Question 1

Increasing opportunity costs of producing goods imply that the production possibilities curve will be

Accepted Answer

The answer of Increasing opportunity costs of producing goods imply...

Question 2

Which of the following is true of the production possibilities curve?

Accepted Answer

The production possibilities curve assumes a fixed level of technology, meaning that the amount and quality of resources available for production do not change. It does not assume that prices are equal or that inefficiency will result in the use of resources.

Question 3

In Zimbabwe and Botswana, elephants can be owned by local tribes and trade in ivory is legal, while in countries such as Kenya, it is illegal to trade in ivory and elephants cannot be privately owned but are protected by the government. Which of the following is true regarding the change in the elephant populations since 1979 in these countries?

Accepted Answer

In Zimbabwe and Botswana, where elephants can be owned and traded legally, the elephant population has increased by more than double since 1979. In Kenya, where trade in ivory is illegal and elephants are protected by the government, the population has decreased to less than one-third of its previous level. Therefore, option D is the correct choice.

Question 4

Which of the following is true of the production possibilities curve?

Accepted Answer

The production possibilities curve assumes a fixed quantity of resources, meaning that the amount of inputs available for production is constant. Choice B is incorrect because the production possibilities curve does not take into account the prices of the products being considered. Choice C is incorrect because a point inside the curve is inefficient, as it represents a combination of production that is not utilizing all available resources.

Question 5

In Africa, which of the following policies has been most successful at increasing elephant populations?

Accepted Answer

The answer of In Africa, which of the following policies...

Question 6

The number of cattle slaughtered every year for meat far exceeds the number of elephants slaughtered every year for their ivory. Despite this, cows can be found everywhere while elephants are on the verge of extinction in some countries. Which of the following best explains this difference?

Accepted Answer

Cows can be privately owned and bred for their meat while in many countries, elephants are protected and cannot be privately owned for their ivory. This allows for a larger population of cows to be bred and slaughtered for their meat compared to elephants. Additionally, the demand for ivory may be high, but it does not necessarily translate to a higher number of elephant slaughters as it is illegal in many countries.

Question 7

As a general rule, technological progress

Accepted Answer

Technological progress allows for more efficient production methods and new production possibilities, leading to an increase in potential output. This is represented by a shift of the production possibilities curve outward, away from the origin.

Question 8

The production possibilities curve illustrates the basic principle that

Accepted Answer

The production possibilities curve shows the maximum amount of two goods that an economy can produce given its resources and technology. If all resources are being used efficiently, any increase in the production of one good will require a decrease in the production of another good, since the resources are fixed. Thus, the opportunity cost of producing more of one good is the quantity of the other good that must be given up.

Question 9

The reason that the production possibilities curve is usually a bow-shaped curve instead of a straight line is that

Accepted Answer

The production possibilities curve (PPC) is a graphical representation of the maximum amount of two goods that can be produced with limited resources. Resources are not perfectly adaptable to the production of all goods, meaning that some resources are better suited to producing one good over another. This leads to the law of increasing opportunity cost and the bowed shape of the PPC. As the production of one good increases, more and more of the other good must be given up, causing the opportunity cost of producing that good to increase. Therefore, the curve is typically bow-shaped rather than a straight line.

Question 10

Beginning in the early 1990s, private landowners in Zimbabwe have started fencing in large areas of land that contain black rhinos, which were on the verge of extinction. These private owners charge fees for a stay at the lodges on the property (eco-tourism) and also sell hunting safaris and photo safaris. As a result,

Accepted Answer

Private landowners in Zimbabwe have successfully increased the population of black rhinos by fencing in large areas of land and charging fees for eco-tourism and hunting safaris. The income generated from these activities provides an incentive for landowners to protect and conserve the rhino populations on their property.

Question 11

Which of the following will most likely occur under a system of clearly defined and enforced private property rights?

Accepted Answer

When individuals have clearly defined and enforced private property rights, they have a strong incentive to conserve and sustainably manage their resources, especially if they anticipate that the resource value will increase over time. This is because they can capture the benefits of the resource for themselves and future generations. Choices A, C, and D are incorrect because they assume that private property owners act solely in their own self-interest and do not take into account the external effects of their actions on others. However, property rights can provide the basis for negotiation and resolution of conflicting resource uses, as well as encourage innovation and investment in resource management.

Question 12

A production possibilities curve indicates that when resources are being used efficiently,

Accepted Answer

A production possibilities curve shows the maximum possible combinations of two goods that can be produced with a given amount of resources and technology. When resources are being used efficiently, producing more of one good will require sacrificing some of the production of the other good, since resources are limited. Therefore, to produce more of one good, you must produce less of another good. This is shown by moving along the production possibilities curve from one point to another.

