Question 1

Opportunity cost is represented on the production possibilities frontier by

Accepted Answer

Opportunity cost is the cost of the forgone alternative, which is represented on the production possibilities frontier by the amount of one good that must be given up to produce more of the other good. Therefore, the correct answer is C, which states that opportunity cost is the amount of good Y forgone when more of good X is produced.

Question 2

-The above table shows production points on Sweet-Tooth Land's production possibilities frontier. Which of the following statements is TRUE?

Accepted Answer

Producing 0 chocolate bars and 100 cans of cola is on the production possibilities frontier, indicating it is both attainable and an efficient use of resources.

Question 3

While producing on the production possibilities frontier, if additional units of a good could be produced at a constant opportunity cost, the production possibilities frontier would be

Accepted Answer

A constant opportunity cost means that the opportunity cost of producing an additional unit of a good remains the same, and thus the production possibilities frontier would be a straight line. A bowed outward PPF would indicate increasing opportunity costs, while a bowed inward PPF would indicate decreasing opportunity costs. A positively sloped PPF may have varying opportunity costs, but not necessarily constant ones.

Question 4

As residents of developing countries increase their chocolate consumption, the increased production of cocoa results in

Accepted Answer

Increased production of cocoa implies that more resources are allocated to cocoa production, which means there are fewer resources available for the production of other goods and services. This leads to an increased opportunity cost of producing cocoa, as producing more cocoa comes at the expense of producing less of other goods and services.

Question 5

-The above table shows production combinations on a country's production possibilities frontier. Which of the following is an example of a point that is unattainable?

Accepted Answer

The answer of 
-The above table shows production combinations on...

Question 6

-The above table shows production points on Sweet-Tooth Land's production possibilities frontier. A movement from ________ represents the greatest opportunity cost of increasing cola production.

Accepted Answer

The answer of 
-The above table shows production points on...

Question 7

-The above table shows production points on Sweet-Tooth Land's production possibilities frontier. What is the opportunity cost of one can of cola if Sweet-tooth Land moves from point C to point B?

Accepted Answer

The answer of 
-The above table shows production points on...

Question 8

At one point along a PPF, 50 tons of coffee and 100 tons of bananas are produced. At another point along the same PPF, 30 tons of coffee and 140 tons of bananas are produced. The opportunity cost of a ton of coffee between these points is

Accepted Answer

The answer of At one point along a PPF, 50...

Question 9

Opportunity cost is illustrated in a production possibilities frontier (PPF)by a movement

Accepted Answer

Opportunity cost is the trade-off between the production of two goods. As we move along the PPF, the opportunity cost of producing more of one good is giving up some of the production of another good. Therefore, the correct option would be D, which depicts a movement along the PPF, where gaining more of one good necessitates giving up some of the production of another good. Options A, B, and C do not accurately depict opportunity cost.

Question 10

-The table above lists six points on the production possibilities frontier for grain and cars. From this information you can conclude that production is inefficient if this economy produces

Accepted Answer

Production is inefficient if the economy is producing less than it could with the resources available. Choice C represents a point inside the production possibilities frontier, indicating inefficiency, as more of both goods could be produced with the available resources.

Question 11

-The above table shows production points on Sweet-Tooth Land's production possibilities frontier. Which of the following is an example of a point that is inefficient?

Accepted Answer

The answer of 
-The above table shows production points on...

Question 12

-The table above lists six points on the production possibilities frontier for grain and cars. What is the opportunity cost of producing the 5th ton of grain?

Accepted Answer

The answer of 
-The table above lists six points on...

Question 13

In one day, Sue can change the oil on 20 cars or change the tires on 20 cars. In one day, Fred can change the oil on 20 cars or change the tires on 10 cars. Sue's opportunity cost of changing oil is ________ than Fred's and her opportunity cost for changing tires is ________ than Fred's.

Accepted Answer

Sue can change either 20 oil or 20 tires in a day, while Fred can change either 20 oil or 10 tires in a day. Therefore, Sue's productivity is higher than Fred's because she can perform both tasks in one day while Fred can only do one. Sue's opportunity cost of changing oil is greater than Fred's because she has the ability to perform both tasks in one day. Her opportunity cost for changing tires is less than Fred's because it takes her the same amount of time to change tires, but she has the ability to also change oil in the same amount of time.

