Question 1

If the United States, at the point where it is currently producing, must give up the production of 500 bicycles (B) to produce 20 additional tractors (T) with the same resources, its opportunity cost may be expressed as:

Accepted Answer

The opportunity cost is the value of the next best alternative forgone. In this case, for the production of 20 additional tractors, the United States must give up the production of 500 bicycles. Therefore, the opportunity cost of producing one tractor is the production of 25 bicycles (500/20). This can be expressed as 1B = 1/25T, making option B the correct answer.

Question 2

-(Exhibit: Production Possibilities Curve) In order to maximize output, this economy must:

Accepted Answer

Operating on the production possibilities curve (PPC) maximizes output by efficiently using all available resources. Points inside the curve, like B and D, represent underutilization, and points outside, like E, are unattainable with current resources.

Question 3

Canada, Mexico, and the United States have:

Accepted Answer

Canada, Mexico, and the United States have eliminated many trade barriers among themselves through the North American Free Trade Agreement (NAFTA), creating a free-trade area among the three countries.

Question 4

Which of the following statements is true?

Accepted Answer

The statement "Nations have generally moved toward freer international trade policies over the past few decades" is true. Many countries have embraced economic globalization and have reduced trade barriers to increase international trade and investment. This trend is evident in the creation of various free trade agreements and the establishment of the World Trade Organization (WTO) to oversee global trade rules.

Question 5

If Britain, at the point where it is currently producing, must give up the production of 75 hats to produce 25 additional sweaters, the opportunity cost of producing 4 sweaters is _______ hats.

Accepted Answer

To produce 25 additional sweaters, Britain has to give up the production of 75 hats, which means the opportunity cost of producing 1 sweater is 3 hats (75 hats/25 sweaters).

To produce 4 sweaters, Britain will have to give up the production of 12 hats (4 sweaters x 3 hats per sweater), making the opportunity cost of producing 4 sweaters 12 hats. Therefore, the correct answer is B.

Question 6

-(Exhibit: Production Possibilities Curve) Which of the following statements is false?

Accepted Answer

Point E represents a level of output that is beyond the current production possibilities frontier, indicating that it cannot be achieved simply by having more money. Achieving point E would require an increase in the economy's productive resources or an improvement in technology, not just more money.

Question 7

-(Exhibit: Production Possibilities Curve) If an economy is operating on its production possibilities curve, the law of increasing opportunity costs predicts that:

Accepted Answer

The law of increasing opportunity costs states that as production of one good increases, the opportunity cost of producing an additional unit (in terms of the other good that must be forgone) also increases. This is because resources are not equally efficient in producing all goods. So, as more tractors are produced, more and more drill presses must be given up to accommodate the increasing inefficiency in using resources for tractor production.

Question 8

The point on the production possibilities curve at which an economy will operate is determined by:

Accepted Answer

The point on the production possibilities curve at which an economy operates is determined by the demands of consumers, as it reflects the allocation of resources based on consumer preferences and needs.

Question 9

-(Exhibit: Production Possibilities Curve) The slope of the production possibilities curve between point B and point A is:

Accepted Answer

The slope of the production possibilities curve between two points is calculated by the change in the y-axis divided by the change in the x-axis. The negative sign indicates that as the production of one good increases, the production of the other good decreases, reflecting the opportunity cost. If the curve is linear between points A and B, a slope of -1.0 means for every unit increase in one good, there is a one unit decrease in the other, indicating a constant opportunity cost.

Question 10

Production possibilities curves:

Accepted Answer

Production possibilities curves illustrate the production choices available to an economy. They show the different combinations of two goods that can be produced with limited resources and technology.

Question 11

-(Exhibit: Production Possibilities Curve) Which of the following statements is true?

Accepted Answer

Every point on the production possibilities curve represents a combination of two goods or services that an economy can produce by fully utilizing all available resources and technologies efficiently. Points inside the curve indicate underutilization of resources, while points outside are unattainable with current resources and technology.

Question 12

Members of the EU (European Union):

Accepted Answer

The EU has established a single market, which means that goods, services, people, and capital can move freely within the member states without trade barriers such as tariffs, quotas, or regulations. Therefore, the EU has virtually eliminated all trade barriers within the community.

Question 13

The _______ model lays out the _______ available to the economy.

