5.If Hosne and Merve each divides her time equally between making purses and making wallets,then total production is

A)4 purses and 8 wallets.
B)7 purses and 7 wallets.
C)10 purses and 6 wallets.
D)14 purses and 14 wallets.

Question 22

Figure 3-3
Arturo's Production Possibilities Frontier
Dina's Production Possibilities Frontier
Refer to Figure 3-3.If Dina must work 0.25 hour to produce each taco,then her production possibilities frontier is based on how many hours of work?

A)40 hours
B)100 hours
C)400 hours
D)1600 hours

Question 23

Figure 3-2
Brazil's Production Possibilities Frontier
Refer to Figure 3-2.If the production possibilities frontier shown is for two months of production,then which of the following combinations of peanuts and cashews could Brazil not produce in two months?

A)5 peanuts and 88 cashews
B)4 peanuts and 115 cashews
C)3 peanuts and 155 cashews
D)1 peanuts and 200 cashews

Question 24

Figure 3-6
Maxine's Production Possibilities Frontier
Daisy's Production Possibilities Frontier
Refer to Figure 3-6.If Daisy must work 2.5 hours to make each pie,then her production possibilities frontier is based on how many hours of work?

A)6 hours
B)7.5 hours
C)37.5 hours
D)50 hours

Question 25

Figure 3-4
Lisa's Production Possibilities Frontier
Bryce's Production Possibilities Frontier
Refer to Figure 3-4.If Lisa and Bryce both spend all of their time producing jackets,then total production is

A)2 jackets.
B)6 jackets.
C)24 jackets.
D)26 jackets.

Question 26

Figure 3-5
Hosne's Production Possibilities Frontier
Merve's Production Possibilities Frontier
Refer to Figure 3-5.If Hosne and Merve both spend all of their time making wallets,then total production is

A)7 wallets.
B)8 wallets.
C)14 wallets.
D)28 wallets.

Question 27

Figure 3-5
Hosne's Production Possibilities Frontier
Merve's Production Possibilities Frontier
Refer to Figure 3-5.If the production possibilities frontier shown for Merve is for 8 hours of work,then how long does it take Merve to make one purse?

A)1/2 hour
B)2 hours
C)4 hours
D)8 hours

Question 28

Figure 3-5
Hosne's Production Possibilities Frontier
Merve's Production Possibilities Frontier
Refer to Figure 3-5.If Hosne must work 0.5 hour to make each purse,then her production possibilities frontier is based on how many hours of work?

A)2 hours
B)5 hours
C)20 hours
D)50 hours

Question 29

Figure 3-4
Lisa's Production Possibilities Frontier
Bryce's Production Possibilities Frontier
Refer to Figure 3-4.If the production possibilities frontiers shown are each for one year of working,then which of the following combinations of jackets and sweaters could Lisa and Bryce together produce in a given year?

A)1 sweater and 22 jackets
B)2 sweaters and 20 jackets
C)4 sweaters and 12 jackets
D)5 sweaters and 7 jackets

Question 30

Figure 3-3
Arturo's Production Possibilities Frontier
Dina's Production Possibilities Frontier
Refer to Figure 3-3.If the production possibilities frontier shown for Arturo is for 100 hours of production,then how long does it take Arturo to make one burrito?

A)1/4 hour
B)1/3 hour
C)3 hours
D)4 hours

Question 31

Figure 3-4
Lisa's Production Possibilities Frontier
Bryce's Production Possibilities Frontier
Refer to Figure 3-4.If the production possibilities frontier shown for Lisa is for 4 months of work,then how long does it take Lisa to produce one jacket?

A)1/4 month
B)1/2 month
C)2 months
D)4 months

Question 32

Figure 3-4
Lisa's Production Possibilities Frontier
Bryce's Production Possibilities Frontier
Refer to Figure 3-4.If Lisa and Bryce each divides his or her time equally between producing jackets and producing sweaters,then total production is

A)2 sweaters and 8 jackets.
B)3 sweaters and 13 jackets.
C)5 sweaters and 8 jackets.
D)6 sweaters and 26 jackets.