Question 14

When moving along the production possibilities frontier, opportunity cost is measured as the

Accepted Answer

Opportunity cost is the value of the next best alternative that must be given up or sacrificed in order to obtain something else. In terms of production, opportunity cost is measured as the decrease in the quantity produced of one good divided by the increase in the quantity produced of another good. This means that as an economy moves along the production possibilities frontier, it has to give up some of one good in order to produce more of the other good, and the opportunity cost is the ratio of the amount given up to the amount gained.

Question 15

-The table above lists six points on the production possibilities frontier for grain and cars. What is the opportunity cost of producing the 26th car?

Accepted Answer

The answer of 
-The table above lists six points on...

Question 16

-The above table shows production points on Sweet-Tooth Land's production possibilities frontier. What is the opportunity cost of one chocolate bar if Sweet-tooth Land moves from point C to point D?

Accepted Answer

Moving from point C to D, Sweet-Tooth Land produces 10 more chocolate bars (from 40 to 50) at the expense of 30 cans of cola (from 90 to 60). Therefore, the opportunity cost of one chocolate bar is 30 cans of cola divided by 10 chocolate bars, which equals 3 cans of cola per chocolate bar.

Question 17

When operating on its PPF, a country can produce 2 tons of butter and 200 cars OR 3 tons of butter and 150 cars. The opportunity cost of 1 ton of butter is ________ cars per ton of butter.

Accepted Answer

The opportunity cost of producing 1 additional ton of butter (going from 2 to 3 tons) is the reduction of 50 cars (from 200 to 150 cars).

Question 18

At one point along a PPF, 10 pizzas and 7 sandwiches can be produced. At another point along the same PPF, 9 pizzas and 10 sandwiches can be produced. The opportunity cost of a pizza between these points is ________ per pizza.

Accepted Answer

The answer of At one point along a PPF, 10...

Question 19

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.

Accepted Answer

The answer of At one point along a PPF 40...

Question 20

-The table above lists six points on the production possibilities frontier for grain and cars. Given this information, which of the following combinations is unattainable?

Accepted Answer

The answer of 
-The table above lists six points on...

Quiz 2: The Economic Problem

Opportunity cost is represented on the production possibilities frontier by

-The above table shows production points on Sweet-Tooth Land's production possibilities frontier. Which of the following statements is TRUE?

While producing on the production possibilities frontier, if additional units of a good could be produced at a constant opportunity cost, the production possibilities frontier would be

As residents of developing countries increase their chocolate consumption, the increased production of cocoa results in

-The above table shows production combinations on a country's production possibilities frontier. Which of the following is an example of a point that is unattainable?

-The above table shows production points on Sweet-Tooth Land's production possibilities frontier. A movement from ________ represents the greatest opportunity cost of increasing cola production.

-The above table shows production points on Sweet-Tooth Land's production possibilities frontier. What is the opportunity cost of one can of cola if Sweet-tooth Land moves from point C to point B?

At one point along a PPF, 50 tons of coffee and 100 tons of bananas are produced. At another point along the same PPF, 30 tons of coffee and 140 tons of bananas are produced. The opportunity cost of a ton of coffee between these points is

Opportunity cost is illustrated in a production possibilities frontier (PPF) by a movement

-The table above lists six points on the production possibilities frontier for grain and cars. From this information you can conclude that production is inefficient if this economy produces

-The above table shows production points on Sweet-Tooth Land's production possibilities frontier. Which of the following is an example of a point that is inefficient?

-The table above lists six points on the production possibilities frontier for grain and cars. What is the opportunity cost of producing the 5th ton of grain?

In one day, Sue can change the oil on 20 cars or change the tires on 20 cars. In one day, Fred can change the oil on 20 cars or change the tires on 10 cars. Sue's opportunity cost of changing oil is than Fred's and her opportunity cost for changing tires is than Fred's.

When moving along the production possibilities frontier, opportunity cost is measured as the

-The table above lists six points on the production possibilities frontier for grain and cars. What is the opportunity cost of producing the 26th car?

-The above table shows production points on Sweet-Tooth Land's production possibilities frontier. What is the opportunity cost of one chocolate bar if Sweet-tooth Land moves from point C to point D?

When operating on its PPF, a country can produce 2 tons of butter and 200 cars OR 3 tons of butter and 150 cars. The opportunity cost of 1 ton of butter is ________ cars per ton of butter.

At one point along a PPF, 10 pizzas and 7 sandwiches can be produced. At another point along the same PPF, 9 pizzas and 10 sandwiches can be produced. The opportunity cost of a pizza between these points is ________ per pizza.

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.

-The table above lists six points on the production possibilities frontier for grain and cars. Given this information, which of the following combinations is unattainable?