Question 1

If production point is inside the production possibilities frontier

Accepted Answer

If the production point is inside the production possibilities frontier, it means that the economy is not utilizing all its resources efficiently to produce the maximum possible output of goods. This is a situation of inefficiency because the resources are not being used to their full potential.

Question 2

-The above figure illustrates that if this country wishes to move from its current production point labeled ʺCurrentʺ) and have 10 more tons of food, it can do this by producing

Accepted Answer

To produce 10 more tons of food, the country must reallocate resources, which typically involves producing less of another good, such as clothing. The figure likely shows a trade-off, indicating that 5 fewer tons of clothing would allow for the production of 10 more tons of food.

Question 3

Using the production possibilities frontier model, unemployment is described as producing at a point

Accepted Answer

Unemployment is described as producing at a point inside the PPF curve because it implies that there are unused resources and the economy is not producing at its full potential. This can occur due to various reasons such as cyclical downturns, structural shifts, or seasonal fluctuations.

Question 4

Production points inside the production possibilities frontier

Accepted Answer

Production points inside the production possibilities frontier indicate that not all resources are being used efficiently, leading to unused or misallocated resources.

Question 5

If a society is operating at a point inside its production possibilities frontier, then this societyʹs

Accepted Answer

If a society is operating inside its production possibilities frontier, it means that it is not utilizing all of its available resources or it is utilizing them inefficiently. This could be due to a lack of technological advancement, inadequate investment in capital, or inefficient allocation of resources. Therefore, the best choice is B, resources are being inefficiently utilized.

Question 6

A country that must decrease production of one good in order to increase the production of another

Accepted Answer

This scenario describes a country that is currently not producing at its maximum potential and therefore has room to reallocate its resources towards the production of a different good. This means that the country is operating on its production possibilities frontier, but not yet at its maximum point of efficiency.

Question 7

Some time ago the government of China required many highly skilled technicians and scientists to engage in unskilled agricultural labor in order to develop ʺproper social attitudes.ʺ This policy probably caused China to produce

Accepted Answer

By requiring highly skilled technicians and scientists to engage in unskilled labor, China likely caused a decrease in productivity and efficiency, resulting in a shift inward of its production possibilities frontier. This means that China is now producing less of both agricultural and high-technology goods than it could have produced before the policy was implemented.

Question 8

A reduction in the amount of unemployment

Accepted Answer

A reduction in unemployment means that more resources (labor) are being utilized, moving the economy closer to its potential output, represented by the production possibilities frontier.

Question 9

Any point on a production possibilities frontier PPF) itself is

Accepted Answer

Any point on the PPF represents the maximum combination of two goods that can be produced using all available resources. Thus, it is production efficient.

Question 10

Samʹs production possibilities frontier has good A on the horizontal axis and good B on the vertical axis. If Sam is producing at a point inside his frontier, then he

Accepted Answer

If Sam is producing inside his production possibilities frontier, it means he is not using all his resources efficiently. Therefore, he can increase the production of both goods without needing additional resources.

Question 11

-The figure above shows Rogerʹs production possibilities frontier. Point a is an __________point and at that point production is__________ .

Accepted Answer

Point a is attainable because it lies on the production possibilities frontier, but it is inefficient because it does not utilize all available resources fully.

Question 12

Suppose the country of Popcorn produces only jets and corn. If Popcorn cannot produce any more jets without giving up corn, we say that Popcorn has achieved

Accepted Answer

When a country is producing at a level where it cannot produce any more of one good without giving up some production of another, it has achieved production efficiency. This means that the country has allocated its resources in the most efficient way possible to maximize output. Therefore, option A is the correct answer. Option B is incorrect because the concept of opportunity cost refers to the trade-offs a country faces when producing one good instead of another, whereas the question explicitly states that there is no opportunity for increased production of jets without giving up corn. Option C refers to the additional cost of producing one more unit, which is not relevant here. Option D refers to the additional benefit received from consuming one more unit, which is also not relevant to this question.

