Question 1

Exhibit 3-4  Refer to Exhibit 3-4.Based on the production possibilities curve above,which of the following points are inefficient?

Accepted Answer

The answer of Exhibit 3-4  Refer to Exhibit 3-4.Based...

Question 2

The concept of opportunity cost is illustrated by:

Accepted Answer

The concept of opportunity cost is all about making choices and trade-offs. When we choose to produce more of one good, we have to give up the opportunity to produce more of another good. This is illustrated by a movement along the production possibilities curve, as production of one good falls in order to increase production of another. The opportunity cost is the value of the next best alternative foregone. This is why D is the best choice, and the other options do not accurately show the concept of opportunity cost.

Question 3

Exhibit 3-4  Refer to Exhibit 3-4.Moving from Point ____ to Point ____ will result in an increase in the quantity of both capital and consumption goods produced this period.

Accepted Answer

The answer of Exhibit 3-4  Refer to Exhibit 3-4.Moving...

Question 4

Exhibit 3-5  Refer to Exhibit 3-5.If the economy depicted in the diagram above chooses to shift more of its resources into clothing,it will have to give up:

Accepted Answer

The slope of the production possibilities curve represents the opportunity cost of producing one good in terms of the other. As more resources are shifted into clothing production, the economy will have to give up increasing amounts of food per unit of added clothing, as shown by the increasing slope of the curve. Therefore, choice (D) is correct.

Question 5

Exhibit 3-4  Refer to Exhibit 3-4.The opportunity cost of one more unit of a consumption good is greater at Point ____ than at Point ____.

Accepted Answer

The opportunity cost of one more unit of a consumption good is the slope of the production possibilities curve. At Point E, the slope of the curve (the opportunity cost) is relatively low, while at Point D, the slope of the curve (the opportunity cost) is relatively high. Therefore, the opportunity cost of one more unit of a consumption good is greater at Point D than at Point E.

Question 6

An economy is producing two goods,ice cream and cookies,and is currently operating efficiently.This economy can produce more cookies if:

Accepted Answer

The efficient operation of an economy means that it is producing at its maximum possible output given its resources. If more cookies are to be produced, the economy must reallocate some of its resources from ice cream production to cookie production. Therefore, the best choice to produce more cookies is to reduce the production of ice cream.

Question 7

What determines the position and shape of a society's production possibilities curve?

Accepted Answer

The position and shape of a society's production possibilities curve are determined by a combination of factors, including the physical resources available to that society, the level of technology used to transform those resources into goods and services, and the amount and type of capital and labor available. Therefore, option D is the correct answer.

Question 8

The production possibilities curve illustrates:

Accepted Answer

The production possibilities curve shows the maximum combinations of two goods that can be produced with a given set of resources and technology, assuming their use is efficient. This means that the economy cannot produce more of one good without sacrificing some of the production of the other good. Therefore, the answer is C, that when resources are currently being used efficiently, it is possible to increase production of one good only by sacrificing some of another good.

Question 9

When resources are used efficiently,you can produce more of one good,ceteris paribus,only by:

Accepted Answer

The law of opportunity cost states that to produce more of one good, you must produce less of another good. This is because resources are limited and must be allocated between different uses. Therefore, the best choice is D, producing less of another good to produce more of the first good efficiently. Choices A and B are incorrect because printing more money or charging a lower price for output do not increase the amount of resources available for production. Choice C is also incorrect because charging a higher price for output does not necessarily increase the efficiency of resource use.

Question 10

Exhibit 3-6  Refer to Exhibit 3-6.In the diagram,Point D is:

Accepted Answer

Point D is located on the production possibilities frontier, which represents the maximum output that a society can achieve with its given resources and technology. Thus, the point is efficient since it represents the full use of available resources to produce goods and services.

Question 11

Exhibit 3-6  Refer to Exhibit 3-6.In the diagram,Point A is:

Accepted Answer

The answer of Exhibit 3-6  Refer to Exhibit 3-6.In...

Question 12

Exhibit 3-5  Refer to Exhibit 3-5.If an economy operates at Point A on the production possibilities curve shown above,then:

Accepted Answer

The answer of Exhibit 3-5  Refer to Exhibit 3-5.If...

