Question 1

The Great Depression of the 1930s,with a large number of workers and factories unemployed,would be represented in a production possibility frontier graph by __________.

Accepted Answer

The Great Depression of the 1930s resulted in a decrease in production and increase in unemployment, which means that the economy was operating below its potential. Thus, the production possibility frontier would shift inward, and the economy would operate at a point inside the frontier.

Question 2

Figure 2.5 
-Refer to Figure 2.5.If the economy is currently producing at point E,what is the opportunity cost of moving to point D?

Accepted Answer

Moving from point E to point D means producing 2 thousand less hammers and 6 thousand more wrenches. Therefore, the opportunity cost is giving up 2 thousand hammers in order to gain 6 thousand wrenches, which is an opportunity cost of 3 wrenches per hammer (6/2). Thus, the opportunity cost of moving to point D is giving up 8 thousand wrenches (3 wrenches/hammer x 2 thousand hammers = 6 thousand wrenches foregone + the 2 thousand gained at point D).

Question 3

Figure 2.5 
-Refer to Figure 2.5.If the economy is currently producing at point C,what is the opportunity cost of moving to point B?

Accepted Answer

Moving from point C to point B on a production possibility frontier typically involves increasing the production of one good at the expense of another. The opportunity cost is the amount of the other good that must be given up to increase production of the first good. In this case, moving from C to B involves giving up the production of wrenches to produce more hammers. The specific numbers (10 thousand wrenches, 13 thousand hammers, etc.) would depend on the details of the production possibility frontier depicted in Figure 2.5, which is not provided here. However, the correct answer is based on the assumption that the question refers to a specific numerical value of opportunity cost in terms of wrenches or hammers.

Question 4

Figure 2.4 
-Refer to Figure 2.4. If the economy is currently producing at point X,the opportunity cost of moving to point Y is ___________.

Accepted Answer

Moving from point X to point Y involves increasing the production of steel, which means reducing the production of paper. The correct opportunity cost is the amount of paper forgone, which is 5 million tonnes, as indicated by the difference in paper production between points X and Y.

Question 5

Figure 2.4 
-Refer to Figure 2.4.If the economy is currently producing at point Y,the opportunity cost of moving to point W is __________.

Accepted Answer

The answer of Figure 2.4 
-Refer to Figure 2.4.If the...

Question 6

Figure 2.5 
-Refer to Figure 2.5.If the economy is currently producing at point E,what is the opportunity cost of moving to point B?

Accepted Answer

The answer of Figure 2.5 
-Refer to Figure 2.5.If the...

Question 7

Figure 2.3  Figure 2.3 shows various points on three different production possibility frontiers for a nation.
-Refer to Figure 2.3.Consider the following events: 
A.an increase in the patent protection period to 30 years
B.an increase of a nation's capital stock
C.an improved property rights system
Which of the events listed above could cause a movement from V to W?

Accepted Answer

An improved property rights system (event c) can lead to a shift from point V to point W on a production possibility frontier. This is because better property rights lead to greater security of ownership and enable firms to invest more in long-term projects, leading to an increase in the overall level of productivity. An increase in the patent protection period (event a) is also likely to increase productivity in the long run, but it is not clear how this could directly cause a shift from V to W on the production possibility frontier. An increase in a nation's capital stock (event b) is also likely to increase productivity, but it is unclear how this alone could lead to a shift from V to W without other factors such as improved technology or skills.

Question 8

According to the production possibility model,if more resources are allocated to the production of physical and human capital,then which of the following is likely to happen?

Accepted Answer

According to the production possibility model, if more resources are allocated to the production of physical and human capital, there will be fewer resources available for producing consumer goods. This will lead to a decrease in the production of goods for consumption today. Therefore, the best choice is A.

Question 9

Figure 2.3  Figure 2.3 shows various points on three different production possibility frontiers for a nation.
-Refer to Figure 2.3.A movement from ________ could occur because of an influx of immigrant labour.

Accepted Answer

An influx of immigrant labour would increase the nation's labor force, thus enabling it to produce more goods and services. This would cause the production possibility frontier to shift outward, from PP1 to PP2. As a result, the nation could move from point W to point Z which represents a higher level of output for both goods.

Question 10

If society decides it wants more of one good and all resources are fully utilised,then________.

Accepted Answer

If all resources are fully utilised and society decides it wants more of one good, it must divert resources from the production of another good, resulting in the opportunity cost of giving up some of that other good. This is a concept known as opportunity cost, where the cost of producing one good is the forgone production of another good. The other choices are not applicable in this scenario.

Question 11

Suppose there is no unemployment in the economy and society decides that it wants more of one good.Which of the following statements is true?

Accepted Answer

The answer of Suppose there is no unemployment in the...

Question 12

Figure 2.6  Figure 2.6 above shows the production possibility frontier for Vidalia, a nation that produces two goods, roses and orchids.
-Refer to Figure 2.6.What is the opportunity cost of 80 dozen orchids?

Accepted Answer

The answer of Figure 2.6  Figure 2.6 above shows...

