Question 1

An outward shift of a nation's production possibilities frontier represents

Accepted Answer

An outward shift of a nation's production possibilities frontier (PPF) represents economic growth, as it indicates an increase in the potential production of goods and services in the economy. This can be due to factors such as technological advancements, increased capital inputs, and expansion of the labor force. The other options are not correct as they do not accurately describe the concept of a PPF shift.

Question 2

Table 2-1
Production choices for Tomaso's Trattoria
 
-Refer to Table 2-1.Assume that Tomaso's Trattoria only produces pizzas and calzones.A combination of 24 pizzas and 30 calzones would appear

Accepted Answer

A combination of 24 pizzas and 30 calzones would appear along Tomaso's production possibilities frontier because it is a point on the frontier that represents the maximum possible output of both pizzas and calzones given the available resources.

Question 3

________ marginal opportunity cost implies that the more resources already devoted to any activity, the payoff from allocating yet more resources to that activity increases by progressively smaller amounts.

Accepted Answer

Increasing marginal opportunity cost implies that as more resources are devoted to an activity, the additional benefit gained from those resources decreases, meaning the payoff increases by progressively smaller amounts.

Question 4

Table 2-1
Production choices for Tomaso's Trattoria
 
-Refer to Table 2-1.Assume that Tomaso's Trattoria only produces pizzas and calzones.Tomaso faces ________ opportunity costs in the production of pizzas and calzones.

Accepted Answer

Tomaso's Trattoria faces constant opportunity costs in the production of pizzas and calzones, meaning that the trade-off between producing pizzas and calzones remains the same regardless of the quantity produced.

Question 5

Economic decline (negative growth)is represented on a production possibilities frontier model by the production possibility frontier

Accepted Answer

Economic decline (negative growth) represents a decrease in the production capacity of an economy. This is shown on the production possibility frontier by a shift inward, indicating a reduction in the maximum production possibilities for the economy.

Question 6

Table 2-1
Production choices for Tomaso's Trattoria
 
-Refer to Table 2-1.Assume that Tomaso's Trattoria only produces pizzas and calzones.A combination of 24 pizzas and 15 calzones would appear

Accepted Answer

The answer of Table 2-1
Production choices for Tomaso's Trattoria
 
-Refer...

Question 7

An inward shift of a nation's production possibilities frontier can occur due to

Accepted Answer

A natural disaster like a hurricane or bad earthquake can lead to destruction of infrastructure, loss of resources and reduction in productivity, leading to an inward shift of a nation's production possibilities frontier.

Question 8

Figure 2-3
 
-Refer to Figure 2-3.Sergio Vignetto raises cattle and llamas on his land.A portion of his land is more suitable for raising cattle, and the other portion is better suited for raising llamas.Which of the graphs in Figure 2-3 represent his production possibilities frontier that displays increasing opportunity costs?

Accepted Answer

Graph C shows a concave shape, indicating increasing opportunity costs as the production of one good increases. This is because Sergio Vignetto has to give up more and more of the other good to produce more of the first good. Graph A is a straight line, indicating constant opportunity costs, and Graph B is a bowed-out shape, indicating decreasing opportunity costs.

Question 9

Table 2-1
Production choices for Tomaso's Trattoria
 
-Refer to Table 2-1.Assume that Tomaso's Trattoria only produces pizzas and calzones.A combination of 36 pizzas and 30 calzones would appear

Accepted Answer

A combination of 36 pizzas and 30 calzones would appear outside Tomaso's production possibilities frontier if it exceeds the maximum production capacity given the available resources and technology.

Question 10

Figure 2-2
  
Figure 2-2 above shows the production possibilities frontier for Mendonca, an agrarian nation that produces two goods, meat and vegetables.
-Refer to Figure 2-2.The linear production possibilities frontier in the figure indicates that

Accepted Answer

The linear production possibilities frontier indicates that the trade-off between producing meat and vegetables is constant. This means that Mendonca does not have a comparative advantage or disadvantage in either good and that the opportunity cost of producing one good over the other remains the same regardless of how much of each good is produced. Choice A and B cannot be determined from the information given and choice D is not correct as the production possibilities frontier is linear, not curved, indicating that it is equally expensive to produce each additional unit of meat or vegetables.

Question 11

Without an increase in the supply of the factors of production, how can a nation achieve economic growth?

Accepted Answer

Technological advancement can lead to increased productivity and efficiency, allowing for more output with the same amount of resources. This can lead to economic growth without an increase in the supply of factors of production.

Question 12

Increasing opportunity cost is represented by a ________ production possibilities frontier.

Accepted Answer

A bowed out production possibilities frontier indicates that as more of one good is produced, the opportunity cost of producing that good increases. This means that society must give up increasing amounts of the other good for each additional unit of the first good produced. As a result, the trade-off becomes more costly, and the curve bows outward. Therefore, increasing opportunity cost is represented by a bowed out production possibilities frontier.

Question 13

If opportunity costs are constant, the production possibilities frontier would be graphed as

Accepted Answer

If opportunity costs are constant, the production possibilities frontier would exhibit a constant slope and be graphed as a negatively sloped straight line. This implies that the opportunity cost of producing one good in terms of the other remains constant, despite changes in production levels.

Question 14

Table 2-2
Production choices for Billie's Bedroom Shop
 
-Refer to Table 2-2.Assume that Billie's Bedroom Shop only produces pillows and blankets.A combination of 9 pillows and 21 blankets would appear

Accepted Answer

A combination of 9 pillows and 21 blankets would appear along Billie's production possibilities frontier because it is a point on the frontier, meaning that Billie can produce this combination of goods with her current resources and technology.