Question 33

Figure 3-3
Arturo's Production Possibilities Frontier
Dina's Production Possibilities Frontier
Refer to Figure 3-3.If Arturo and Dina each divides his/her time equally between the production of tacos and burritos,then total production is

A)200 tacos and 150 burritos.
B)400 tacos and 250 burritos.
C)400 tacos and 300 burritos.
D)800 tacos and 500 burritos.

Question 34

Figure 3-3
Arturo's Production Possibilities Frontier
Dina's Production Possibilities Frontier
Refer to Figure 3-3.If the production possibilities frontiers shown are each for one day of production,then which of the following combinations of tacos and burritos could Arturo and Dina together not produce in a given day?

A)200 tacos and 400 burritos
B)300 tacos and 350 burritos
C)400 tacos and 300 burritos
D)600 tacos and 250 burritos

Question 35

Figure 3-4
Lisa's Production Possibilities Frontier
Bryce's Production Possibilities Frontier
Refer to Figure 3-4.If the production possibilities frontiers shown are each for one year of production,then which of the following combinations of sweaters and jackets could Lisa and Bryce together not produce in a given year?

A)1 sweater and 21 jackets
B)2 sweaters and 20 jackets
C)3 sweaters and 12 jackets
D)5 sweaters and 4 jackets

Question 36

Figure 3-2
Brazil's Production Possibilities Frontier
Refer to Figure 3-2.If the production possibilities frontier shown is for two months of production,then which of the following combinations of peanuts and cashews could Brazil produce in two months?

A)7 peanuts and 35 cashews
B)5 peanuts and 100 cashews
C)2 peanuts and 190 cashews
D)3 peanuts and 150 cashews

Question 37

Figure 3-3
Arturo's Production Possibilities Frontier
Dina's Production Possibilities Frontier
Refer to Figure 3-3.If Arturo and Dina both spend all of their time producing tacos,then total production is

A)400 tacos and 0 burritos.
B)400 tacos and 250 burritos.
C)800 tacos and 0 burritos.
D)800 tacos and 500 burritos.

Question 38

Figure 3-4
Lisa's Production Possibilities Frontier
Bryce's Production Possibilities Frontier
Refer to Figure 3-4.If Bryce must work 4 months to produce each sweater,then his production possibilities frontier is based on how many months of work?

A)4 months
B)8 months
C)12 months
D)16 months

Question 39

Figure 3-2
Brazil's Production Possibilities Frontier
Refer to Figure 3-2.If the production possibilities frontier shown is for 24 hours of production,then how long does it take Brazil to make one cashew?

A)1/10 hour
B)1/3 hour
C)3 hours
D)10 hours

Question 40

Figure 3-3
Arturo's Production Possibilities Frontier
Dina's Production Possibilities Frontier
Refer to Figure 3-3.If the production possibilities frontiers shown are each for one day of production,then which of the following combinations of tacos and burritos could Arturo and Dina together produce in a given day?

A)400 tacos and 350 burritos
B)500 tacos and 250 burritos
C)600 tacos and 150 burritos
D)700 tacos and 100 burritos

Question 41

A production possibilities frontier (PPF)is characterized by increasing opportunity costs when

A)​the PPF is a straight line
B)​the PPF is bowed inward
C)​the PPF is bowed outward
D)​increasing opportunity costs do not occur with PPF's

Question 42

Figure 3-9
Uzbekistan's Production Possibilities Frontier
Azerbaijan's Production Possibilities Frontier
Refer to Figure 3-9.If the production possibilities frontiers shown are each for two days of production,then which of the following combinations of bolts and nails could Uzbekistan and Azerbaijan together not make in a given 2-day production period?

A)9 bolts and 122 nails
B)21 bolts and 98 nails
C)36 bolts and 56 nails
D)47 bolts and 18 nails

Question 43

Figure 3-7
Bintu's Production Possibilities Frontier
Juba's Production Possibilities Frontier
Refer to Figure 3-7.If the production possibilities frontier shown for Juba is for 2 hours of work,then how long does it take Juba to make one bowl?