Question 13

A society that is producing on its production possibilities frontier is

Accepted Answer

A society that is producing on its production possibilities frontier is fully utilizing all of its productive resources. It is operating at the maximum possible efficiency given its current level of technology and resources.

Question 14

If an economy is operating at a point inside the production possibilities frontier, then

Accepted Answer

If an economy is operating inside the PPF, it means that the available resources are not being used efficiently. This could be due to the lack of technology, skills, or adequate capital. As a result, the economy is producing less than its maximum potential.

Question 15

A point inside a production possibilities frontier

Accepted Answer

A point inside the production possibilities frontier indicates that resources are not being fully utilized or are misallocated. It represents a situation where the economy is not producing at its maximum potential given the available resources.

Question 16

A situation in which some resources are NOT fully utilized is represented in a production possibilities frontier diagram by

Accepted Answer

A point inside the production possibilities frontier represents a situation in which resources are not fully utilized. This occurs when an economy is operating inefficiently or below its potential.

Question 17

A point inside a production possibilities frontier

Accepted Answer

A point inside the production possibilities frontier indicates that the resources are not fully utilized or unemployed. Therefore, choice B is the correct answer. Choices A, C, and D are not true since a point inside the production possibilities frontier is less efficient, attainable, and implied excess labor or not enough capital, respectively.

Question 18

When resources are assigned to inappropriate tasks, that is, tasks for which they are not the best match, the result will be producing at a point

Accepted Answer

Assigning resources to inappropriate tasks means that they are not being used efficiently, resulting in a production point that is below the potential production point on the PPF. Therefore, the production point will be inside the PPF.

Question 19

A president of the United States promises to produce more defense goods without any decreases in the production of other goods. This promise can be valid

Accepted Answer

If the United States is producing at a point inside its production possibilities frontier, it means there are underutilized resources or inefficiencies, allowing for an increase in defense goods without reducing the production of other goods.

Question 20

If a country must decrease current consumption to increase the amount of capital goods it produces today, then it must

Accepted Answer

If a country must decrease current consumption to increase the amount of capital goods it produces today, then it is operating at a point inside the production possibilities frontier. By shifting its production towards more capital goods, it will move towards the production possibilities frontier and eventually shift the frontier outward due to technological advancements. Therefore, option A is the correct choice.

Quiz 2: The Economic Problem

If production point is inside the production possibilities frontier

-The above figure illustrates that if this country wishes to move from its current production point labeled ʺCurrentʺ) and have 10 more tons of food, it can do this by producing

Using the production possibilities frontier model, unemployment is described as producing at a point

Production points inside the production possibilities frontier

If a society is operating at a point inside its production possibilities frontier, then this societyʹs

A country that must decrease production of one good in order to increase the production of another

Some time ago the government of China required many highly skilled technicians and scientists to engage in unskilled agricultural labor in order to develop ʺproper social attitudes.ʺ This policy probably caused China to produce

A reduction in the amount of unemployment

Any point on a production possibilities frontier PPF) itself is

Samʹs production possibilities frontier has good A on the horizontal axis and good B on the vertical axis. If Sam is producing at a point inside his frontier, then he

-The figure above shows Rogerʹs production possibilities frontier. Point a is an point and at that point production is .

Suppose the country of Popcorn produces only jets and corn. If Popcorn cannot produce any more jets without giving up corn, we say that Popcorn has achieved

A society that is producing on its production possibilities frontier is

If an economy is operating at a point inside the production possibilities frontier, then

A point inside a production possibilities frontier

A situation in which some resources are NOT fully utilized is represented in a production possibilities frontier diagram by

A point inside a production possibilities frontier

When resources are assigned to inappropriate tasks, that is, tasks for which they are not the best match, the result will be producing at a point

A president of the United States promises to produce more defense goods without any decreases in the production of other goods. This promise can be valid

If a country must decrease current consumption to increase the amount of capital goods it produces today, then it must