Transcript Chapter 1: What is Economics?

Chapter 2: The Economic Problem
Parkin
Microeconomics, Eighth Edition
© 2008 Pearson Addison-Wesley. All rights reserved.
Any point on a production possibilities frontier
(PPF) itself is
A.
B.
C.
D.
equitable.
efficient.
unattainable.
inefficient.
Parkin
Microeconomics, Eighth Edition
© 2008 Pearson Addison-Wesley. All rights reserved.
At one point along a PPF 40 tons of wheat are
produced while 80 tons of rice are produced. At
another point along the same PPF, 41 tons of
wheat are produced while 70 tons of rice are
produced. The opportunity cost of producing a ton
of wheat between these points is ________ per
ton of wheat.
A.
B.
C.
D.
10 tons of rice
4/7 ton of rice
1/10 ton of rice
1/2 ton of rice
Parkin
Microeconomics, Eighth Edition
© 2008 Pearson Addison-Wesley. All rights reserved.
The fact of increasing opportunity costs means
that a production possibilities frontier will
A.
B.
C.
D.
bow outward.
shift outward over time.
be a straight line.
reach a maximum and then gradually
decrease.
Parkin
Microeconomics, Eighth Edition
© 2008 Pearson Addison-Wesley. All rights reserved.
The table shows the production possibilities frontier for
the economy of Sauria. As this economy increases its
production of guns along the production possibilities
frontier, the opportunity cost of guns
A. first rises and then
falls.
B. rises continuously.
C. remains constant.
D. falls continuously.
Parkin
Microeconomics, Eighth Edition
Production possibilities
Possibility
Pizza
(per hour)
Soda
(cases per
hour)
A
0
100
B
1
95
C
2
80
D
3
60
E
4
35
F
5
0
© 2008 Pearson Addison-Wesley. All rights reserved.
In the figure, how can the economy represented
by the production possibilities frontier move
from point C to point F ?
A. First move to point B and
then move to point F.
B. Increase the level of
technology.
C. Increase the available
amount of resources.
D. Redistribute the existing
resources to produce
more apples and fewer
oranges.
Parkin
Microeconomics, Eighth Edition
© 2008 Pearson Addison-Wesley. All rights reserved.
The table represents different points along a production
possibilities curve. What is the marginal cost of moving
from 2 bushels to 3 bushels of beans?
A. 21 bushels of carrots
per bushel of beans
B. 12 bushels of carrots
per bushel of beans
C. 3 bushels of carrots
per bushel of beans
D. 9 bushels of carrots
per bushel of beans
Parkin
Microeconomics, Eighth Edition
Quantity of beans
(bushels)
Quantity of carrots
(bushels)
5
0
4
5
8
9
2
12
1
14
0
15
© 2008 Pearson Addison-Wesley. All rights reserved.
Suppose the United States discovers a way to
produce clean nuclear fuel. The effect of this
discovery would be to
A. lead the United States to produce less
nuclear fuel.
B. shift the U.S. PPF outward.
C. force the United States to produce at a point
inside its PPF.
D. shift the U.S. PPF inward.
Parkin
Microeconomics, Eighth Edition
© 2008 Pearson Addison-Wesley. All rights reserved.
An economy produces only food and shelter. There are
two individuals in the economy: Bill and Mary. Mary's
opportunity cost of producing 1 unit of shelter is 2 units
of food. Bill's opportunity cost of producing 1 unit of
shelter is 4 units of food.
A. Mary has a comparative advantage over Bill in the
production of shelter.
B. Bill has an absolute advantage over Mary in the
production of shelter.
C. Mary has a comparative advantage over Bill in the
production of food.
D. Bill has a comparative advantage over Mary in the
production of shelter.
Parkin
Microeconomics, Eighth Edition
© 2008 Pearson Addison-Wesley. All rights reserved.
Suppose that in an hour Joe can prepare 10
sandwiches or 5 pizzas. The opportunity cost of
Joe producing one sandwich is
A.
B.
C.
D.
1 pizza.
2 pizzas.
5 pizzas.
1/2 pizza.
Parkin
Microeconomics, Eighth Edition
© 2008 Pearson Addison-Wesley. All rights reserved.
In the figure, Jill is producing at point A. Jill's
opportunity cost producing one pair of pants is
A.
B.
C.
D.
3 shirts.
3/5 shirt.
2 shirts.
5/3 shirt.
Parkin
Microeconomics, Eighth Edition
© 2008 Pearson Addison-Wesley. All rights reserved.