Macroeconomics-Production Possibilities and Opportunity Cost
1 view 0 purchase
Course
Macroeconomics
Institution
Macroeconomics
1) The production possibilities frontier is the boundary between
A) those combinations of goods and services that can be produced and those that cannot.
B) those resources that are limited and those that are unlimited.
C) those combinations of goods and services that can be produced and those th...
Chapter 2 The Economic Problem
150 Questions and Answers
Production Possibilities and Opportunity Cost
1) The production possibilities frontier is the boundary between
A) those combinations of goods and services that can be produced and those that cannot.
B) those resources that are limited and those that are unlimited.
C) those combinations of goods and services that can be produced and those that cannot.
D) those wants that are limited and those that are unlimited.
Answer: C
2) The production possibilities frontier is
A) upward sloping and reflects unlimited choices.
B) upward sloping and reflects tradeoffs in choices.
C) downward sloping and reflects unlimited choices.
D) downward sloping and reflects tradeoffs in choices.
Answer: D
3) The production possibilities frontier
A) depicts the boundary between those combinations of goods and services that can be
produced and those that cannot given resources and the current state of technology.
B) shows how many goods and services are consumed by each person in a country.
C) is a model that assumes there is no scarcity and no opportunity cost.
D) is a graph with price on the vertical axis and income on the horizontal axis.
Answer: A
4) The production possibilities frontier itself illustrates
A) all goods that can be produced by an economy
B) the combination of goods and services that can be produced efficiently
C) all goods and services that are desired but cannot be produced due to scarce resources.
D) all possible production of capital goods
Answer: B
5) The production possibilities frontier is the boundary between those combination of goods
and services that can be
A) produced and those that can be consumed.
B) consumed domestically and those that can be consumed by foreigners.
C) produced and those that cannot be produced.
D) consumed and those that cannot be produced.
Answer: C
,6) The production possibilities frontier itself shows
A) the maximum amount of resources available at any given time.
B) combinations of goods and services that do not fully use available resources.
C) the maximum rate of growth of output possible for an economy.
D) the maximum levels of production that can be attained.
Answer: D
7) The production possibilities frontier represents
A) the maximum amount of labor and capital available to society.
B) combinations of goods and services among which consumers are indifferent.
C) the maximum levels of production that can be attained.
D) the maximum rate of growth of capital and labor in a country.
Answer: C
8) Which of the following is NOT true concerning a society's production possibilities frontier
(PPF)?
A) It reveals the maximum amount of any two goods that can be produced from a given
quantity of resources.
B) Tradeoffs occur when moving along a PPF.
C) Production efficiency occurs when production is on the frontier itself.
D) Consumers will receive equal benefits from the two goods illustrated in the PPF.
Answer: D
9) The production possibilities frontier separates
A) the goods and services that people want from those that they do not want
B) the types of goods that can be attained from those that can't be attained
C) the quantities of goods and services that can be produced from those that cannot be
produced
D) the combinations of goods that people value and those that they don't
Answer: C
10) When producing at a production efficient point,
A) our choice of the goods can be either on or within the production possibilities frontier
B) we can satisfy our all wants
C) the opportunity cost of another good is zero
D) we face a tradeoff and incur an opportunity cost
Answer: D
11) Harry produces 2 balloon rides and 4 boat rides an hour. Harry could produce more
balloon rides but to do so he must produce fewer boat rides. Harry is
A) producing inside
B) producing on
C) producing outside
D) producing either inside or on
Answer: B
12) Production efficiency occurs when production
A) is at a point beyond the production possibilities frontier
B) is on the production possibilities frontier or inside it
C) is at any attainable point
, D) is on the production possibilities frontier
Answer: D
13) A point outside a production possibilities frontier indicates
A) that resources are not being used efficiently.
B) an output combination that society cannot attain given its current level of resources and
technology.
C) that resources are being used very efficiently.
D) that both goods are characterized by increasing costs.
Answer: B
14) Which of the following is NOT illustrated by a production possibilities frontier?
A) scarcity
B) opportunity cost
C) necessity for choice
D) who gets the goods
Answer: D
15) A production possibilities frontier figure does NOT illustrate
A) the limits on production imposed by our limited resources and technology.
B) the exchange of one good or service for another.
C) opportunity cost.
D) attainable and unattainable points.
Answer: B
16) Any production point outside the production possibilities frontier is
A) unattainable.
B) associated with unused resources.
C) attainable only if prices fall.
D) attainable only if prices rise.
Answer: A
17) Which of the following statements regarding the production possibilities frontier is true?
A) Points outside the frontier are attainable.
B) Points inside the frontier are attainable.
C) Points on the frontier are less efficient than points inside the frontier.
D) None of the above because all of the above statements are false.
Answer: B
18) Jane produces only corn and cloth. Taking account of her preferences for corn and cloth
A) makes her production possibilities frontier straighter.
B) makes her production possibilities frontier steeper.
C) makes her production possibilities frontier flatter.
D) does not affect her production possibilities frontier.
Answer: D
19) On the vertical axis, the production possibilities frontier shows
A) the quantity of a good; the number of workers employed to produce the good
B) the quantity of a good; the price of the good
C) the quantity of a good; a weighted average of resources used to produce the good
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller wisemonk. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $7.99. You're not tied to anything after your purchase.
