Question 1

Suppose the economy goes from a point on its production possibilities frontier (PPF) to a point below that PPF. Assuming that the PPF has not shifted, this could be due to

Accepted Answer

A)  a gain of resources.
B)  a loss of resources.
C)  technological improvement in the production of both goods.
D)  a new law that interferes with productive efficiency.E) C) and D)
F) B) and C)

Question 2

When opportunity costs are constant, the PPF will be a straight line.

Accepted Answer

A) True 
 B)False

Question 3

​Exhibit 2-10   Refer Exhibit 2-10. Which of the following statements is true?

Accepted Answer

A)  There would be no gains from trade between person A and person B because the opportunity cost of producing one unit of good X (or one unit of good Y) is the same for both persons.
B)  Both person A and person B will benefit from specialization and trade as long as person A specializes in the production of good X and person B specializes in the production of good Y.
C)  Both person A and person B will benefit from specialization and trade as long as person A specializes in the production of good Y and person B specializes in the production of good X.
D)  Both person A and person B will benefit from trade as long as person A produces both good X and good Y, and person B produces neither good.
E)  Both person A and person B will benefit from trade as long as person B produces both good X and good Y, and person A produces neither good.F) A) and D)
G) A) and C)

Question 4

A society is productive inefficient when

Accepted Answer

A)  it produces at a point on its PPF.
B)  it does not produce the maximum amount of output with its given resources and technology.
C)  it can produce more of one good only by giving up some of another good.
D)  it produces at a point beyond its PPF.E) A) and D)
F) None of the above

Question 5

Some of our farm fields are being left unused. Does this have any implications for the economy's PPF diagram (with agricultural products on one axis and all other products on the other axis) ?

Accepted Answer

A)  There are no implications because the PPF deals only with resources in use.
B)  The PPF cannot be drawn if some resources are idle.
C)  With unemployed resources, we are at a point below (inside) the PPF.
D)  The PPF would be upward sloping.E) None of the above
F) B) and C)

Question 6

Exhibit 2-1 
Refer to Exhibit 2-1. The PPF illustrates

Accepted Answer

A)  constant opportunity costs between guns and butter.
B)  that guns are more important than butter.
C)  increasing opportunity costs between guns and butter.
D)  the opportunity cost of one unit of guns is four units of butter.E) B) and D)
F) B) and C)

Question 7

If resources are better suited toward the production of one good than toward another good, then the PPF for those two goods is

Accepted Answer

A)  a straight line.
B)  bowed outward.
C)  upward sloping.
D)  a vertical line.E) B) and C)
F) C) and D)

Question 8

Exhibit 2-2 2 is the relevant production possibilities frontier, then point __________ is unattainable. A) A B) G C) D D) J" class="answers-bank-image d-inline" rel="preload" >
Refer to Exhibit 2-2. If PPF2 is the relevant production possibilities frontier, then point __________ is unattainable.

Accepted Answer

A)  A
B)  G
C)  D
D)  JE) All of the above
F) C) and D)

Question 9

Both country 1 and country 2 are located on their respective production possibilities frontiers (PPFs) for consumer goods and capital goods, but country 1 produces twice the output of both types of goods compared to country 2. It follows that

Accepted Answer

A)  country 1's PPF lies further to the right than country 2's PPF.
B)  country 1 has a smaller population than country 2.
C)  country 1 has a bigger population than country 2.
D)  country 1 is efficient and country 2 is inefficient.E) None of the above
F) A) and B)

Question 10

Assume that two products are being produced: benches and chairs.  Create a table that illustrates constant opportunity costs in the production of these two goods.  Draw a production possibilities frontier (PPF)based on the data in your table and explain the condition necessary for a PPF to exhibit constant opportunity costs.

Accepted Answer

The following table illustrates constant...

Question 11

An economy can produce either of these two combinations of goods X and Y: 1,000X and 0Y or 400Y and 0X. Furthermore, the opportunity cost between the two goods is always constant. Which of the following combinations of the two goods, X and Y, lies on the economy's production possibilities frontier?

Accepted Answer

A)  700 units of X and  280 units of Y
B)  600 units of X and  250 units of Y
C)  400 units of X and 150 units of Y
D)  90 units of X and  360 units of Y
E)  300 units of X and  280 units of YF) A) and C)
G) A) and E)

Question 12

Suppose Andrea is taking just two courses and is at a point on her PPF of grades for those two courses.  Now this PPF shifts inward and Andrea moves to a point on the new PPF.  Which of the following would be impossible after her PPF has shifted inward compared to before the PPF shifted?

