Question 1

Exhibit 2-9  Refer to Exhibit 2-9. Who has the comparative advantage in the production of good B?
A)Alex
B)Adam
C)Both Alex and Adam
D)Neither Alex nor Adam

Accepted Answer

Alex has the lower opportunity cost of producing good B (1/2 unit of A) compared to Adam (2 units of A). Therefore, Alex has the comparative advantage in the production of good B.

Question 2

Jose has one evening in which to prepare for two exams and can employ one of two possible strategies:
 The opportunity cost of receiving a 92 on the statistics exam is __________ points on the economics exam.
A)12
B)11
C)16
D)77

Accepted Answer

The answer of Jose has one evening in which to...

Question 3

​Exhibit 2-10   Refer Exhibit 2-10. Person A has the comparative advantage in the production of _____________ and person B has the comparative advantage in the production of __________________.
A)X; Y
B)Y; X
C)neither good X nor good Y; neither good X nor good Y
D)both good X and good Y; neither good X nor good Y
E)​neither good X nor good Y; both good X and good Y

Accepted Answer

The answer of ​Exhibit 2-10   Refer Exhibit 2-10....

Question 4

Exhibit 2-9  Refer to Exhibit 2-9. For Adam, the opportunity cost of producing one unit of good A is ____________ unit(s)of good B.
A)3.00
B)0.33
C)0.75
D)1.33

Accepted Answer

The answer of Exhibit 2-9  Refer to Exhibit 2-9....

Question 5

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

Accepted Answer

The answer of ​Exhibit 2-10   Refer Exhibit 2-10....

Question 6

Explain how a technological advancement in one sector of the economy can lead to a change in the number of people who work in another sector of the economy.  Give an example to help support your answer.

Accepted Answer

The answer of Explain how a technological advancement in one...

Question 7

Exhibit 2-9  Refer to Exhibit 2-9. For Alex, the opportunity cost of producing one unit of good B is ____________ unit(s)of good A.
A)3.00
B)0.33
C)0.75
D)1.33

Accepted Answer

The opportunity cost of producing one unit of good B for Alex is 0.33 unit(s) of good A, calculated as (2A/6B) = 0.33. Therefore, Alex should produce more of good B as its opportunity cost in terms of good A is lower.

Question 8

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.
A)Alex, but not Adam,
B)Adam, but not Alex
C)Alex and Adam
D)neither Alex nor Adam

Accepted Answer

According to the principle of comparative advantage, both Alex and Adam should specialize in producing the good in which they have a lower opportunity cost (i.e., their comparative advantage). Then they should trade with each other to consume a combination of goods that lies beyond their individual production possibility frontiers (PPF). Therefore, both Alex and Adam can consume a combination of goods that lies beyond their PPF.

Question 9

Explain what productive efficiency means.  Describe how productive efficiency is represented by a PPF.

Accepted Answer

The answer of Explain what productive efficiency means.  Describe how productive...

Question 10

The endpoints of an economy's production possibilities frontier (PPF)for goods X and Y are: (2,000X, 0Y)and (0X, 500Y). Furthermore, the opportunity cost between these two goods is always constant. Which of the following combinations of the two goods, X and Y, lies on the economy's PPF?
A)400 units of X and  200 units of Y
B)600 units of X and  250 units of Y
C)400 units of X and 150 units of Y
D)1,000 units of X and  250 units of Y
E)300 units of X and  150 units of Y

Accepted Answer

Since the PPF is a straight line, the opportunity cost between the two goods is always constant, meaning that the slope of the PPF is constant. The slope of the PPF is given by the change in the quantity of Y over the change in the quantity of X. 
From the endpoints of the PPF, we can calculate that the slope is:

(500Y-0Y) / (0X-2000X) = 0.25

Therefore, any combination of X and Y that has a slope of 0.25 lies on the PPF. 
Choice D has a slope of 250Y/1000X = 0.25 and therefore lies on the PPF.

Question 11

The economy can produce 0X and 15Y, 10X and 10Y, 20X and 5Y, or 30X and 0Y. It follows that opportunity cost of 1X is ___Y.
A)5.0
B)0.5
C)2.5
D)1.0
E)2.0

Accepted Answer

Opportunity cost measures the trade-off between producing one good over another. To find the opportunity cost of 1X, we need to compare the different production possibilities. For example, moving from producing 0X to producing 15Y requires giving up the production of 1X. This means that the opportunity cost of 1X is 15Y. Doing the same for the other possibilities, we get:

- The opportunity cost of 1X when moving from 0X to 15Y is 15Y/1X = 15Y
- The opportunity cost of 1X when moving from 10X to 10Y is 10Y/10X = 1Y/1X = 1Y
- The opportunity cost of 1X when moving from 20X to 5Y is 5Y/20X = 1Y/4X = 0.25Y/1X
- The opportunity cost of 1X when moving from 30X to 0Y is 0Y/30X = 0Y/1X = 0

The lowest opportunity cost of 1X is therefore 0.5Y (which occurs when moving from 20X to 5Y). This means that producing 1X only costs half a unit of Y, making B) 0.5 the best choice.

