Reference no: EM131124985

A bowed out PPF reflects which of the following ideas?

i.increasing opportunity cost

ii.resources are not equally productive in all activities

iii.prices of goods increase over time

i only

i and iii

ii and iii

i and ii

QUESTION 2

With no international trade, a country ________ consume at a point outside of its PPF; with international trade, a country ________ consume at a point outside of its PPF.

can; cannot

cannot; can

cannot; cannot

can; can

QUESTION 3

If the production possibilities frontier between two goods is a straight line, then the
line does not qualify as a production possibilities frontier because the unattainable production points are too close to the

inefficient production points.

opportunity cost is not a ratio.

increasing opportunity costs.

resources are equally productive in both goods.

QUESTION 4

As an economy produces more of one of the goods on a bowed out production possibilities frontier, what happens to the opportunity cost of producing the good?

It might increase, decrease, or remain constant depending on how much people value the additional units of the good.

It decreases.

It increases.

It remains constant.

QUESTION 5

"Comparative advantage" is defined as a situation in which one person can produce

more of a good than another person.

a good for a lower dollar cost than another person.

a good for a lower opportunity cost than another person.

more of all goods than another person.

QUESTION 6

When a production possibilities frontier is bowed outward, as more of one good is produced, its opportunity cost

increases.

decreases.

might increase, decrease, or remain constant depending on how much people value the additional units of the good.

remains constant.

QUESTION 7

A bowed out production possibility frontier shows that the

opportunity cost relationship is linear.

opportunity cost of a good is constant as more of the good is produced.

opportunity cost of a good increases as more of the good is produced.

opportunity cost of a good decreases as more of the good is produced.

QUESTION 8

Which of the following statements is correct?

The production possibilities frontier shows that there are no limits to production.

Any point on or within the PPF is production efficient.

If capital is idle, the economy is producing at its full potential.

A tradeoff is a limit that forces an exchange or a substitution of one thing for something else.

QUESTION 9

A major earthquake occurs in the central part of the United States. What impact would this have on the nation's production possibilities frontier and why?

A tradeoff would occur to replace the resources and goods destroyed.

It would shift inward because some of the nation's resources, such as capital and labor, would be destroyed.

It would shift outward because unemployment would be reduced.

Nothing would happen because the nation would still have the same capabilities.

QUESTION 10

When a nation is producing on its production possibilities frontier, if more resources are used to produce one good, then the

production of other goods

must increase.

must decrease.

must remain the same.

must change but they might increase or decrease.

QUESTION 11

Moving along a country's PPF, a reason opportunity costs increase is that

unemployment increases as a country produces more and more of one good.

unemployment decreases as a country produces more and more of one good.

some resources are better suited for producing one good rather than the other.

technology declines as a country produces more and more of one good.

QUESTION 12

A reason the production possibilities frontier exists is

scarcity of resources and unlimited technology.

unemployment.

scarcity of resources.

unlimited resources and technology.

QUESTION 13

Moving from one point to another on a production possibilities frontier implies

increasing the production of one good and decreasing the production of another.

increasing the production of both goods.

decreasing the production of both goods.

holding the production levels of both goods constant.

QUESTION 14

Specialization and trade make a country better off because with trade the country can consume at a point

outside its production possibilities frontier.

on its trading partner's production possibilities frontier.

inside its production possibilities frontier.

on its production possibilities frontier.

QUESTION 15

The production possibilities frontier is the boundary between the combinations of goods and services that can be produced and the combinations that cannot be produced when technology is changing.

minimum output that can be produced when resources are used inefficiently.

boundary between the combinations of goods and services that can be produced and the combinations that cannot be

produced, given the available factors of production and the state of technology.

maximum output that can be produced at an opportunity cost of zero.

QUESTION 16

The opportunity cost of economic growth is ________ and the benefit of economic growth is ________.

decreased current consumption; decreased future consumption

decreased current consumption; increased future consumption

increased current consumption; increased future consumption

increased current consumption; decreased future consumption

QUESTION 17

In terms of a nation's production possibilities frontier, what impact does international trade have?

International trade shifts the nation's production possibilities frontier outward.

International trade shifts the production possibilities frontier outward for the goods that are exported and inward for the goods

that are imported.

International trade shifts the nation's production possibilities frontier inward.

International trade allows the nation to consume at a point outside its production possibilities frontier.

QUESTION 18

The production possibilities frontier illustrates the

goods and services that people want.

limits to people's wants.

resources the economy possess, but not its level of technology.

maximum combinations of goods and services that can be produced.

QUESTION 19

As we move along the production possibilities frontier,

the possibilities of tradeoffs diminish.

the production of one good increases as the production of the other good decreases.

more of both goods can be produced.

a tradeoff is not possible because nations need all goods.

QUESTION 20

What is the opportunity cost of economic growth?

Eliminate scarcity

Land.

Capital goods.

Consumption goods.

QUESTION 21

Which of the following statements is correct?

i.As the economy grows, the opportunity costs of economic growth decrease.

ii.Economic growth has no opportunity cost.

iii.The opportunity cost of economic growth is current consumption forgone.

ii only

iii only

i only

i and iii

QUESTION 22

Economic growth depends upon which of the following?

i. Increasing the quantity of labor.

ii. Lowering the prices of goods and services.

iii. Advancing technology.

ii only.

i only.

i and iii.

iii only.

QUESTION 23

When drawing a production possibilities frontier, which of the following is held constant?

the amount of money in the economy

the prices of goods and services

the quantity of the goods and services that are produced

the available factors of production and the state of technology

QUESTION 24

To increase its economic growth, a nation should

encourage spending on goods and services.

increase current consumption.

encourage education because that increases the quality of labor.

limit the number of people in college because they produce nothing.

QUESTION 25

The opportunity cost of one more slice of pizza in terms of sodas is the

number of pizza slices we have to give up in order to get one extra soda.

total number of sodas that we have divided by the total number of pizza slices that we have.

total number of pizza slices that we have divided by the total number of sodas that we have.

number of sodas we have to give up in order to get one extra pizza slice.