Question 13

Which of the following most accurately indicates the implications of an economy's production possibilities curve?

Accepted Answer

The answer of Which of the following most accurately indicates...

Question 14

Todd owns a truck that he values at $2,000. Susan, who does a lot of hauling, values the truck at $6,000. If these two are allowed to negotiate, which of the following will most likely occur?

Accepted Answer

Since Todd values the truck at $2,000 and Susan values it at $6,000, it is likely that they will settle on a price somewhere in between. This will benefit both parties as Todd will receive more money than he initially believed the truck was worth, and Susan will get the truck at a lower price than she valued it. Therefore, the truck will be sold at a price greater than $2,000 but less than $6,000, and both parties will benefit. Option A is incorrect because Todd is unlikely to sell the truck for less than he values it. Option B is unlikely because Susan is unlikely to pay more than she values the truck. Option D is incorrect because both parties should benefit from the negotiation.

Question 15

Production possibilities curve are usually bowed outward. This is because

Accepted Answer

The answer of Production possibilities curve are usually bowed outward....

Question 16

When private ownership of a resource is clearly defined and enforced, the private owner

Accepted Answer

When a resource is privately owned, the owner has a strong incentive to use the resource wisely. This is because they bear the costs and reap the benefits of their actions, so it is in their best interest to manage the resource sustainably to ensure its longevity and profitability. If they were to misuse or waste the resource, they would suffer the consequences in the form of reduced profits or even loss of ownership. Thus, private ownership provides a strong incentive for responsible resource management.

Question 17

The student government associations at several universities have experimented with purchasing bicycles to leave around campus for everyone's use. Anyone who needs the bike can use it, and they are not allowed to lock the bike up or take it home, but rather must leave it on campus for someone else to use. Economic theory would predict that

Accepted Answer

Economic theory suggests that people tend to take better care of things that they own individually compared to things that are owned collectively by a group of people. In this case, since the bicycles are owned collectively and not individually, students may not take as good of care of them as they would their own bikes. Additionally, since the bikes are not owned individually, students may be less likely to be held personally responsible if the bike is damaged or stolen, leading to less incentive to take good care of them.

Question 18

Given your knowledge of the incentives created by private ownership, which of the following would you expect to be false ?

Accepted Answer

This statement is false as people are less likely to litter on their own property due to their own ownership and pride in the appearance of their land. Littering on a public property is easier as there are not likely to be any direct consequences for the individual.

Question 19

In the fictitious country of Lebos, the government allows private ownership of pigs but not of cows. If the people of Lebos permanently increase their desire to purchase more pork and beef, in the long run, we would expect

Accepted Answer

Since private ownership of pigs is allowed in Lebos, an increase in demand for pork will lead to an increase in the population of pigs. On the other hand, since private ownership of cows is not allowed, an increase in demand for beef will not lead to an increase in the population of cows as individuals cannot directly increase their ownership of cows. Rather, the government would have to implement policies to increase the population of cows. Therefore, the answer is A - the population of pigs will rise and the population of cows will fall.

Question 20

When the production possibilities curve is bowed out, resources are

Accepted Answer

The bowed shape of the production possibilities curve indicates that resources are not equally suited to the production of both goods. In other words, some resources may be better suited for producing one good than the other, resulting in diminishing returns as more of one good is produced.

Quiz 2: Some Tools of the Economist

Increasing opportunity costs of producing goods imply that the production possibilities curve will be

Which of the following is true of the production possibilities curve?

Which of the following is true of the production possibilities curve?

In Africa, which of the following policies has been most successful at increasing elephant populations?

The number of cattle slaughtered every year for meat far exceeds the number of elephants slaughtered every year for their ivory. Despite this, cows can be found everywhere while elephants are on the verge of extinction in some countries. Which of the following best explains this difference?

As a general rule, technological progress

The production possibilities curve illustrates the basic principle that

The reason that the production possibilities curve is usually a bow-shaped curve instead of a straight line is that

Which of the following will most likely occur under a system of clearly defined and enforced private property rights?

A production possibilities curve indicates that when resources are being used efficiently,

Which of the following most accurately indicates the implications of an economy's production possibilities curve?

Todd owns a truck that he values at $2,000. Susan, who does a lot of hauling, values the truck at $6,000. If these two are allowed to negotiate, which of the following will most likely occur?

Production possibilities curve are usually bowed outward. This is because

When private ownership of a resource is clearly defined and enforced, the private owner

Given your knowledge of the incentives created by private ownership, which of the following would you expect to be false ?

In the fictitious country of Lebos, the government allows private ownership of pigs but not of cows. If the people of Lebos permanently increase their desire to purchase more pork and beef, in the long run, we would expect

When the production possibilities curve is bowed out, resources are