Question 15

Table 2-2
Production choices for Billie's Bedroom Shop
 
-Refer to Table 2-2.Assume that Billie's Bedroom Shop only produces pillows and blankets.Billie faces ________ opportunity costs in the production of pillows and blankets.

Accepted Answer

Since the production possibilities are displayed as a straight-line graph with a constant slope, it indicates that the opportunity cost for producing pillows and blankets is constant. This implies that Billie can manufacture pillows and blankets in any quantity without trade-offs or opportunity costs changing. Consequently, the best option would be to produce at point D, where the production of 60 blankets and 0 pillows is optimal, utilizing all the available resources.

Question 16

A production possibilities frontier with a bowed-outward shape indicates

Accepted Answer

The bowed-outward shape of the production possibilities frontier indicates increasing opportunity costs as more and more of one good is produced. This means that the more resources are devoted to producing one good, the higher the opportunity cost becomes in terms of the output of the other good. This is because resources are not perfectly adaptable to producing both goods and are more efficient at producing one good than the other. As a result, as more and more of one good is produced, increasing amounts of the other good must be given up, resulting in a steeper slope of the PPF.

Question 17

The slope of a production possibilities frontier

Accepted Answer

The slope of the production possibilities frontier measures the opportunity cost of producing one more unit of a good. Therefore, option D is the correct answer. Option A is incorrect as the slope does have economic relevance and meaning. Option B is incorrect because the slope can vary depending on the production possibilities frontier. Option C is incorrect because the slope can be constant in certain situations.

Question 18

Table 2-2
Production choices for Billie's Bedroom Shop
 
-Refer to Table 2-2.Assume that Billie's Bedroom Shop only produces pillows and blankets.A combination of 27 pillows and 14 blankets would appear

Accepted Answer

A combination of 27 pillows and 14 blankets would appear outside Billie's production possibilities frontier because it represents a level of production that exceeds the shop's current resources or capabilities.

Question 19

Figure 2-3
 
-Refer to Figure 2-3.Sergio Vignetto raises cattle and llamas on his land.His land is equally suitable for raising either animal.Which of the graphs in Figure 2-3 represent his production possibilities frontier?

Accepted Answer

The answer of Figure 2-3
 
-Refer to Figure 2-3.Sergio Vignetto...

Question 20

Table 2-2
Production choices for Billie's Bedroom Shop
 
-Refer to Table 2-2.Assume that Billie's Bedroom Shop only produces pillows and blankets.A combination of 5 pillows and 21 blankets would appear

Accepted Answer

A combination of 5 pillows and 21 blankets is inside the production possibilities frontier because it requires using fewer resources than the maximum Billie's Bedroom Shop is capable of producing. This implies that the production may be more efficient and could potentially lead to higher profits.

Quiz 2: Trade-Offs, Comparative Advantage, and the Market System

An outward shift of a nation's production possibilities frontier represents

Table 2-1 Production choices for Tomaso's Trattoria -Refer to Table 2-1.Assume that Tomaso's Trattoria only produces pizzas and calzones.A combination of 24 pizzas and 30 calzones would appear

________ marginal opportunity cost implies that the more resources already devoted to any activity, the payoff from allocating yet more resources to that activity increases by progressively smaller amounts.

Table 2-1 Production choices for Tomaso's Trattoria -Refer to Table 2-1.Assume that Tomaso's Trattoria only produces pizzas and calzones.Tomaso faces ________ opportunity costs in the production of pizzas and calzones.

Economic decline (negative growth) is represented on a production possibilities frontier model by the production possibility frontier

Table 2-1 Production choices for Tomaso's Trattoria -Refer to Table 2-1.Assume that Tomaso's Trattoria only produces pizzas and calzones.A combination of 24 pizzas and 15 calzones would appear

An inward shift of a nation's production possibilities frontier can occur due to

Table 2-1 Production choices for Tomaso's Trattoria -Refer to Table 2-1.Assume that Tomaso's Trattoria only produces pizzas and calzones.A combination of 36 pizzas and 30 calzones would appear

Figure 2-2 Figure 2-2 above shows the production possibilities frontier for Mendonca, an agrarian nation that produces two goods, meat and vegetables. -Refer to Figure 2-2.The linear production possibilities frontier in the figure indicates that

Without an increase in the supply of the factors of production, how can a nation achieve economic growth?

Increasing opportunity cost is represented by a ________ production possibilities frontier.

If opportunity costs are constant, the production possibilities frontier would be graphed as

Table 2-2 Production choices for Billie's Bedroom Shop -Refer to Table 2-2.Assume that Billie's Bedroom Shop only produces pillows and blankets.A combination of 9 pillows and 21 blankets would appear

Table 2-2 Production choices for Billie's Bedroom Shop -Refer to Table 2-2.Assume that Billie's Bedroom Shop only produces pillows and blankets.Billie faces ________ opportunity costs in the production of pillows and blankets.

A production possibilities frontier with a bowed-outward shape indicates

The slope of a production possibilities frontier

Table 2-2 Production choices for Billie's Bedroom Shop -Refer to Table 2-2.Assume that Billie's Bedroom Shop only produces pillows and blankets.A combination of 27 pillows and 14 blankets would appear

Figure 2-3 -Refer to Figure 2-3.Sergio Vignetto raises cattle and llamas on his land.His land is equally suitable for raising either animal.Which of the graphs in Figure 2-3 represent his production possibilities frontier?

Table 2-2 Production choices for Billie's Bedroom Shop -Refer to Table 2-2.Assume that Billie's Bedroom Shop only produces pillows and blankets.A combination of 5 pillows and 21 blankets would appear