Question 1

The production possibility frontier will shift outward for all of the following reasons except:
A.an increase in the unemployment rate.
B.an increase in the labor force.
C.an improvement in technology.
D.an increase in worker productivity.

Accepted Answer

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

Question 2

Figure: Tom's Production Possibilities
(Figure: Tom's Production Possibilities) Look at the figure Tom's Production Possibilities.In the figure, which point or points would represent an inefficient combination of coconuts and
Fish for Tom to produce?
A)A only
B)A and B
C)C only
D)B and D

Accepted Answer

Point C represents an inefficient combination because it lies inside the production possibilities frontier, indicating that Tom is not using all available resources efficiently.

Question 3

Figure: Tom's Production Possibilities
(Figure: Tom's Production Possibilities) Look at the figure Tom's Production Possibilities.In the figure, which point or points represent an efficient combination of coconuts and fish that Tom could choose to produce?
A.A only
B.A and B
C.B and C
D.D only

Accepted Answer

The answer of Figure: Tom's Production Possibilities
(Figure: Tom's Production Possibilities)...

Question 4

If the production possibility frontier is a straight line, which of the following is true?
A.Opportunity costs are constant.
B.The firm faces increasing costs.
C.The firm faces decreasing costs.
D.There is no trade-off between the two goods represented.

Accepted Answer

The answer of If the production possibility frontier is a...

Question 5

The effect of a tremendous natural disaster can be shown by:
A.a point inside of the production possibility frontier.
B.an outward shift of the production possibility frontier.
C.a movement from one point to another along the production possibility frontier.
D.an inward shift of the production possibility frontier.

Accepted Answer

The answer of The effect of a tremendous natural disaster...

Question 6

Figure: Tom's Production Possibilities
   (Figure: Tom's Production Possibilities) Look at the figure Tom's Production Possibilities.In the figure, the opportunity cost for Tom to move from point A on the curve to point B is: 
A.10 coconuts.
B.10 fish.
C.5 coconuts.
D.5 fish.

Accepted Answer

The answer of Figure: Tom's Production Possibilities
   (Figure:...

Question 7

Figure: Tom's Production Possibilities
   (Figure: Tom's Production Possibilities) Look at the figure Tom's Production Possibilities.In the figure, the opportunity cost for Tom to move from point C on the curve to point A is: 
A.10 coconuts.
B.30 fish.
C.5 coconuts.
D.There is no opportunity cost in terms of fish.

Accepted Answer

The answer of Figure: Tom's Production Possibilities
   (Figure:...

Question 8

Figure: Tom's Production Possibilities
   (Figure: Tom's Production Possibilities) Look at the figure Tom's Production Possibilities.In the figure, which of the point or points represents the combination of coconuts and fish feasible for Tom to produce at this time? 
A.A only
B.A and B
C.A, B, and C
D.D only

Accepted Answer

The answer of Figure: Tom's Production Possibilities
   (Figure:...

Question 9

The production possibility frontier illustrates:
A.the maximum quantity of one good that can be produced given the quantity of the other good produced.
B.that when markets don't achieve efficiency, government intervention can improve society's welfare.
C.the inverse relation between price and quantity of a particular good.
D.that people usually exploit opportunities to make themselves better off.

Accepted Answer

The production possibility frontier shows the maximum quantity of one good that can be produced given the quantity of the other good produced. It represents the efficiency of using resources and the trade-offs between producing one good versus the other.

Question 10

The illustrates the trade-offs facing an economy that produces only two goods.
A.production possibility frontier
B.circular-flow diagram
C.all else equal assumption
D.income distribution

Accepted Answer

The production possibility frontier (PPF) is a graphical representation of the maximum combinations of two goods that an economy can produce, given its resources and technology. It illustrates the trade-offs and opportunity costs of producing one good over another. Therefore, it is the best choice as it directly addresses the concept of trade-offs in a two-good economy.

Question 11

In terms of the production possibility frontier, inefficient use of available resources is shown by:
A)an increase in the labor force growth rate.
B)a movement from one point to another along the production possibility frontier.
C)an inward shift of the production possibility frontier due to the lack of opportunity.
D)a point inside the production possibility frontier.

Accepted Answer

A point inside the production possibility frontier indicates that the available resources are not being utilized efficiently, as the economy could produce more of both goods using the same resources if they were allocated optimally.

Question 12

The effect of an increase in productive inputs such as labor and capital can be shown by:
A.a point inside of the production possibility frontier.
B.an outward shift of the production possibility frontier.
C.a movement from one point to another along the production possibility
D.frontier.an inward shift of the production possibility frontier.

Accepted Answer

The answer of The effect of an increase in productive...

Question 13

Figure: Wine and Wheat
  (Figure: Wine and Wheat) Look at the figure Wine and Wheat.If this economy is producing 12 tons of wheat and 9,000 bottles of wine, we know the economy: 
A.is using its resources efficiently.
B.is using its resources inefficiently.
C.is producing at an unattainable point.
D.has unemployment.

Accepted Answer

The answer of Figure: Wine and Wheat
  (Figure: Wine...

Question 14

Figure: Wine and Wheat
(Figure: Wine and Wheat) Look at the figure Wine and Wheat.If this economy is producing at point A, we know the economy is:
A.using its resources efficiently.
B.using its resources inefficiently.
C.producing at an unattainable point.
D.trading with another country.

Accepted Answer

The answer of Figure: Wine and Wheat
(Figure: Wine and Wheat)...