A)1/8 hour
B)1/2 hour
C)2 hours
D)8 hours

Question 44

Figure 3-6
Maxine's Production Possibilities Frontier
Daisy's Production Possibilities Frontier
Refer to Figure 3-6.If Maxine and Daisy each divides her time equally between making pies and making tarts,then total production is

A)6 pies and 10 tarts.
B)7.5 pies and 3 tarts.
C)7.5 pies and 10 tarts.
D)13.5 pies and 13 tarts.

Question 45

Figure 3-6
Maxine's Production Possibilities Frontier
Daisy's Production Possibilities Frontier
Refer to Figure 3-6.If the production possibilities frontier shown for Maxine is for 3 hours of work,then how long does it take Maxine to make one pie?

A)1/4 hour
B)1/3 hour
C)3 hours
D)4 hours

Question 46

Figure 3-10
Alice and Betty's Production Possibilities in one 8-hour day.
Alice's Production Possibilities Frontier
Betty's Production Possibilities Frontier
Refer to Figure 3-10.Both Alice and Betty

A)face a constant trade-off between producing pitchers of lemonade and pizzas.
B)can produce more pizzas than pitchers of lemonade if they devote all of their time to pizza production.
C)would benefit from specializing in lemonade production.
D)would benefit from specializing in pizza production.

Question 47

Figure 3-8
Chile's Production Possibilities Frontier
Colombia's Production Possibilities Frontier
Refer to Figure 3-8.If the production possibilities frontiers shown are each for one day of production,then which of the following combinations of coffee and soybeans could Chile and Colombia together make in a given day?

A)4 pounds of coffee and 16 pounds of soybeans
B)8 pounds of coffee and 15 pounds of soybeans
C)16 pounds of coffee and 10 pounds of soybeans
D)24 pounds of coffee and 4 pounds of soybeans

Question 48

Figure 3-7
Bintu's Production Possibilities Frontier
Juba's Production Possibilities Frontier
Refer to Figure 3-7.If the production possibilities frontiers shown are each for 4 hours of work,then which of the following combinations of bowls and cups could Bintu and Juba together not make in a given 4-hour production period?

A)3 bowls and 9.5 cups
B)4.5 bowls and 6 cups
C)5 bowls and 4 cups
D)6 bowls and 1 cups

Question 49

Figure 3-7
Bintu's Production Possibilities Frontier
Juba's Production Possibilities Frontier
Refer to Figure 3-7.If Bintu must work 2 hours to make each cup,then her production possibilities frontier is based on how many hours of work?

A)2 hours
B)4 hours
C)8 hours
D)16 hours

Question 50

Figure 3-7
Bintu's Production Possibilities Frontier
Juba's Production Possibilities Frontier
Refer to Figure 3-7.If the production possibilities frontiers shown are each for 4 hours of work,then which of the following combinations of bowls and cups could Bintu and Juba together make in a given 4-hour production period?

A)1 bowl and 14 cups
B)2 bowls and 11 cups
C)3 bowls and 10 cups
D)5 bowls and 5 cups

Question 51

Figure 3-9
Uzbekistan's Production Possibilities Frontier
Azerbaijan's Production Possibilities Frontier
Refer to Figure 3-9.If Uzbekistan and Azerbaijan each divides its time equally between making bolts and making nails,then total production is

A)15 bolts and 40 nails.
B)25 bolts and 70 nails.
C)30 bolts and 80 nails.
D)50 bolts and 140 nails.

Question 52

Figure 3-10
Alice and Betty's Production Possibilities in one 8-hour day.
Alice's Production Possibilities Frontier
Betty's Production Possibilities Frontier
Refer to Figure 3-10.If point A represents Alice's current production and point B represents Betty's current production,under what circumstances can both Alice and Betty benefit from specialization and trade?