Question 13

Figure 2.3  Figure 2.3 shows various points on three different production possibility frontiers for a nation.
-Refer to Figure 2.3.Consider the following events:

A.an increase in the unemployment rate
B.general technological advancement
C.a decrease in consumer wealth
Which of the events listed above could cause a movement from X to V?

Accepted Answer

A movement from X to V represents a decrease in the level of production, which is most likely caused by an increase in the unemployment rate, leading to a decrease in the availability of resources and a decrease in the level of production. General technological advancement (B) would likely shift the production possibility frontier outward, while a decrease in consumer wealth (C) may lead to a decrease in demand for goods and services, but would not directly affect the production possibility frontier.

Question 14

Jane can bake either a combination of 25 cakes and 15 pies or a combination of 10 cakes and 20 pies.If she now bakes 10 cakes and 20 Pies,the opportunity cost of baking an additional 15 cakes is _________.

Accepted Answer

The answer of Jane can bake either a combination of...

Question 15

Figure 2.3  Figure 2.3 shows various points on three different production possibility frontiers for a nation.
-Refer to Figure 2.3.Consider the following events: 
A.a decrease in the unemployment rate
B.an increase in a nation's money supply
C.an influx of immigrant workers
Which of the events listed above could cause a movement from X to Z?

Accepted Answer

The answer of Figure 2.3  Figure 2.3 shows various...

Question 16

What is the opportunity cost of taking a semester long economics class?

Accepted Answer

The opportunity cost of taking a semester long economics class is the highest value of an alternative use of the time and money spent on the class. This means that if you were not taking the economics class, you could have used that time and money on something else that you value more. Therefore, the opportunity cost depends on the individual and their alternatives, and it is not just the cost of tuition and fees or the value of the time spent in the classroom.

Question 17

Figure 2.3  Figure 2.3 shows various points on three different production possibility frontiers for a nation.
-Refer to Figure 2.3.A movement from ________ is the result of negative technological change in plastic production.

Accepted Answer

The answer of Figure 2.3  Figure 2.3 shows various...

Question 18

Figure 2.5 
-Refer to Figure 2.5.What is the opportunity cost of moving to point B if the economy is currently producing at point A?

Accepted Answer

The answer of Figure 2.5 
-Refer to Figure 2.5.What is...

Question 19

Figure 2.5 
-Refer to Figure 2.5.If the economy is currently producing at point D,what is the opportunity cost of moving to point B?

Accepted Answer

The answer of Figure 2.5 
-Refer to Figure 2.5.If the...

Question 20

Figure 2.3  Figure 2.3 shows various points on three different production possibility frontiers for a nation.
-Refer to Figure 2.3.Consider the following movements: 
A.from point V to point W
B.from point W to point Y
C.from point Y to point Z
Which of the movements listed above represents advancements in technology with respect to only plastic production?

Accepted Answer

Movement from point Y to point Z represents advancements in technology with respect to only plastic production, as it allows for an increase in plastic output without sacrificing the production of other goods. Movements from point V to point W and from point W to point Y represent a tradeoff between plastic production and the production of other goods, indicating no technological advancement in plastic production alone.

Quiz 2: Choices and Trade-Offs in the Market

The Great Depression of the 1930s,with a large number of workers and factories unemployed,would be represented in a production possibility frontier graph by __________.

Figure 2.5 -Refer to Figure 2.5.If the economy is currently producing at point E,what is the opportunity cost of moving to point D?

Figure 2.5 -Refer to Figure 2.5.If the economy is currently producing at point C,what is the opportunity cost of moving to point B?

Figure 2.4 -Refer to Figure 2.4. If the economy is currently producing at point X,the opportunity cost of moving to point Y is ___________.

Figure 2.4 -Refer to Figure 2.4.If the economy is currently producing at point Y,the opportunity cost of moving to point W is __________.

Figure 2.5 -Refer to Figure 2.5.If the economy is currently producing at point E,what is the opportunity cost of moving to point B?

According to the production possibility model,if more resources are allocated to the production of physical and human capital,then which of the following is likely to happen?

Figure 2.3 Figure 2.3 shows various points on three different production possibility frontiers for a nation. -Refer to Figure 2.3.A movement from ________ could occur because of an influx of immigrant labour.

If society decides it wants more of one good and all resources are fully utilised,then________.

Suppose there is no unemployment in the economy and society decides that it wants more of one good.Which of the following statements is true?

Figure 2.6 Figure 2.6 above shows the production possibility frontier for Vidalia, a nation that produces two goods, roses and orchids. -Refer to Figure 2.6.What is the opportunity cost of 80 dozen orchids?

Jane can bake either a combination of 25 cakes and 15 pies or a combination of 10 cakes and 20 pies.If she now bakes 10 cakes and 20 Pies,the opportunity cost of baking an additional 15 cakes is _________.

What is the opportunity cost of taking a semester long economics class?

Figure 2.3 Figure 2.3 shows various points on three different production possibility frontiers for a nation. -Refer to Figure 2.3.A movement from ________ is the result of negative technological change in plastic production.

Figure 2.5 -Refer to Figure 2.5.What is the opportunity cost of moving to point B if the economy is currently producing at point A?

Figure 2.5 -Refer to Figure 2.5.If the economy is currently producing at point D,what is the opportunity cost of moving to point B?