Question 15

(Table: Trade-off of Study Time and Leisure Time) Look at the table Trade-off of Study Time and Leisure Time.A student sleeps 8 hours per day and divides the remaining time between study time and leisure time.The table shows the combinations of study and leisure time that can be produced in the 16 waking hours of each day.Suppose the student completes a speed-reading course that allows him to do the same amount of studying in half as many hours.Which of the following is now true of his opportunity costs?
A.The opportunity cost of leisure has increased.
B.The opportunity cost of studying has increased.
C.The opportunity cost of leisure has decreased.
D.There is no change in the opportunity costs.

Accepted Answer

The answer of (Table: Trade-off of Study Time and Leisure...

Question 16

Figure: Tom's Production Possibilities   (Figure: Tom's Production Possibilities) Look at the figure Tom's Production Possibilities.In the figure, which point or points represent a combination of coconuts and fish not feasible for Tom to produce at this time?
A)A only
B)A and B
C)B and C
D)D only

Accepted Answer

The answer of Figure: Tom's Production Possibilities   (Figure:...

Question 17

An inward shift in the U.S.economy's production possibility frontier could represent which of the following?
A)U.S.workers moving to Canada
B)U.S.workers moving from New Jersey to Massachusetts
C)U.S.economic growth
D)U.S.economic growth as workers move to different states

Accepted Answer

An inward shift in the production possibility frontier indicates a decrease in an economy's capacity to produce goods and services. This could occur if U.S. workers move to Canada, reducing the labor force and thus the productive capacity of the U.S. economy.

Question 18

Figure: Tom's Production Possibilities
(Figure: Tom's Production Possibilities) Look at the figure Tom's Production Possibilities.In the figure, the opportunity cost for Tom to move from point B on the curve to point A is:
A.10 coconuts.
B.10 fish.
C.5 coconuts.
D.5 fish.

Accepted Answer

The answer of Figure: Tom's Production Possibilities
(Figure: Tom's Production Possibilities)...

Question 19

Suppose Indiana produces only steel and corn, with fixed amounts of land, labor, and capital resources.Which of the following best creates potential economic growth?
A.The unemployment rate in Indiana rises from 5% to 6%.
B.The Midwestern United States has a devastating drought.
C.The percentage of Indiana residents with a college degree rises from 25% to 30%.
D.The United States imports more and more low-cost steel from Asian countries.

Accepted Answer

The answer of Suppose Indiana produces only steel and corn,...

Question 20

If a production possibility frontier is a straight line, it tells us that the opportunity cost of producing one more unit of good X:
A.is an increasing amount of good Y.
B.is a decreasing amount of good Y.
C.is equal to the inverse of the amount of good Y.
D.is a constant amount of good Y.

Accepted Answer

If a PPF is a straight line, it implies that the opportunity cost of producing one more unit of good X is constant. This means that the same amount of good Y is being sacrificed to produce each additional unit of good X. Therefore, the answer is D, which states that the opportunity cost is a constant amount of good Y.

Quiz 1: First Principles

The production possibility frontier will shift outward for all of the following reasons except: A.an increase in the unemployment rate. B.an increase in the labor force. C.an improvement in technology. D.an increase in worker productivity.

Figure: Tom's Production Possibilities (Figure: Tom's Production Possibilities) Look at the figure Tom's Production Possibilities.In the figure, which point or points would represent an inefficient combination of coconuts and Fish for Tom to produce?

Figure: Tom's Production Possibilities (Figure: Tom's Production Possibilities) Look at the figure Tom's Production Possibilities.In the figure, which point or points represent an efficient combination of coconuts and fish that Tom could choose to produce? A.A only B.A and B C.B and C D.D only

If the production possibility frontier is a straight line, which of the following is true? A.Opportunity costs are constant. B.The firm faces increasing costs. C.The firm faces decreasing costs. D.There is no trade-off between the two goods represented.

Figure: Tom's Production Possibilities (Figure: Tom's Production Possibilities) Look at the figure Tom's Production Possibilities.In the figure, the opportunity cost for Tom to move from point A on the curve to point B is: A.10 coconuts. B.10 fish. C.5 coconuts. D.5 fish.

The illustrates the trade-offs facing an economy that produces only two goods. A.production possibility frontier B.circular-flow diagram C.all else equal assumption D.income distribution

In terms of the production possibility frontier, inefficient use of available resources is shown by:

Figure: Wine and Wheat (Figure: Wine and Wheat) Look at the figure Wine and Wheat.If this economy is producing at point A, we know the economy is: A.using its resources efficiently. B.using its resources inefficiently. C.producing at an unattainable point. D.trading with another country.

Figure: Tom's Production Possibilities (Figure: Tom's Production Possibilities) Look at the figure Tom's Production Possibilities.In the figure, which point or points represent a combination of coconuts and fish not feasible for Tom to produce at this time?

An inward shift in the U.S.economy's production possibility frontier could represent which of the following?

Figure: Tom's Production Possibilities (Figure: Tom's Production Possibilities) Look at the figure Tom's Production Possibilities.In the figure, the opportunity cost for Tom to move from point B on the curve to point A is: A.10 coconuts. B.10 fish. C.5 coconuts. D.5 fish.

If a production possibility frontier is a straight line, it tells us that the opportunity cost of producing one more unit of good X: A.is an increasing amount of good Y. B.is a decreasing amount of good Y. C.is equal to the inverse of the amount of good Y. D.is a constant amount of good Y.