Accepted Answer

The production possibilities model lays out the different alternatives available to the economy in terms of producing different goods and services. This model shows the trade-offs that need to be made when deciding how to allocate resources between the production of different goods and services. On the other hand, the demand and supply model focuses on the prices of goods and services in the market, and how the interaction between buyers (demand) and sellers (supply) determines the market price.

Question 14

If the United States, at the point where it is currently producing, must give up the production of 500 bicycles (B) to produce 20 additional tractors (T) with the same resources, its opportunity cost may be expressed as:

Accepted Answer

The answer of If the United States, at the point...

Question 15

Different points on a production possibilities curve:

Accepted Answer

Different points on the production possibilities curve represent different combinations of two goods that can be produced with limited resources. Therefore, they yield different values of total output.

Question 16

If Britain, at the point where it is currently producing, must give up the production of 75 hats to produce 25 additional sweaters, the opportunity cost of producing 3 hats is _______ sweater(s).

Accepted Answer

The opportunity cost of producing 3 hats is calculated by dividing the number of hats (75) by the number of sweaters (25) to find the opportunity cost per hat, which is 3 hats per sweater. Therefore, for 3 hats, the opportunity cost is 1 sweater.

Question 17

-(Exhibit: Production Possibilities Curve) To move from point B to point C, _______ must be ________ to produce _______ .

Accepted Answer

Moving from point B to point C on a production possibilities curve typically involves sacrificing the production of one good to produce more of another. Choice A correctly identifies the trade-off between drill presses and tractors, consistent with how these curves illustrate opportunity cost.

Question 18

-(Exhibit: Production Possibilities Curve) Which of the following statements is true?

Accepted Answer

DC) Points A, B, and C are all feasible and maximum production points because they lie on the production possibilities curve, indicating that resources are being used efficiently to produce a mix of two goods.D) Point C is superior to point A in terms of the total output of both goods, as it lies further along the curve, indicating a higher production possibility.

Question 19

The absolute value of the slope of the production possibilities curve at any point:

Accepted Answer

The absolute value of the slope of the production possibilities curve at any point represents the opportunity cost, which is the quantity of the good on the vertical axis that must be given up to produce an additional unit of the good on the horizontal axis.

Question 20

-(Exhibit: Production Possibilities Curve) Which of the following statements is true?

Accepted Answer

Moving from point A to C on a Production Possibilities Curve typically involves a trade-off between two goods. The statement that moving from A to C involves a reduction of 5,000 drill presses to gain 4,000 tractors is a specific example of such a trade-off, indicating a movement along the curve where one good is sacrificed to gain more of another.

Quiz 17: Financial Markets

If the United States, at the point where it is currently producing, must give up the production of 500 bicycles (B) to produce 20 additional tractors (T) with the same resources, its opportunity cost may be expressed as:

-(Exhibit: Production Possibilities Curve) In order to maximize output, this economy must:

Canada, Mexico, and the United States have:

Which of the following statements is true?

If Britain, at the point where it is currently producing, must give up the production of 75 hats to produce 25 additional sweaters, the opportunity cost of producing 4 sweaters is _______ hats.

-(Exhibit: Production Possibilities Curve) Which of the following statements is false?

-(Exhibit: Production Possibilities Curve) If an economy is operating on its production possibilities curve, the law of increasing opportunity costs predicts that:

The point on the production possibilities curve at which an economy will operate is determined by:

-(Exhibit: Production Possibilities Curve) The slope of the production possibilities curve between point B and point A is:

Production possibilities curves:

-(Exhibit: Production Possibilities Curve) Which of the following statements is true?

Members of the EU (European Union) :

The _ model lays out the _ available to the economy.

If the United States, at the point where it is currently producing, must give up the production of 500 bicycles (B) to produce 20 additional tractors (T) with the same resources, its opportunity cost may be expressed as:

Different points on a production possibilities curve:

If Britain, at the point where it is currently producing, must give up the production of 75 hats to produce 25 additional sweaters, the opportunity cost of producing 3 hats is _______ sweater(s) .

-(Exhibit: Production Possibilities Curve) To move from point B to point C, _ must be to produce _ .

-(Exhibit: Production Possibilities Curve) Which of the following statements is true?

The absolute value of the slope of the production possibilities curve at any point:

-(Exhibit: Production Possibilities Curve) Which of the following statements is true?