Microeconomics Chapter 2.

If the inner curve represents the production possibilities of 1980 and the outer curve represents the current production possibilities, which of these statements is true?
A) M and L represented recession level production in 1980.
B) the movement from the inner to outer curves represents economic growth from 1980 to today.
C) P represents recession level production today but not in 1980.
D) J, N and K represent current full employment.

The "entrepreneur" is rewarded by ____ and penalized by ____.
A) profit; loss
B) stocks; bonds
C) capital; labor
D) factories; the Internet

Opportunity cost is best defined as
A) the forgone value of the next best alternative.
B) the value of the opposite alternative.
C) the monetary equivalent of trading or bartering.
D) the difference between the value of a share of stock sold on day of purchase versus date of sale.

A point on our production possibilities frontier represents all of the following except

The shape of the production possibilities frontier is largely due to
A) technological advances.
B) the law of increasing costs.
C) unemployment at the origin.
D) the inability of our economy to grow.

A point outside our production possibilities frontier
A) represents underemployment.
B) depicts a trade-off between guns and butter.
C) represents full employment today.
D) is beyond our current capacities on a continual basis, but is possible with economic growth.

The law of increasing costs says that as the output of one good ___, the opportunity cost of producing additional units of this good ____.

The first woman member of a U.S. President's cabinet was appointed by

Economic growth is shown by

The opportunity cost of cutting down a tree is
A) The reams of paper produced as a result.
B) The price paid to the tree-cutter.
C) The increase in carbon dioxide as a result of the loss of oxygen supplied by the tree.
D) All of the above.