A)Alice produces more pizzas and Betty produces more lemonade.
B)Alice produces more lemonade and Betty produces more pizzas.
C)Both Alice and Betty produce only pizzas.
D)There are no circumstances under which both Alice and Betty can benefit from specialization and trade.

Question 53

Figure 3-7
Bintu's Production Possibilities Frontier
Juba's Production Possibilities Frontier
Refer to Figure 3-7.If Bintu and Juba each divides her time equally between making bowls and making cups,then total production is

A)2 bowls and 6 cups.
B)3 bowls and 7 cups.
C)4 bowls and 8 cups.
D)6 bowls and 14 cups.

Question 54

Figure 3-6
Maxine's Production Possibilities Frontier
Daisy's Production Possibilities Frontier
Refer to Figure 3-6.If the production possibilities frontiers shown are each for one day of work,then which of the following combinations of pies and tarts could Maxine and Daisy together not make in a given day?

A)2 pies and 25 tarts
B)10 pies and 22 tarts
C)12 pies and 15 tarts
D)15 pies and 16 tarts

Question 55

Figure 3-7
Bintu's Production Possibilities Frontier
Juba's Production Possibilities Frontier
Refer to Figure 3-7.If Bintu and Juba both spend all of their time making bowls,then total production is

A)2 bowls.
B)3 bowls.
C)4 bowls.
D)6 bowls.

Question 56

Figure 3-9
Uzbekistan's Production Possibilities Frontier
Azerbaijan's Production Possibilities Frontier
Refer to Figure 3-9.If the production possibilities frontiers shown are each for two days of production,then which of the following combinations of bolts and nails could Uzbekistan and Azerbaijan together make in a given 2-day production period?

A)12 bolts and 120 nails
B)24 bolts and 96 nails
C)38 bolts and 50 nails
D)44 bolts and 24 nails

Question 57

Figure 3-10
Alice and Betty's Production Possibilities in one 8-hour day.
Alice's Production Possibilities Frontier
Betty's Production Possibilities Frontier
Refer to Figure 3-10.If point A represents Alice's production and point B represents Betty's production,

A)Alice produces 200 pitchers of lemonade and 100 pizzas while Betty produces 180 pitchers of lemonade and 180 pizzas.
B)Alice produces 180 pitchers of lemonade and 180 pizzas while Betty produces 200 pitchers of lemonade and 100 pizzas.
C)Alice produces 100 pitchers of lemonade and 200 pizzas while Betty produces 180 pitchers of lemonade and 180 pizzas.
D)Only Alice can benefit from specialization and trade.

Question 58

Figure 3-10
Alice and Betty's Production Possibilities in one 8-hour day.
Alice's Production Possibilities Frontier
Betty's Production Possibilities Frontier
Refer to Figure 3-10.If Alice produces only lemonade,she can produce

A)200 pitchers per day.
B)300 pitchers per day.
C)400 pitchers per day.
D)450 pitchers per day.

Question 59

Figure 3-8
Chile's Production Possibilities Frontier
Colombia's Production Possibilities Frontier
Refer to Figure 3-8.If Chile and Colombia each divides its time equally between making coffee and making soybeans,then total production is

A)12 pounds of coffee and 12 pounds of soybeans.
B)14 pounds of coffee and 9 pounds of soybeans.
C)16 pounds of coffee and 6 pounds of soybeans.
D)28 pounds of coffee and 18 pounds of soybeans.

Question 60

Figure 3-8
Chile's Production Possibilities Frontier
Colombia's Production Possibilities Frontier
Refer to Figure 3-8.If the production possibilities frontiers shown are each for one day of production,then which of the following combinations of pounds of coffee and pounds of soybeans could Chile and Colombia together not make in a given day?

A)4 pounds of coffee and 17 pounds of soybeans
B)8 pounds of coffee and 14 pounds of soybeans
C)16 pounds of coffee and 9 pounds of soybeans
D)24 pounds of coffee and 3 pounds of soybeans