Question 12

Exhibit 2-9  Refer to Exhibit 2-9. For Alex, the opportunity cost of producing one unit of good A is ____________ unit(s)of good B.
A)3.00
B)0.33
C)0.75
D)1.33

Accepted Answer

The answer of Exhibit 2-9  Refer to Exhibit 2-9....

Question 13

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 answer of Assume that two products are being produced:...

Question 14

Give a definition of an advance in technology . Suppose that you are drawing a PPF for civilian goods and military goods, describe the effect on the PPF of an advance in technology in both civilian goods and military goods.  How would the impact on the PPF be different if the technological improvement only helped in the production of military goods, but not civilian goods?

Accepted Answer

The answer of Give a definition of an advance in...

Question 15

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.
A)3.00
B)0.33
C)0.75
D)1.33

Accepted Answer

The answer of Exhibit 2-9  Refer to Exhibit 2-9....

Question 16

Using your own words, describe the law of increasing opportunity costs.   Be sure to explain why this phenomenon occurs and how it helps to contribute to the shape of the production possibilities frontier.

Accepted Answer

The answer of Using your own words, describe the law...

Question 17

Why is the production possibilities frontier (PPF)typically bowed-outward? Under what circumstances would the PPF be a straight line?

Accepted Answer

The answer of Why is the production possibilities frontier (PPF)typically...

Quiz 2: Production Possibilities Frontier Framework

Exhibit 2-9 Refer to Exhibit 2-9. Who has the comparative advantage in the production of good B?

Jose has one evening in which to prepare for two exams and can employ one of two possible strategies: The opportunity cost of receiving a 92 on the statistics exam is __________ points on the economics exam.

Exhibit 2-10 Refer Exhibit 2-10. Person A has the comparative advantage in the production of _ and person B has the comparative advantage in the production of ______.

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

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

Explain how a technological advancement in one sector of the economy can lead to a change in the number of people who work in another sector of the economy. Give an example to help support your answer.

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

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.

Explain what productive efficiency means. Describe how productive efficiency is represented by a PPF.

The endpoints of an economy's production possibilities frontier (PPF) for goods X and Y are: (2,000X, 0Y) and (0X, 500Y) . Furthermore, the opportunity cost between these two goods is always constant. Which of the following combinations of the two goods, X and Y, lies on the economy's PPF?

The economy can produce 0X and 15Y, 10X and 10Y, 20X and 5Y, or 30X and 0Y. It follows that opportunity cost of 1X is ___Y.

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

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.

Using your own words, describe the law of increasing opportunity costs. Be sure to explain why this phenomenon occurs and how it helps to contribute to the shape of the production possibilities frontier.

Why is the production possibilities frontier (PPF)typically bowed-outward? Under what circumstances would the PPF be a straight line?

Quiz 2: Production Possibilities Frontier Framework

Exhibit 2-9 Refer to Exhibit 2-9. Who has the comparative advantage in the production of good B?

Jose has one evening in which to prepare for two exams and can employ one of two possible strategies: The opportunity cost of receiving a 92 on the statistics exam is __________ points on the economics exam.

​Exhibit 2-10 Refer Exhibit 2-10. Person A has the comparative advantage in the production of _____________ and person B has the comparative advantage in the production of __________________.

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

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

Explain how a technological advancement in one sector of the economy can lead to a change in the number of people who work in another sector of the economy. Give an example to help support your answer.

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

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.

Explain what productive efficiency means. Describe how productive efficiency is represented by a PPF.

The endpoints of an economy's production possibilities frontier (PPF) for goods X and Y are: (2,000X, 0Y) and (0X, 500Y) . Furthermore, the opportunity cost between these two goods is always constant. Which of the following combinations of the two goods, X and Y, lies on the economy's PPF?

The economy can produce 0X and 15Y, 10X and 10Y, 20X and 5Y, or 30X and 0Y. It follows that opportunity cost of 1X is ___Y.

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

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.

Using your own words, describe the law of increasing opportunity costs. Be sure to explain why this phenomenon occurs and how it helps to contribute to the shape of the production possibilities frontier.

Why is the production possibilities frontier (PPF)typically bowed-outward? Under what circumstances would the PPF be a straight line?

Exhibit 2-10 Refer Exhibit 2-10. Person A has the comparative advantage in the production of _ and person B has the comparative advantage in the production of ______.

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