Accepted Answer

A)  both of her grades to fall
B)  both of her grades to rise
C)  one of her grades to rise and the other grade to fall
D)  one of her grades to fall while the other grade stays constantE) C) and D)
F) A) and B)

Question 13

Exhibit 2-9  Refer to Exhibit 2-9. If Alex and Adam each specialize in the good in which he has a comparative advantage and then engage in trade, ____________________ can consume a combination of goods that lies beyond their PPF.

Accepted Answer

A)  Alex, but not Adam,
B)  Adam, but not Alex
C)  Alex and Adam
D)  neither Alex nor AdamE) C) and D)
F) All of the above

Question 14

Exhibit 2-2 2 is the relevant production possibilities frontier, then point __________ illustrates productive inefficiency. A) D B) F C) C D) J" class="answers-bank-image d-inline" rel="preload" >
Refer to Exhibit 2-2. If PPF2 is the relevant production possibilities frontier, then point __________ illustrates productive inefficiency.

Accepted Answer

A)  D
B)  F
C)  C
D)  JE) B) and C)
F) All of the above

Question 15

Exhibit 2-5 
Refer to Exhibit 2-5. The opportunity cost of moving from point C to point B is

Accepted Answer

A)  15,000 televisions.
B)  15,000 fax machines.
C)  10,000 televisions.
D)  20,000 fax machines.E) B) and C)
F) A) and D)

Question 16

Exhibit 2-9  Refer to Exhibit 2-9. For Adam, the opportunity cost of producing one unit of good B is ____________ unit(s) of good A.

Accepted Answer

A)  3.00
B)  0.33
C)  0.75
D)  1.33E) None of the above
F) B) and C)

Question 17

In a PPF graph of goods X and Y, points that lie beyond (to the right of)the PPF represent combinations of the two goods that are currently unattainable.

Accepted Answer

A) True 
 B)False

Question 18

Economic growth is illustrated by a shift inward (toward the origin)of the PPF.

Accepted Answer

A) True 
 B)False

Question 19

A PPF is more likely to be a downward-sloping curve that is bowed outward than a downward-sloping straight line because most resources are

Accepted Answer

A)  better suited for the production of some goods than others.
B)  used efficiently.
C)  relatively cheap at low levels of output.
D)  used to produce consumption goods.E) C) and D)
F) A) and B)

Question 20

Exhibit 2-6 
Refer to Exhibit 2-6.  Which graph depicts the result of a decrease in the unemployment rate?

Accepted Answer

A)  (1) 
B)  (2) 
C)  (3) 
D)  (4) 
E)  The result of a decrease in the unemployment rate is not represented by any of the graphs depicted here.F) B) and E)
G) A) and B)

Exam 2: Production Possibilities Frontier Framework

Exhibit 2-9 Refer to Exhibit 2-9. If Alex and Adam each specialize in the good in which he has a comparative advantage and then engage in trade, ____________________ can consume a combination of goods that lies beyond their PPF.

Correct Answer
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An economy can produce either of these two combinations of goods X and Y: 1,000X and 0Y or 400Y and 0X. Furthermore, the opportunity cost between the two goods is always constant. Which of the following combinations of the two goods, X and Y, lies on the economy's production possibilities frontier?

Correct Answer
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If resources are better suited toward the production of one good than toward another good, then the PPF for those two goods is

Correct Answer
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Exhibit 2-2 Refer to Exhibit 2-2. If PPF₂ is the relevant production possibilities frontier, then point __________ illustrates productive inefficiency.

Correct Answer
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The following table illustrates constant...
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In a PPF graph of goods X and Y, points that lie beyond (to the right of)the PPF represent combinations of the two goods that are currently unattainable.

Correct Answer
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When opportunity costs are constant, the PPF will be a straight line.

Correct Answer
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Both country 1 and country 2 are located on their respective production possibilities frontiers (PPFs) for consumer goods and capital goods, but country 1 produces twice the output of both types of goods compared to country 2. It follows that

Correct Answer
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Exhibit 2-10 Refer Exhibit 2-10. Which of the following statements is true?

Correct Answer
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Economic growth is illustrated by a shift inward (toward the origin)of the PPF.

Correct Answer
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Some of our farm fields are being left unused. Does this have any implications for the economy's PPF diagram (with agricultural products on one axis and all other products on the other axis) ?

Correct Answer
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Suppose Andrea is taking just two courses and is at a point on her PPF of grades for those two courses. Now this PPF shifts inward and Andrea moves to a point on the new PPF. Which of the following would be impossible after her PPF has shifted inward compared to before the PPF shifted?

Correct Answer
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Exhibit 2-9 Refer to Exhibit 2-9. For Adam, the opportunity cost of producing one unit of good B is ____________ unit(s) of good A.

Correct Answer
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A PPF is more likely to be a downward-sloping curve that is bowed outward than a downward-sloping straight line because most resources are

Correct Answer
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Exhibit 2-2 Refer to Exhibit 2-2. If PPF₂ is the relevant production possibilities frontier, then point __________ is unattainable.

Correct Answer
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A society is productive inefficient when

Correct Answer
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Exhibit 2-6 Refer to Exhibit 2-6. Which graph depicts the result of a decrease in the unemployment rate?

Correct Answer
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Exhibit 2-1 Refer to Exhibit 2-1. The PPF illustrates

Correct Answer
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Suppose the economy goes from a point on its production possibilities frontier (PPF) to a point below that PPF. Assuming that the PPF has not shifted, this could be due to

Correct Answer
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Exhibit 2-5 Refer to Exhibit 2-5. The opportunity cost of moving from point C to point B is

Correct Answer
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Exam 2: Production Possibilities Frontier Framework

Exhibit 2-9 Refer to Exhibit 2-9. If Alex and Adam each specialize in the good in which he has a comparative advantage and then engage in trade, ____________________ can consume a combination of goods that lies beyond their PPF.

Correct AnswerverifiedShow Answer

An economy can produce either of these two combinations of goods X and Y: 1,000X and 0Y or 400Y and 0X. Furthermore, the opportunity cost between the two goods is always constant. Which of the following combinations of the two goods, X and Y, lies on the economy's production possibilities frontier?

Correct AnswerverifiedShow Answer

If resources are better suited toward the production of one good than toward another good, then the PPF for those two goods is

Correct AnswerverifiedShow Answer

Exhibit 2-2 Refer to Exhibit 2-2. If PPF2 is the relevant production possibilities frontier, then point __________ illustrates productive inefficiency.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe following table illustrates constant...View AnswerShow Answer

In a PPF graph of goods X and Y, points that lie beyond (to the right of)the PPF represent combinations of the two goods that are currently unattainable.

Correct AnswerverifiedShow Answer

When opportunity costs are constant, the PPF will be a straight line.

Correct AnswerverifiedShow Answer

Both country 1 and country 2 are located on their respective production possibilities frontiers (PPFs) for consumer goods and capital goods, but country 1 produces twice the output of both types of goods compared to country 2. It follows that

Correct AnswerverifiedShow Answer

​Exhibit 2-10 Refer Exhibit 2-10. Which of the following statements is true?

Correct AnswerverifiedShow Answer

Economic growth is illustrated by a shift inward (toward the origin)of the PPF.

Correct AnswerverifiedShow Answer

Some of our farm fields are being left unused. Does this have any implications for the economy's PPF diagram (with agricultural products on one axis and all other products on the other axis) ?

Correct AnswerverifiedShow Answer

Suppose Andrea is taking just two courses and is at a point on her PPF of grades for those two courses. Now this PPF shifts inward and Andrea moves to a point on the new PPF. Which of the following would be impossible after her PPF has shifted inward compared to before the PPF shifted?

Correct AnswerverifiedShow Answer

Exhibit 2-9 Refer to Exhibit 2-9. For Adam, the opportunity cost of producing one unit of good B is ____________ unit(s) of good A.

Correct AnswerverifiedShow Answer

A PPF is more likely to be a downward-sloping curve that is bowed outward than a downward-sloping straight line because most resources are

Correct AnswerverifiedShow Answer

Exhibit 2-2 Refer to Exhibit 2-2. If PPF2 is the relevant production possibilities frontier, then point __________ is unattainable.

Correct AnswerverifiedShow Answer

A society is productive inefficient when

Correct AnswerverifiedShow Answer

Exhibit 2-6 Refer to Exhibit 2-6. Which graph depicts the result of a decrease in the unemployment rate?

Correct AnswerverifiedShow Answer

Exhibit 2-1 Refer to Exhibit 2-1. The PPF illustrates

Correct AnswerverifiedShow Answer

Suppose the economy goes from a point on its production possibilities frontier (PPF) to a point below that PPF. Assuming that the PPF has not shifted, this could be due to

Correct AnswerverifiedShow Answer

Exhibit 2-5 Refer to Exhibit 2-5. The opportunity cost of moving from point C to point B is

Correct AnswerverifiedShow Answer

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Exhibit 2-2 Refer to Exhibit 2-2. If PPF₂ is the relevant production possibilities frontier, then point __________ illustrates productive inefficiency.

Correct Answer
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The following table illustrates constant...
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Exhibit 2-10 Refer Exhibit 2-10. Which of the following statements is true?

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Exhibit 2-2 Refer to Exhibit 2-2. If PPF₂ is the relevant production possibilities frontier, then point __________ is unattainable.

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