35. Think of the production possibilities frontier
(PPF) model. When society is producing the largest possible output from its
resources, it is operating:
a. inefficiently.
b. efficiently.
c. with
no opportunity cost.
d. inside
(within) the PPF.
e. beyond
its opportunity cost.
ANS: B
Refer
to the following figure to answer the next four questions.
37. Which
point in the corresponding figure represents a combination of smoothies and
milk shakes that society cannot currently produce?
a. point
A
b. point
B
c. point
C
d. point
D
e. point
E
ANS: E
38. Which
point in the corresponding figure shows that productive resources are not fully
employed?
a. point
A
b. point
B
c. point
C
d. point
D
e. point
E
ANS: A
39. In
the figure, point A is:
a. an
efficient point.
b. unattainable
with current resources.
c. an
inefficient point.
d. the
equilibrium.
e. the
point where society would prefer to consume.
ANS: C
40. In
the figure, point E is:
a. an
efficient point.
b. unattainable
with current resources.
c. an
inefficient point.
d. the
equilibrium.
e. evidence
that trade does not enrich society.
ANS: B
Refer
to the accompanying figure to answer the next four questions.
44. How
is opportunity cost illustrated?
a. a
move from point A to point B
b. a
move from point A to point C
c. a
move from point C to point D
d. a
move from point B to point C
e. a
move from point D to point E
ANS: D
45. The inefficient
point(s) is (are):
a. point
A.
b. points
C and D.
c. point
C.
d. point
D.
e. points
B, C, and E.
ANS: A
46. Unemployed
resources are evident at:
a. point
A.
b. point
B.
c. point
C.
d. point
D.
e. points
B, C, and E.
ANS: A
47. Given
your current resources, you would need even more hours in each day in order to
attain:
a. point
A.
b. point
B.
c. point
C.
d. point
D.
e. point
E.
ANS: D
53. When
the opportunity cost of producing a good rises as you produce more of it, you experience:
a. normative
economics.
b. increasing
relative costs.
c. downward-sloping
demand.
d. inferior
goods.
e. increasing
marginal utility.
ANS: B
55. Suppose
you are studying a production possibilities frontier (PPF) that has a bowed-out
shape relative to the origin. What causes this shape?
a. economic
growth
b. the
law of increasing relative cost
c. absolute
advantage
d. normative
economics
e. more
resources
ANS: B
57. Suppose
you find a production possibilities frontier (PPF) that is shaped like a
straight line. What can you determine about the production of the two goods?
a. Production
of the two goods is subject to decreasing relative cost.
b. Production
of the two goods is subject to increasing relative cost.
c. Production
of the two goods is subject to constant opportunity cost anywhere along the
PPF.
d. One
producer must have an absolute advantage in production.
e. More
resources will not cause the PPF to shift.
ANS: C
Michael
and Angelo are both artists who can create sculptures or paintings each day.
The following table describes their maximum outputs per day. Use this table to
answer the next four questions.
|
|
Sculptures
|
Paintings
|
|
Michael
|
10
|
5
|
|
Angelo
|
6
|
2
|
59. What
is Michael’s opportunity cost of a sculpture?
a. 2
paintings
b. 1/2
painting
c. 3
paintings
d. 1/3
sculpture
e. 1/2
sculpture
ANS: B
60. What
is Angelo’s opportunity cost of a sculpture?
a. 1/2
painting
b. 1/3
painting
c. 3
paintings
d. 1/3
sculpture
e. 6/10
sculpture
ANS: B
61. What
is Michael’s opportunity cost of a painting?
a. 1/2
painting
b. 1/2
sculpture
c. 3
paintings
d. 2
sculptures
e. 2
paintings
ANS: D
62. What
is Angelo’s opportunity cost of a painting?
a. 1/3
painting
b. 1/3
sculpture
c. 2/5
sculpture
d. 3
paintings
e. 3
sculptures
ANS: E
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