Question 13

A production possibilities curve is negatively sloped because:

Accepted Answer

The production possibilities curve represents the maximum combination of two goods that an economy can produce with its existing resources and technology. Once an economy operates on the frontier, it means it is already using all of its resources to produce goods. Therefore, to increase production of one good, it is necessary to reduce production of the other. This is why the production possibilities curve is negatively sloped - as we move down along the curve, we can produce more of one good only by sacrificing some of the production of the other good.

Question 14

The main reason economists are concerned about the problem of idle or unemployed resources is that:

Accepted Answer

Unemployed resources mean less production, which leads to a lower Gross Domestic Product (GDP) and a lower standard of living for the nation. This is the main concern of economists when it comes to idle or unemployed resources.

Question 15

Consider a production possibilities curve for an economy producing bicycles and video game players.It is possible to increase the production of bicycles without sacrificing video game players if:

Accepted Answer

Any of the above options could lead to an increase in the production of bicycles without sacrificing video game players. Technological progress could make it possible to produce bicycles more efficiently, while increased immigration could bring in more workers to produce bicycles. Moving from a point inside the production possibilities curve to a point on the curve could occur if resources are utilized more efficiently or if there is an increase in the availability of resources.

Question 16

The production possibilities curve is:

Accepted Answer

The production possibilities curve (PPC) is a graph that shows the different combinations of goods and services that an economy can produce with its available resources and technology. The PPC illustrates the tradeoffs that an economy must make between two goods or services, assuming that all resources are fully utilized. The PPC shows the limits of an economy's productive capacity, and any point on the curve represents a possible efficient allocation of resources.

Question 17

Exhibit 3-4  Refer to Exhibit 3-4.Moving from Point ____ to Point ____ will result in an increase in the production of capital goods,but a decrease in the production of consumption goods this period.

Accepted Answer

The answer of Exhibit 3-4  Refer to Exhibit 3-4.Moving...

Question 18

Which of the following is the most accurate statement about a production possibilities curve?

Accepted Answer

The production possibilities curve represents the maximum possible output combinations of two goods an economy can produce using its available resources and technology. Any point on or inside the curve is attainable with the given resources and technology, but any point outside the curve is unattainable given the current resources and technology. Therefore, option A and D are incorrect. Option B is also not accurate because an economy may not be fully utilizing its resources and can operate inside the production possibilities curve, producing at a point that is less than the maximum attainable output.

Question 19

Exhibit 3-4  Refer to Exhibit 3-4.The opportunity cost of one more unit of a capital good is greater at Point ____ than at Point ____.

Accepted Answer

The answer of Exhibit 3-4  Refer to Exhibit 3-4.The...

Question 20

Which of the following is an incorrect statement?

Accepted Answer

A large amount of unemployed resources will actually shift the production possibilities curve inward, as the economy is not utilizing all of its resources and is therefore producing less than it could be.

Quiz 3: Scarcity, Trade-Offs, and Production Possibilities

Exhibit 3-4 Refer to Exhibit 3-4.Based on the production possibilities curve above,which of the following points are inefficient?

The concept of opportunity cost is illustrated by:

Exhibit 3-4 Refer to Exhibit 3-4.Moving from Point to Point will result in an increase in the quantity of both capital and consumption goods produced this period.

Exhibit 3-5 Refer to Exhibit 3-5.If the economy depicted in the diagram above chooses to shift more of its resources into clothing,it will have to give up:

Exhibit 3-4 Refer to Exhibit 3-4.The opportunity cost of one more unit of a consumption good is greater at Point than at Point .

An economy is producing two goods,ice cream and cookies,and is currently operating efficiently.This economy can produce more cookies if:

What determines the position and shape of a society's production possibilities curve?

The production possibilities curve illustrates:

When resources are used efficiently,you can produce more of one good,ceteris paribus,only by:

Exhibit 3-6 Refer to Exhibit 3-6.In the diagram,Point D is:

Exhibit 3-6 Refer to Exhibit 3-6.In the diagram,Point A is:

Exhibit 3-5 Refer to Exhibit 3-5.If an economy operates at Point A on the production possibilities curve shown above,then: